The United States synthetic crop protection market is facing challenges spanning from the banning of active ingredients to dealing with more sophisticated growers. Our experts gave us a few tips on what changes and trends are affecting the U.S. crop protection industry and what to do about them.<\/p>\n
Mike Snyder, President\/Owner of Red Rocket Consulting, LLC, says after working 42 years in the U.S. ag chem industry, he\u2019s noticed \u201cthe time it takes from registering a technical and bringing out an End Use Product (EUP) to market,\u201d says Snyder. \u201cIt used to be a two-year timeline and now it is three to four years. The PRIA date model is not working. You can get a PRIA date, but it is no longer a delivery date you can feel comfortable with. This does not seem to be just an issue with the EPA but also with getting state registrations. This really impacts commitments with formulators and the coordination with technical and launch resources with manufacturers.\u201d<\/p>\n
Once companies get through the hurdle of regulations, they face a new generation of business savvy ag retailers who deal with educated growers looking to get a good return on investment for every product purchased.<\/p>\n
Chris Payne, President and CEO of CNI Ag, a distribution company to U.S. independent ag retailers with products and services based in Leesburg, Ga., says, \u201cSeed germplasm, genetic traits and new crop protection technologies all are on the minds of U.S. farmers as they strive to maximize production. While cutting input costs can be an important element of success, U.S. farmers are very astute in their selections of crop inputs, always trying to achieve maximum performance and return.\u201d<\/p>\n
Harlan Asmus, President and CEO of Asmus Farm Supply, Inc., a U.S. ag retailer based in Rake, Iowa, agrees. \u201cThe complexity of building a successful production plan is what is changing. Pest resistance, regulations affecting crop inputs, and manufacturers\u2019 rebate bundling programs are things growers need to consider when trying to raise a crop in a very business-minded model.\u201d<\/p>\n
Looking ahead at 2025, sales agronomists will need to have solid performance data when placing new products with growers. Asmus says to be ready for pessimistic behavior and cautious investment. \u201cMost growers will be cautious to invest in non-essential production products until they see how good the crop looks in the summer of 2025,\u201d says Asmus.<\/p>\n
Payne agrees with Asmus\u2019 2025 outlook.<\/p>\n
\u201cThe 2025 market year appears to be difficult with soft commodity prices,\u201d says Payne. \u201cWith supply chains stabilizing and most crop protection supply in adequate or excess availability, caution and multiyear strategies are prudent.\u201d<\/p>\n
Along with getting products through regulations and then presenting products to an educated consumer, companies selling off-patent products face growing competition with generics.<\/p>\n
\u201cThere are a lot of generic suppliers trying to figure out how to squeeze an additional 2% -5% margin out of their go-to-market costs, data comp, inventory, and launch costs, like headcount and all the expenses associated with headcount,\u201d says Snyder. \u201cFrom a macro perspective, if a product has just come off patent and there are generic players, then the cost of that product will definitely drop anywhere from 20% \u2013 50% in the first year, depending on how many generic suppliers get a registration in the first year.\u201d<\/p>\n
For crop protection companies, there is also the need to deal with public perception.<\/p>\n
Jake Brodsgaard, Executive Vice President North America, ADAMA, says, \u201cWe face is the prevalent public perception that synthetic crop protection products are harmful. There\u2019s a lot of negativity about synthetic chemistries, and we deal with that by addressing the issue head-on. We constantly educate people about the science-based reality of crop protection products, the benefits they bring, and the enormous effort we invest to ensure that our products are both safe and effective.\u201d<\/p>\n
Brodsgaard also says that U.S. distribution system is challenging due to its size and complexity based on regional differences.<\/p>\n
\u201cWhile it may seem straightforward, the channels operate differently depending on the region. Reaching the farmer and effectively communicating the innovation and return on investment our products bring across such a vast country can be quite complex,\u201d says Brodsgaard. \u201cWe address that by making sure that we stay nimble and agile. Because we\u2019ve been in the US for several decades, we have a lot of experience in identifying what the different market segments need, so we customize our approach for different customers and channel partners.\u201d<\/p>\n
Before taking your product to the U.S. market, here are eight points to consider.<\/p>\n
1. Local Stories:<\/strong> Getting your product tested locally will build confidence with growers. \u201cLocal testing where performance stories can be built by the retailers selling in those areas,\u201d says Asmus. \u201cYou need at least one year, if not two, to build local messaging around features and benefits of new products.<\/p>\n \u201cYou will sell something into the U.S. market,\u201d Asmus continues. \u201cBy one, being the cheapest price all of the time, or two, having a professional sales staff that knows customers, talks with them, and builds a plan for success. In my opinion, you will be more successful over a longer period of time utilizing option two.\u201d<\/p>\n 2. Value Propositions:<\/strong> Creating specific points of how your product is different and meets the needs of growers is crucial in a saturated market.\u201cLook at the competitive landscape,\u201d says Snyder. \u201cHow many equal or similar competitors are there going to be? Find out if there is any way to differentiate your product before launching, such as premixing, formulation differentiation, even simplifying the branding.\u201d<\/p>\n 3. Keeping Costs Down:<\/strong> With heavy competition in generics, keeping your cost down is essential. 4. Detailed Marketing Plan:<\/strong> Make sure you set objectives for volumes and your financial plan.