Will Growers Reduce Their Spending on Biologicals in 2024?
Editor’s note: Each year, 2BMonthly’s State of the Industry feature includes a Q&A with executives from leading biocontrol and biostimulants companies worldwide. The 2023 feature touched on a wide range of prevailing topics including the biologicals M&A climate, critical success factors for scaling biologicals companies, and the ongoing challenges facing biocontrol registrations in the EU. In the excerpt below, experts offered their insight on how much (or little) growers will invest in biologicals in 2024.
Q: With dramatically lower farm income reported in 2023, do you see growers reducing investment in biological product purchases in 2024?
Eduard Vallverdú Vidal, CEO, Sustainable Agro Solutions (SAS): We have seen how input costs and farmer incomes have affected and changed the buying criteria and inputs purchases. This doesn’t necessarily mean that investment in biologicals will be reduced, but for sure any input investment will be more carefully analyzed by farmers. As a biostimulants manufacturer, we will need more than ever to show the benefits of our products use very clearly to farmers. Thus, they will know that investing in these products is worth and a good choice even with a more limited budget.
Frederic Beudot, Director & Global Portfolio Leader – Biologicals, Corteva Agriscience: Biologicals will continue to be an important tool for farmers looking to boost their productivity and keep their farms healthy today and into the future. Biologicals help farmers optimize profitability by addressing specific challenges for each crop, in each field. We anticipate seeing greater adoption as farmers observe value from these innovative technologies.
Salman Mir, Chief Operating Officer, Valent BioSciences: We saw less of an impact to our business on biorational products during 2023; however, we recognize that growers must constantly work to manage their on-farm risk as a function of performance (yield), efficiency (time, cost) and profitability (return on investment), and those considerations will continue to be important influencers in 2024. Every year, growers must be strategic and thoughtful about the inputs they use as they weigh their expected returns. The market dynamics in 2024 will require that growers rely increasingly on crop inputs that are science-driven and provide a proven return on their investment. We anticipate growers will continue to purchase and use biologicals in 2024 and expect the most used biologicals will be those that growers have had positive experiences with in the past or those that have been strongly endorsed by trusted researchers and/or crop consultants.
Enric Bonet, CEO, Manvert: Yes, and also in other agricultural supplies, especially NPK’s and under patent plant protection products. All farmers will decrease their expense in agricultural supplies in order to be able to keep their income. This is especially true in those crops where there is not enough water for 100% production with commercial quality parameters.
Ashish Malik, President & CEO, Bee Vectoring Technologies: No, I don’t. Under the current grower paradigm, the growers have to look at alternatives to chemical pesticides and fertilizers that work. This is to meet demand of the stakeholders in the food and ag supply chain, including ultimately the consumer. So, while the purchases of biological products in absolute dollar terms might decline because they are buying less agricultural inputs overall, as a percentage of the ag-inputs they purchase, I see biological products continue to increase.
Carlos Rodríguez-Villa Förster, Managing Director, AlgaEnergy: It will depend on many factors, one being their incomes of the previous season, indeed. But there are other factors that can influence or balance this, related to the climate, policies, etc. We see the acceptance for biologicals being accelerated in many regions. However, biologicals are still in a position where they are “last in and first out” for a farmer’s budget, particularly biostimulants, and we need to change that. The good news is that there is plenty of room for growth.
Loading ...Daniel Zingg, CEO, Andermatt Group: The lower farm income will definitely reduce the purchases of biological products in 2024. I do not see a recovery in input purchases until the financial situation improves again. This depends on various factors, such as the global economic situation, which affects consumer behavior, or in Europe the availability of subsidies (e.g., Green Deal), which are an important driver of the expansion of the biologicals market.
Vittorio Veronelli, CEO, CBC Europe: There is always concern over investments after a negative season, and there could be some slow down for specific products and crops, but I don’t see biologicals more affected than others.
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