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Key Factors Impacting the Growth Momentum in the US Agrochemicals Industry

Feb 11, 2020

Despite challenges such as longer product development cycles and escalating costs, increasing stringency of regulatory requirements, farm subsidy reduction, and accelerated pace of change, companies in the US agrochemicals industry seem to be poised to grow out of these challenges. The need to grow crop protection agents to minimize crop losses and increase yield can be considered as the top reasons for this. Companies in the US agrochemicals industry are increasingly focusing on consolidating their market share through increased mergers and acquisitions(M&A), extending their supply base, increasing spend on research and development (R&D) of active ingredients, and enhancing product offerings through digital technologies.

Companies in the US agrochemical industry have scrambled to restructure their product portfolio. Request a free proposal to know the US agrochemicals industry overview and gain customized market intelligence solutions. 

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Key Factors Influencing the US Agrochemicals Industry 

Portfolio optimization 

Over the last few years, companies in the US agrochemicals industry have started focusing on portfolio optimization through M&A. The majority of the deals closed by acquirer companies are to increase the geographical presence, especially in the economies where these companies didn’t have a strong distributor network. In addition, M&A act as a tool to gain growth and reemerge in a maturity market. M&A strategies have moved from expansion seeking to a strategy of business realignment. The top companies focus on a niche such as R&D investments scaling external partnerships or collaborations in the US agrochemicals industry.

Integrated product offerings 

Many companies in the US agrochemicals industry are moving from being simple providers of farm inputs to complex providers of integrated product offerings, having a digital as a major component. Firms are launching digital platforms to enable farmers to remotely monitor their field through data collection, visualization, modeling, and weather monitoring. This is consequently minimizing inefficiencies during field trials and increasing crop yields. Such steps initiated by companies are creating new value pools for farmers.

Digital technologies  

Digital provides firms in the US agrochemicals industry the means to unlock a new level of productivity enhancement. It has the potential to improve approximately 4% of ROI in production operations. However, to achieve such potentially easy wins, companies need to collect the data and interpret it, using existing IT and process control system. Not only this, but companies can also leverage digital-enabled advances to create value in the manufacturing operations area. 

Incapability to keep pace with emerging and evolving digital technologies can make it difficult for companies to sustain in the US agrochemicals industry. Stay a step ahead by requesting free platform access from our procurement experts to gain detailed market insights.   

Sustainable agricultural practices 

Approaches such as Integrated Pest Management (IPM), that involve proactive monitoring of pest populations is leading to long term decline in major classes of crop protection chemicals. The greater adoption of IPM practices due to its ability to control pest populations without causing irreversible soil toxicity is increasing the demand for biologicals to a great extent. Despite increased interest and demands, biological still constitute less than 10 percent of overall crop protection sales. Agrochemicals and biotech companies should work on making biologicals more effective over their life cycle to increase their sales potential.

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