<\/p>\n \u201cWhat are you bringing to market? What are your distribution patterns or are you selling direct to farm?\u201d Snyder asks. \u201cWhat are your tactics? What is your pricing, number of reps, promotion, trade shows, and training?<\/p>\n 5. Registrations:<\/strong> Right from the start, Snyder says to \u201ctake the extra step to figure out how to differentiate your product starting with the EUP formulation.\u201d<\/p>\n 6. Formulation\/Tolling:<\/strong> At this stage, you need to plan for mishaps, delays, and other interruptions. \u201cBuild in flexibility to your schedule and look at all the costs going to the formulator, cost of formulation and freight cost to market,\u201d says Snyder.<\/p>\n 7. Distribution Strategy:<\/strong> When working with ag retailers, its important to think about the long-term game plan, which involves building relationships. \u201cGet on the road and meet the distributors you are considering,\u201d says Snyder. \u201cLook at them as partners, not just customers buying your product. Develop an understanding of how you plan to handle things like: late products, changes in freight cost, farmer questions and complaints, and even product quality issues, like formulation stability.\u201d<\/p>\n 8. Know Your Customer:<\/strong> Each region of the U.S. is very different, as well as soil types, weather, culture and crops. Make sure that you know what growers are facing in each region.\u201cLearn the crop and market you are planning to sell into,\u201d says Snyder. \u201cTiming and method of application [are important]. You will need less package versus totes in a market controlled by aerial applicators.\u201d<\/p>\n While many companies are successful in the U.S. when launching their products, Snyder and Asmus have seen common mistakes that lead to failure.<\/p>\n \u201cMaking \u2018new\u2019 products out of old ingredients is the typical mistake,\u201d says Asmus. \u201cThey may be successful at gaining a registration to mix things together that no competitor has, but that isn\u2019t a long-term strategy to helping production challenges on the farm, nor support long-term successful sales of the product.\u201d<\/p>\n Other mistakes include not understanding how a product will perform in different environments or in integrated pest management systems or the market value of a new product.<\/p>\n \u201cThe market is highly knowledgeable, and is seeking proof of value, so you need boots on the ground explaining your product and giving farmers a reason to believe in your differentiated value,\u201d says Brodsgaard. \u201cThis takes both time and money. You need to run plenty of tests, demos plots, collaboration with universities, and more, all to demonstrate the value of the new solution.\u201d<\/p>\n Brodsgaard continues, \u201cFarming is seasonal, so you get one chance each year to show that value. If something doesn\u2019t go according to play, it\u2019ll be another year before you can interest the channel in the new solution. It could take five years before you can feel confident that the channel will deliver the value that you know is there.\u201d<\/p>\n Another issue is understanding the market value of a new product.<\/p>\n \u201cYou may find out that your cost will not allow you to even go to market,\u201d says Snyder, \u201cor you may find out that there is more profit in launching in smaller markets with limited distribution partners.\u201d<\/p>\n This also applies to distribution strategies. \u201cIf you don\u2019t have a lot of funding for a sales team then the Tier 1 distributors may be best (Nutrien, Helena, Simplot, Winfield),\u201d says Snyder. \u201cIf you have more of a sales and marketing budget then maybe Tier 2 distribution is better, (Tenkoz, IAP, WestLink). You can expect a little more margin but will have more cost in sales and marketing.\u201d<\/p>\n Taking the time to create a strategy, build relationships, and studying the market is a plan to create long-term success in the U.S. This includes working with the growers, but also ag retailers.<\/p>\n \u201cI can\u2019t stress enough how short-sighted it is to build your marketing strategy on being the cheapest vendor of inputs there is in all categories,\u201d says Asmus. \u201cThis may be appealing at the grower level, but it does a terrible disservice to the ag industry\u2019s ability to compete in a worldwide production market for the long term.\u201d<\/p>\n The way to launch your product and keep it on the shelves because growers are asking for it is to learn the many entry points and what market changes influencing the U.S. grower.<\/p>\n \u201cDoing business in the U.S. involves much more than simply bringing product in,\u201d says Payne. \u201cThere is an understanding of the value of relationships, grower programs, financing, distribution and retail channels, and consultant influence that must be considered in order to succeed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" \u7f8e\u56fd\u5316\u5b66\u4f5c\u7269\u4fdd\u62a4\u5e02\u573a\u6b63\u9762\u4e34\u8bf8\u591a\u6311\u6218\uff0c\u4ece\u7981\u7528\u6709\u6548\u6210\u5206\u5230\u5e94\u5bf9\u66f4\u7cbe\u660e\u7684\u79cd\u690d\u8005\u3002\u6211\u4eec\u7684\u4e13\u5bb6\u5c31\u4e00\u4e9b\u6b63\u5728\u5f71\u54cd\u7f8e\u56fd\u4f5c\u7269\u4fdd\u62a4\u884c\u4e1a\u7684\u53d8\u5316\u548c\u8d8b\u52bf\u505a\u4e86\u4e00\u4e9b\u9610\u8ff0\uff0c\u4ee5\u53ca\u5bf9\u5982\u4f55\u5e94\u5bf9\u8fd9\u4e9b\u53d8\u5316\u548c\u8d8b\u52bf\u7ed9\u51fa\u4e86\u4e00\u4e9b\u5efa\u8bae\u3002<\/p>","protected":false},"author":2163,"featured_media":78091,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4,26,5],"tags":[1988],"class_list":["post-134388","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agrochemicals","category-americas","category-markets","tag-abg-direct-november-2024"],"yoast_head":"\n
\n\u201cThe most important point with a generic launch is doing all you can to lower your cost\/unit,\u201d says Snyder. \u201cThere is an old saying in the generic world and that is: You don\u2019t get to set your price, your competition does. If you do not feel comfortable with your cost, be very careful.\u201d<\/p>\nCommon Mistakes<\/h2>\n
Building Your Reputation<\/h2>\n