June 22, 2012
US crop protection sales up 8.3%
Following a US$7.1 billion market, strong commodity demand helped power 2011 US crop protection sales to an 8.3% increase over the previous year, according to Kline''s imminent Crop Protection Manufacturers Report: A Strategic Market Analysis of the US Crop Protection Industry.
While sales for generic manufacturers increased 7.6% in 2011, their market share fell slightly as major research-based manufacturers pursued aggressive marketing strategies. Both generic and major research manufacturers are introducing new products containing multiple modes of action, which are pulling prices up and placing pressure on off-patent brands containing straight active ingredients.
The start of the 2011 year was defined by low crop inventories along with high soft commodity prices, which drove planted acres of major crops by almost seven million acres over 2010. A cold, wet spring delayed planting schedules for most growers in the US, which contributed to increased sales of seed treatment. Despite the unfavourable weather, corn planted acres exceeded 90 million acres for the second time in history.
All segments of the crop protection industry saw increased sales over 2010, with seed treatment and fungicide segments seeing double-digit percentage gains.
High commodity prices and profit per acres potential drove fungicide applications during the year. Fungicides are primarily a crop-driven market that drives yield; during increased wealth and economic conditions, the industry generally sees more fungicide usage. Growers tend to be more willing to invest in their crops and apply fungicides even in situations with less disease pressure.
Weed resistance continued to be a concern within the US crop protection industry. The challenge of controlling herbicide resistant weeds has increased significantly and growers are relying to a greater extent on pre-emergent herbicides. The magnitude of the problem is reflected by over 20 herbicide mechanisms of action and the utilisation of these herbicides resulting in the evolution of weeds that no longer respond to those herbicides.
Moreover, the number of glyphosate resistant weeds in the US went from zero in 1996 to eleven in 2011. Consequently, the industry has seen an increase in pre-emergent herbicide use, especially in soy where many growers have previously been reluctant to invest in the additional outlay.
Although Bacillus thuringiensis (Bt) traits in corn have increased the convenience of insect control for growers, there is an increasing number of reports of corn rootworm (CRW) seed trait performance failures. Growers are looking at new and different solutions to control corn rootworms and other secondary pests. As a result, agricultural retailers have seen an increased interest in soil insecticides as a tool for corn production and economic returns. Every grower wants to maximise yield on every acre they plant and corn soil insecticides target a second line of defence for possible CRW trait performance failures within Bt-resistance corn.