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Agricultural Market 2018: Chemicals and AdditivesUS Farms MarketAccording to the US Department of Agriculture (USDA), 2018 net farm income, which includes cash receipts and expenses from farming and inventories, depreciation and other non-cash items, is expected to decrease 7% to $59.5 billion, a 12-year low.Average farm household income is expected to increase 0.2% during 2018, but primarily from non-farm income, which is expected to increase 2.8%, to $98,122/farm household. Average on-farm income is forecasted to decrease 10.3%, to $21,130/farm household. With low food and feed commodity prices, many smaller farmers are actually losing money from their farming operations. Median on-farm household income for 2017 was -$1,165 and is projected to be -$1,316 for 2018.US Agricultural Exports for February 2018TypeAmountYOY % ChangeAll exports$11.3 B+0.3%Cotton$788 M+18%Livestock$1.5 B+12%Dairy$448 M+4%Poultry products$408 M+12%Oilseeds $2.5 B-5%GrainsNA-15%Farm Bureau (USDA), April 2018 Protecting Crops from PestsThe 2016 global pesticide market totaled $49.920 billion, a YOY decrease of 2.5%. Phillip McDougall, a pesticide consultancy firm, predicts a 2018 global increase of 1–2%.Farmers use a variety of pesticides, including insecticide, herbicide for weeds and fungicide. Herbicide is the most commonly-used pesticide, applied to 95.99% of planted acres of soybeans, 96.02% of cotton and 87.22% of spring wheat.Fungicide is used on 11.2% of soybean acres, 36.51% of spring wheat and only 2.94% of cotton acres. Farmers use insecticide on 18.07% of soybean acres, 5.10% of spring wheat and 64.551% of cotton acres.Crop Protection Chemical Distribution, 2014Type of ProductShare of TotalHerbicides56%Insecticides21%Fungicides19%Other4%Statista, April 2018Fertilizers: A Decreasing BusinessAmerican fertilizer sales for the largest ag retailers has decreased more than $2 billion since the end of 2015 from lower prices and market resistance. The USDA forecasts more growers will plant soybeans instead of corn. Since corn is a more fertilizer-intensive crop, this will hurt sales. Nitrogen, phosphates and potash demand will be flat or lower in the US and increase in developing countries during 2018.Climate Corporation, the leader in digital farm technology, is launching a new product during 2018 that will enable the platform to output manual scripting for N, P, K and lime, which are key soil nutrients, and customize them for specific farm 7 US Ag Retailers, by Product Mix, 2017CompanyCrop ProtectionFertilizerSeedCustom ApplicationCrop Production Services46%34%16%4%Helena Chemical Co.44%33%19%4%GROWMARK Inc.21%49%19%11%Wilbur-Ellis Co.47%39%9%5%CHS26%49%19%6%Pinnacle Agriculture Holdings46%30%19%5%Simplot Grower Solutions43%48%6%3%CropLife, 100 2017 RankingSeed CapitalAccording to CropLife’s 2017 100 survey, the biggest US ag retailers reported seed sales of $4.667 million during 2017, a 1.1% increase from 2016. Mergers & acquisitions in the industry should boost the seed industry during panies, such as Bayer-Monsanto and Syngenta, are investing more money in research and development of seed lines as well as sales and marketing of seeds. Demand for traited seed (seed genetically modified to resist pests) has decreased after years of using traited seed significantly reduced insect populations. Traited seed is more expensive than conventional seed, but it reduces the need for insecticide.Seed Companies by Share of Genetics Sold by Other Companies, 2017Company Corn SeedSoybean SeedAgReliant75%67%Dow68%72%Syngenta53%16%Retail51%56%Independent31%41%DuPont21%34%Monsanto20%42%BayerNA75%Farm Journal’s AgPro, October 2017Agro-Chem GiantsMergers and acquisitions have been active trends in the agro-chem industry. During 2017, DuPont and Dow Chemical merged, BASF bought ZedX, ChemChina acquired Syngenta and Bayer CropScience acquired Monsanto. Digital agriculture has improved yields and provided companies, such as The Climate Corporation, a Monsanto subsidiary, with copious data for product development. Climate FieldView? is the industry-leading big data 10 