Crop Protection Consolidation Pieces Finally Fall into Place

After almost three years of market maneuvering, divestitures, and reorganizations, the global crop protection/seed marketplace is finally beginning to form a completed picture, according to industry watchers. For many in the know, the question now moves from “how will this all look when the dust settles?” to “with the dust settled, what happens next?”

Before viewing today’s industry-wide picture, consider taking a brief look back. While many market watchers would probably trace the agricultural industry’s current trend of company consolidation back to the 2016 news that Syngenta Crop Protection was being acquired by ChemChina, the initial reason for this market movement in consolidation’s direction goes back much further than that.

Advertisement

“There’s no question about it — the price of corn in the U.S. led to this,” said Alex Polinsky, Owner of Polinsky Chemical, speaking at the 2018 Agri­Business GlobalSM Trade Summit in Phoenix. “Corn prices in 2008 were at $8 per bushel or more. Today this has fallen to around $3 per bushel. The overall loss in value for the entire agricultural industry from this amounts to more than $15 billion. These losses have impacted all the suppliers in this market, including but not limited to equipment, chemicals, seeds, and fertilizer.”

With crop protection/seed suppliers receiving less money from growers for their products, added Polinsky, these companies have seen their costs to bring new products to the market steadily rise. On average, he said, it costs between $300 million and $500 million to develop a new active ingredient today — more than double what it had cost at the start of the 21st century.

Continue reading at CropLife.com.

Top Articles
ADAMA Reports Fourth Quarter and Full Year 2023 Results

Hide picture