The North American agrochemical market was valued at USD 33,610.3 million in 2020, and it is anticipated to reach USD 42,609.3 million by 2026, registering a CAGR of 4.1% during the forecast period (2021-2026).
Due to the emergence of the COVID-19 pandemic, there has been a supply chain disruption as the agricultural sector had to face labor unavailability, transportation barriers, restriction for market access, and lack of inventories in some regions. Many fertilizer and pesticide manufacturers have faced issues due to a lack of raw material availability, which has led to the reduction of various agrochemical product manufacturing. Thus, COVID-19 has caused a negative impact on North America agrochemicals market.
The agricultural agrochemicals industry in the region has been transforming over the years, with robust growth, coupled with changing crop mix trends and environmental regulations. There is an increasing need to balance the judicious use of the best chemicals and minimizing the impact of agrochemicals. Regulation plays an important role in this sector. Price premiums and innovative eco-friendly production methods are emerging steadily in the agrochemical market.
The rising population across the world, accompanied by rising affluence, is seeing a shift in consumption patterns. There is a need to not just increase production to meet demand but also to ensure that the nutritional needs of an increasingly affluent population are met. Shrinking arable land and loss of crops due to pest attacks lead to wastage, posing a critical challenge to ensuring food and nutritional security. According to the FAO, the demand for nitrogen fertilizers in the United States increased and was recorded as 14,594 thousand metric ton in 2019. Therefore, the demand for nutritional food with increasing use of nitrogen, strengthening of the market share through product launches, and regulatory measures may drive the market during the forecast period.
Key Market Trends
Rapid Adoption of Bio Based Agrochemicals
Bio-based agrochemical products that can not only improve yield but also positively affect harvest grade and sizing in specialty crops, along with shelf life and nutritional quality, are gaining interest. The Environmental Protection Agency (EPA) is committed to encouraging the development and use of biopesticides and considers them inherently reduced-risk pesticides. EPA’s Office of Pesticide Programs (OPP), along with the Office of Chemical Safety and Pollution Prevention (OCSPP), works with 10 Regional Offices in North America and other EPA program offices on a wide range of pesticide issues and adopting biopesticides.
According to the USDA, in the 2019 Organic survey, there were 16,585 certified organic farms, a 17% increase from 2016, which accounted for 5.5 million certified acres, an increase of 9% over 2016. The organic farmland increased from 3.13 hectare to 3.65 hectare, as the farmland is increasing, the sales of certified organic products increased US farms and ranches sold nearly USD 7.60 billion in certified organic goods in 2019.
One of the key factors driving the biopesticides market is greater investment in R&D since the major agrochemical companies are increasing their investments in the research and development of new and improved biological solutions for the consumers. Therefore, a rapid rate of adoption of organic farming, along with active participation of the players in developing new products, is expected to drive the overall agrochemicals market during the forecast period.
United States is Dominating the Market
As reported by FAO, soybean yield has increased from 33,133 hg/ha in 2017 to 33,997 hg/ha in 2018, whereas the area under soybean production has decreased from 36,236,750 ha in 2017 to 35,448,420 in 2018. This increase in yield clearly indicates the rocketed use of agrochemicals in the country.According to National Agricultural Statistics Service (NASS), about 96% Soyabean crop is grown in the mid-west states of the country. The fertilizer use in these areas has increased from 29.0% nitrogen application in 2018 to 32.0% in 2020. This increase resulted in the expansion of the market in the country. Therefore, increasing food demand in the country indicates the more use of agrochemicals, along with favorable environmental regulations coupled with strategic partnerships among the major market players, are anticipated to drive the market in the country.
The North American agrochemical market is a highly consolidated market, with the major players accounting for major share in the market in 2020. Companies such as BASF SE, Bayer CropScience AG, Archer Daniels Midland Company (ADM), Syngenta AG, Corteva Agriscience, Nufarm Ltd, and FMC Corporation are the major players in the market. These players in the market are competing to hold a consistent share in the market through various strategies such as mergers and acquisitions, partnerships, expansions, and product launches.
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