U.S. farmers struggling with slumping incomes and depressed grain prices have been switching to cheaper generic pesticides and fungicides as they plan for spring planting next year, which market analysts said could hit the bottom lines of agrichemical companies.
Signs of these financial impacts are already emerging. Bayer shares fell sharply to a 20-year low last week, after the chemical company warned that weak global agricultural markets and a slumping U.S. farm economy are likely to pressure profits further. Analysts said agrichemical competitors Syngenta, Corteva, and BASF could also face challenges in the sector. Reuters reports nearly one-third of all the pesticides and fungicides that Paul Butler uses on his Illinois soybean and corn farm are generic to help him cut costs in a tight year. Midwestern distributors and grain elevators say they have seen customers cutting back their spring pesticide and herbicide budgets.
