Agchem sales off to slow start
RAIN stopped play for residual herbicide programmes this season, and many distributors have been left holding large volumes of unsold stocks, says Peter Corbett, arable marketing manager with Dalgety.
IPU usage is estimated to be 70% down on last year, with Avadex down 20%, pendimethalin down by 45%, and IPU/DFF combinations down 40%. However, prospects for the final sales of the contact combinations, including products such as clodinafop and fenoxaprop, could revive somewhat as growers switch tack to contact options for spring control of blackgrass.
Slug products have saved the day for agchem suppliers, with usage up by 45% – "it would have been more if product had been available". BYDV could be an unwelcome feature this season; insecticide sales are about half of last years figure, due to lack of spraying windows in the autumn, and virus transmission by aphids is a real risk, says Mr Corbett.
Last years widespread price cutting (see table) in the cereal fungicide market saved growers about 16% of their spray bills, he calculates. "We have never seen such a big, pan European shift on pricing before – which was some consolation for the low grain prices."
The price cutting is unlikely to be repeated this season, he says. "If the pound remains stable against the euro, product prices are likely to be static in most sectors this coming year. But if sterling weakens, then manufacturers will raise prices to keep the UK in line with the rest of Europe."
The cereal fungicide market was down by about 9% on the previous year, despite the larger area of wheat in the ground. However, these figures dont show the increase in the use of co-formulated products.
Mr Corbetts predictions for the coming season are of a huge uptake of strobilurin chemistry. Last year these products took 21% of the fungicide market – this summer he is expecting a 40% share, as growers switch away from straight azoles into Amistar. Landmark, Mantra and new strobilurin mixtures. Some supply problems might arise, he suggests. Dalgety figures would indicate demand outstripping supply by about 5-10%.
The extra cost of strobilurin programmes is likely to be justified in terms of a boost to performance. "Working to a fixed budget is putting your head in the sand. The return on investment from these new products is greater." However, more information on how much nitrogen is required when using strobilurin fungicides is desperately needed, he suggests.
Sales of Unix, a top selling fungicide in France, will also rise in the UK from 2% to 6%. "Unix can be difficult to justify in the UK at current costings," says Mr Corbett. "However, it could be useful on certain varieties which require specific programmes."
The new mildewicide quinoxyfen (sold as Fortress and Orka) could shoot up from 18% to 32% of the mildewicide market, at the expense of the traditional morpholine products. Mildew failed to make a serious impact on cereals last year, despite a warm and wet winter, and the mildewicide market fell. That scenario is unlikely to be repeated this season, he says.
Growth regulator programmes were hit by difficult weather last spring, and growers paid the penalty in terms of lodging, reduced grain weight and poorer quality, says Mr Corbett. They should try not to allow the same scenario this year.
The coming season will see continuing pressure on the agchem manufacturers, leading to further upheavals, company mergers and a reduction in the level of services offered in the UK, he concludes.
New face for Barclays on farms
BARCLAYS Bank is setting up a separate and unique banking structure, called Barclays Agricultural Banking. It brings together the network of 130 agricultural banking managers, who currently service farming clients around the country, in teams which will report to two agricultural directors, north and south.
John Page, managing director of Barclays Agricultural Banking, insists his staff will deal with agricultural and horticultural customers only, which will improve understanding of farming needs and problems.
Some easing of financial pressures are expected this season, says Mr Page. "Arable growers have benefited from higher potato prices, and cereal markets have steadied. The upward trend in farm incomes should be aided by the strengthening of the euro against the pound during 1999, helping farm gate prices and increasing the value of agricultural support payments. Costs are reducing, particularly for those borrowing, with further reductions in base rate over the past four months worth £150m to farmers in a full year. We are expecting further reductions in 1999."
However, some sectors will continue to suffer. Barclays liquidity ratios, which track the relationship between borrowing and credit balances, point to problems in the West Midlands pig sector. That has a liquidity ratio of 25 to 1; by comparison, the East Anglian arable sector has a liquidity ratio of just 1.7 to 1.
• Of the 94,000 farms in the UK, one in three banks with Barclays.
Product Fall in price Fortress 24%
Sportak Delta 22%
Fungicide shifts 1998