Agro-Chem Companies, 2016Company2016 Sales2015 Sales% Change Syngenta$9.571 B$10.005 B-4.3%Bayer CropScience$8.810 B$9.186 B-4.0%BASF$6.163 B$646.4 B-4.6%Dow AgroSciences$4.631 B$4.925 B-5.7%Monsanto$3.514 B$4.758 B-26.1%DuPont$2.884 B$3.037 B-5.0%Adama$2.877 B$2.885 B-0.3%Sumitomo Chemical $2.380 B$1.900 B+25.3%FMC$2.270 B$2.253 B+0.8%UPL$2.157 B$1.912 B+12.8%AgroNews, October 30, 2017Organic Produce TrendThe global organic seed market is forecasted to reach $4.59 billion by 2022, according to Grand View Research. Increasing disposable incomes, especially in Asia and Latin America, have contributed to the growth, while high seed cost is a deterrent. American consumers are demanding more organic produce. According to Organic Produce Network and Nielsen, 2017 US organic fresh vegetable sales totaled $2.4 billion, a 6% YOY increase and organic fresh fruit totaled $1.6 billion, a 12.6% increase. Organic Fresh Produce Sales, 2017*CategorySalesDollar Share% Dollars Change% Volume ChangePackaged salad$892.8 M18.6%2.3%4.5%Berries$580.8 M12.1%21.9%21.6%Herbs, spices, seasonings$297.6 M6.2%14.7%15.2%Apples$292.8 M6.1%2.4%11.4%Beverages$283.2 M5.9%8.8%11.2%Bananas$259.2 M5.4%13.9%17.5%Carrots$249.6 M5.2%1.5%2.8%Lettuce$163.2 M3.4%2.2%-0.1%Tomatoes$148.8 M3.1%-2.1%3.1%Organic Produce Network/Nielsen Fresh Facts, February 2018 * 52 weeks ending 12/31/17Additional AnalysisWhile farmers tend to focus on killing weeds to boost yield, crop diseases and insects exact a heavier toll on crops. According to BASF, global crop loss from weeds is 13%, but diseases and insects cause 39% of crop loss. Experts predict 2018 will be challenging year in regards to crop diseases. Top 2018 crop diseases include gray leaf spot and Northern corn leaf blight for corn and frogeye leaf spot and white mold for soybeans. Because of repeated use of fungicides, many plant diseases have developed immunity to existing products. To satisfy demand, ag-chem companies are launching new products with multiple modes of action. Shifting weather patterns are also giving these pests a boost.Among insect pests, the soybean cyst nematode causes approximately $1.5 billion in crop damage in the US and corn rootworm damages approximately $1 billion in crops each year.Biologics is an increasing segment of the ag-chem industry. Biofertilizers are microorganisms, such as specific bacteria and fungi that increase nutrient availability and use by plants. Growers have been slow to adopt these products because they are concerned about efficacy. A study from the research firm DunhamTrimmer predicted the overall biologics market could increase to $11 billion by 2025.Biofertilizer sales have barely increased from 2010’s almost $1 billion. Experts predict growth in this category because of concerns about runoff from chemical fertilizers. The growing organic market is also spurring growth. Biostimulants are approximately a $2-billion global market, and the North American share is 20%, or approximately $400 million. Biostimulants help plants to be healthier, grow faster and resist disease, and include amino acids, enzymes, seaweed extracts, mocrobials, biopolymers and inorganic compounds. The biostimulant market is increasing so fast, it is attracting attention from regulators. Industry stakeholders welcome regulation as a way of eliminating fly-by-night operations with unrealistic claims.Biological Products Sold by Retailers, Crop Consultants and Manufacturers, 2017Product CategoryPercentBiofertilizers35%Biopesticides33%Biostimulants63%None of the above27%CropLife Biological Products Market Survey, December 2017Please read the complementary Profiler, Agriculture and Farm Equipment Markets 2018, for more agricultural industry information and trends.Sources: Farmers Bureau Website, 4/18; US Department of Agriculture Website, 4/18; Statista Website, 4/18; Farm Industry News Website, 4/18; AgroPages Website, 4/18; CropLife Website, 4/18; Farm Journal’s AgPro Website, 4/18. Organic Produce Network Website, 4/18.Updated: April 2018? 2018 Media Group Online, Inc. All rights reserved. ................
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