Prolonged cold into the 2014 spring and lower commodity prices led to a decline in sales for key crop protection products and even some reorganization among companies, according to a new report on the industry from consulting firm Kline.
It was late may before the U.S. crop season began last year, resulting in market conditions which reduced the need for sales of crop protection chemicals, Kline's report says. The need for pre-emergent herbicides increased as concerns for glyphosate-resistant weeds continued.
Insecticide and fungicide sales also were affected by the cold temperatures, but seed treatments gained a slight market share after experiencing a 25% increase the previous year.
Overall, crop protection chemical sales declined slightly in 2014, posting a decrease of 0.9% over the previous year. Net manufacturers’ sales within the crop protection industry total $9.35 billion, the Kline report said.
Prices of agricultural commodities declined, further affecting the market in 2014, largely due to an increase in the scope of expected yields and a rise in stockpiles of corn, soybeans, and cotton.
The lower prices of agricultural commodities contributed to a decline in grower profits effectively lowering sales of crop inputs, including crop protection chemicals, the report said.
Reduced pest pressure, company moves
The cold conditions reduced insect pressure, causing the insecticide segment to decline considerably. Similarly, disease pressure declined from the unseasonable weather resulting in less fungicide applications.
A large percentage of growers did not apply fungicides because they planted late and by the time they got to August to spray it was dry.
“The slight increase in fungicide sales likely resulted from the Southeast and Northern Plain states where warmer, wetter conditions prevailed," said Joe Prochaska, project manager at Kline’s Agrochemicals/Specialty Pesticide practice.
As the year began to unfold, crop protection manufacturers began announcing decisions that would change the direction of their business.
Arysta LifeScience and Chemtura AgroSolutions announce the sale of their companies to Platform Specialty Products, a specialty formulator of crop protection chemicals. FMC has acquired Danish-based manufacturer Cheminova, and Albaugh signed several strategic partnerships with international crop protection manufacturers. Meanwhile, Adama (formerly Makhteshim Agan) announced it will acquire ChinaChem’s 60% ownership within its company.
Kline’s report covers the leading 20 companies which supply more than 98% of the total industry sales.
Learn more about the crop protection industry report's findings online.
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