Herbicide price hikes across the board are an inevitability for 2019, as the entire U.S. ag community deals with a couple of harsh realities: one, tariffs on imports from China and, two, fallout from the Chinese environmental clean-up that has gutted supply of some technical-grade and inert products.
Metribuzin is one example of a tough-to-get product as of late, according to industry people with whom we spoke.
Pesticides are among the $200 billion worth of Chinese products on which Washington has slapped a 10% tariff from Sept. 24. That duty will rise to 25% by Jan. 1.
Price increases of between 3% and 10% will affect the lion’s share, but some herbicides could soar as high as 40%.
“We are not wanting to do it, but we’re being forced, in some cases, to absorb some of those costs (from the Chinese plant shutdowns and tariffs),” says Gail Stratman, Heartland Regional Technical Manager with FMC. “We are very diligent and aware of the farm economy and what that’s doing to growers, and so we’re absorbing a lot of those costs. We’re definitely not passing on all of them that we could because we’re trying to keep our growers in mind and keep them profitable. If they’re not profitable, we don’t have much of a market anymore.”
Off-patent herbicide giant Albaugh also confirmed it would have no choice but to pass on the higher cost to its customers: “Though Albaugh has a very diverse supply chain based on production in the USA, Argentina, Mexico, Brazil, Europe, and India, on some products only China offers commercially or viable supply. In such cases, we are left with no alternative but to increase prices reflective of the higher tariffs.”
Willowood USA made a similar announcement. A letter to customers stated, in part: “Not every product in the Willowood USA portfolio will be subject to tariffs. In some cases, the tariffs will be imposed on technical that we import. In other cases, some of the intermediates used in our products will be subject to tariffs. This is a dynamic situation, and we will continue to monitor and communicate any changes to pricing, so as not to confuse the situation.”