Crop Protection Market Development in U.S. and Europe

By Derek Oliphant

Kay Factors 2024

• Lower U.S. maize and wheat areas, although higher soybean area.
• Low agrochemical prices.
• Low commodity prices held back grower purchasing power.
• Dry conditions also held back market development.

Market Outlook 2025

The global crop protection market experienced a sharp decline in value terms in 2024, impacted by the continuing effects of low agrochemical prices, unfavorable agricultural economics based on low commodity prices and high input costs, lower areas of key crops in certain markets (notably U.S. and Brazil maize), and unfavorable weather conditions in several key regions, including cereal areas in Europe and large parts of Asia Pacific.

However, the global market in 2025 can be expected to be less negative, with agrochemical prices stabilizing and improved weather conditions in Europe, Asia, and Brazil. It can be expected that company performance in 2025 will benefit from a more stable inventory situation, with company sales in recent years being hampered by high supplies in many regions.

The key factors behind the assumptions for a more stable global market in 2025 are:

• Stable agrochemical prices.
• Improved weather conditions (Europe, Asia, Brazil).
• Higher maize area in U.S. and soybean area in Brazil.
• Normalization of inventory levels, particularly in North America and Europe.
• Continued growth from recent, novel active ingredient introductions.

United States (U.S.)

For 2025, farm economics continue to be challenging in the U.S., where low commodity prices continue to impact the market. Any improvement in weather conditions can be expected to be a positive, while the much improving inventory situation can also be expected to benefit crop protection product sales, particularly from the supply side as there has been a notable shift towards just-in-time purchases.

In terms of crop areas, the maize area is expected to rebound at the expense of soybean, primarily driven by high production and low usage of soybean stocks in the country leading to high supply levels and subsequent price deflation. According to the USDA’s Prospective Plantings report, the maize area is projected to increase by 5.2%, while the soybean area is expected to decline by 4.1%. Expectations for cotton also suggest a decline, based on high increases in the last two years. The cotton area is expected to decrease by 11.8% to the lowest area for a decade.

Purdue University, in partnership with the Chicago Mercantile Exchange Group, recently published its monthly Ag Economy Barometer, which tracks farmer sentiment regarding the current and future state of the industry. In its latest publication, the barometer increased 10 points from the previous month, driven by a 12-point increase in the Index of Future Expectations and a 5-point increase in the Current Conditions Index. This improvement in farmer sentiment was driven by a more optimistic view of U.S. agricultural export prospects, combined with a less negative view of tariffs’ impact on 2025 farm income than respondents provided earlier in the year.

One of the most significant issues facing U.S. growers is financing and rising levels of debt. According to the Federal Financial Institutions Examination Council, at the end of 2024, debt that was 30-89 days late was up by 5.2% compared to the end of 2023 and the highest since Q1 of 2021.

Policies such as the American Relief Act, intended to provide support to growers in the event of natural disaster and economic disaster relief, have alleviated this somewhat, however the gap between farm income and expenditure continues to be an issue. In 2025, the USDA is projecting that crop cash receipts are forecast to fall by 2.3%, with the main crops of maize and soybean the worst affected. While low crop input prices can be seen as a positive in terms of farm incomes, other costs increased sharpy, including labor, rent, and debt servicing.

In addition, there was considerable uncertainty over the impacts of the tariffs applied by the administration agricultural commodities, including crop inputs and crop production. However, this situation has now largely stabilized following the formation of new agreements with several key trading partners, such as the EU, India, and China.

Key Factors 2024

• Winter cereal planting in western and northern regions severely impacted by wet conditions:

• • Unfavorable for crop development and also hampered field access and application of inputs.
  • Conditions more favorable in southern regions, including key fruit and vegetable markets.

• EU-27 crop areas variable, with soft wheat and oilseed rape areas down, but maize, sunflower and soybean areas up compared to 2023.

• • However, production negatively affected by hot and dry summer conditions.

Market Outlook 2025 – Europe

For 2025, positivity can be expected in the European market based on a return to more normal, positive weather conditions, with the winter cereal crop in many western and northern countries showing significant improvement from the prior year. In addition, the weather-impacted production of 2024 can be expected to limit crop availability and could provide some solidity to crop commodity prices moving forward. Despite this, extended dryness in eastern parts, notably Bulgaria and Romania, is impacting crop production and yield potential, possibly to the detriment of crop protection product usage.

In terms of crop areas, France’s cereal area is projected to increase by 4.4%, driven by anticipated greater areas of soft wheat, oats, rye, and triticale. However, the planted areas for durum wheat and barley are expected to decline. The rapeseed area is projected to decline by 2.3%. In Germany, the total planted area of grain crops is expected to increase by 3.4% over the previous year, reversing the long-term trend of area declines in the country. Within this, increases are forecast for the total wheat area, as well as rye and triticale. Total grain production is forecast to rise by 7.4% in 2025, with greater production expected for wheat, rye, and triticale. Large parts of Germany have received less than 50% of the usual precipitation since the beginning of the year, with March being one of the driest months since weather records began. However, recent rainfall has helped stabilize crop conditions.

According to COCERAL’s latest projections, the total planted area for cereals (excluding maize) in the EU-27 region is forecast to rise by 2.5%. The area under maize is expected to see a 2.1% decline from the previous year. Cereal production in the EU-27 is projected to increase by 5.9% over the previous year. The total planted area for oilseeds in the EU-27 is expected to rise by 4.1%, with increases projected for oilseed rape and sunflower, while soybean areas are expected to fall. EU-27 oilseed production is forecast to increase by 12.0%.

While agrochemical pricing is a negative, the impacts in Europe are less than in many other regions, with Europe not as reliant on Chinese material. Costs in Europe have been affected by a myriad of factors, although energy costs have been a key factor in prices being sustained above most other regional markets. While prices are in a trend of decline, this is not expected to be at the levels of severity experienced in other agrochemical production bases such as China and the U.S.

A significant driver of value growth in Europe in recent years, and which can be expected to accelerate as uptake expands, has been new product introductions, with active ingredients such as bixlozone and cinmethylin being introduced in markets where regulation and resistance have restricted product choice in recent years. In addition, fungicides such as mefentrifluconazole and fenpicoxamid are also finding further uses in the region, particularly from a more positive cereals market where Septoria control from these products is of significant benefit. While pesticide reduction continues to be a focus, the EU has relaxed its targets somewhat: however, many country markets are looking to reduce application volumes, with this often being of benefit to more recent introductions where active rates are typically lower than older technologies. This can also assist in driving value growth through uplift into newer, more costly, products.

The European Commission has proposed a major reform of the EU’s Common Agricultural Policy (CAP) to reduce bureaucracy, improve competitiveness, and support farmers in responding to crises and environmental challenges. It is estimated that the reforms could save farmers up to €1.58 billion and national administrations €210 million annually. Key changes include simplifying environmental rules, increasing the annual lump-sum payment for small farmers from €1,250 to €2,500, and limiting farm inspections to once per farm per year. Organic farms will automatically meet some environmental conditions, and farmers will receive more support for preserving peatlands and wetlands.

However, it is understood that there are provisions to allow growers to convert up to 10% of permanent grassland, which will double the current limit. The package introduces faster crisis support, more flexible funding rules, and a new €50,000 lump-sum investment option for small farms.

It also promotes digitalization to streamline data submission and cut administrative costs. These proposals now go to the European Parliament and Council for approval and are part of the Commission’s broader push to lower EU regulatory burdens and strengthen economic resilience across sectors.  •

Derek Oliphant: AgbioInvestor