Companies selling treated seeds saw excellent gains during 2013.
DUE to prolonged rainfall, weed resistance issues and higher manufacturing costs, the U.S. crop protection industry had a strong year in 2013, posting an 8.2% increase in sales over the previous year.
Manufacturers' net sales within the crop protection industry totaled $9.2 billion, according to "Crop Protection Manufacturers Report: A Strategic Market Analysis of the U.S. Crop Protection Industry," published recently by consulting and research firm Kline & Co.
According to the report, corn growers, anticipating a healthy planting season, purchased greater inventories of herbicides in 2013, but excessive spring wetness in the Corn Belt and throughout the country caused almost 2 million acres to remain fallow and deferred spring planting, forcing some corn growers to switch to short-maturity soybean varieties.
The wet conditions reduced insect pressure, causing a double-digit percentage decline for insecticide sales while promoting disease pressure and modestly increasing fungicide sales. However, many growers halted or did not start fungicide applications as the wet weather soon gave way to summertime droughts.
The plant growth regulator segment saw a slight sales declined as it heavily targeted the cotton markets, while acres planted to cotton decreased almost 16% in 2013.
"The wet weather conditions were ideal for growers to utilize the value of seed treatments. The feedback from growers planting treated seed was that they saw very good control when faced with additional pressure from disease and insects," said Joseph Prochaska, project manager at Kline's agriculture and specialty pesticides practice. "Both Bayer and Syngenta saw excellent market share gains as their recent product introductions performed very well during the year.
"With high commodity grain prices still warranting maximum crop production, major crop acres planted during the year declined just 1.2% from the previous year. Despite the decline in planted acres, growth within the crop protection market came, in part, from factors outside of planted acres," Prochaska added.
The major growth drivers included weed resistance issues, increased prices due to higher manufacturing costs and a major research-based manufacturer leveraging integrated strategies within its seed business. As a result of weed resistance issues and higher manufacturing costs, glyphosate prices climbed from an average of $9.50/gal. in 2012 to $11.50/gal. in 2013.
While the growing biologicals market within the crop protection industry was a hot topic of discussion, it was pushed aside by the weed resistance problems that persisted in 2013, Kline said. Consequently, herbicide use rate applications grew 10-20% to combat resistant weeds.
According to the report, growers are formulating their own mixtures and looking for new and innovative solutions from manufacturers to target resistant weeds.
As a result, manufacturers are developing new formulations with multiple modes of action and products that pair with new herbicide-resistant traits that aim to combat this persistent problem. Strategic alliances and partnerships are being formed to develop new formulations that can best solve the resistance issue.