By Dan Jacobs, Senior Editor, CropLife
Biological solutions have always accounted for a tiny portion of the $234 billion crop input market (fertilizer, crop protection, plant growth regulators, and other). In recent years, however, biologicals have garnered an increased portion of the inputs segment and manufacturers’ research focus.
By one estimate, the overall crop input market is expected to grow at a 3.1% compound annual growth rate (CAGR) through 2030. The global ag biological market, on the other hand, is expected to reach $33.52 billion by 2030 (compared to $12.3 billion in 2022), a CAGR of 13.4%.
“We are applying all available scientific technologies to develop sustainable solutions that meet long-term economic, ecological, and societal needs,” BASF said in response to questions.
“Our innovation strategy focuses on developing integrated, sustainable solutions that help farmers secure and increase their yields,” the company continued. “BASF’s industry-leading position in sustainable agriculture is based on active R&D portfolio steering and sustainability criteria that are fully integrated into the entire process. Our strategy has sharpened our innovation focus around specific agricultural crop systems in key regions.”
While BASF doesn’t share how much of its nearly $1 billion research spend goes to traditional vs. biological products, it’s safe to say the amount dedicated to the research side has increased in the past decade.
“I am agnostic where technology stems from. I look for differentiation, margin potential along the value chain for all participants, patents, and field trials that include competitive solutions.”
“In 2023, BASF spent around €900 million ($977.2 million) in research and development in the agricultural solutions segment, representing around 9% of the segment’s sales,” BASF says. “Looking at the market, we are at a comparably high level with our peers in terms of our R&D budget.”
At some companies, like AMVAC, the focus of research is less on finding new biological solutions and solely on finding the right technology.
“I am agnostic where technology stems from,” says Bob Trogele, Global Agribusiness Independent Board Director, Investor, and Entrepreneur (and formerly Chief Operating Officer and Executive Vice President) at AMVAC. “I look for differentiation, margin potential along the value chain for all participants, patents, and field trials that include competitive solutions.”
Segment Drivers
There are many factors pushing manufacturers down the biological path.
“It’s no secret that the ag industry is losing some of its preferred chemical tools — whether due to increased regulation, consumer preference for lower residue levels, or simply due to resistance,” says Tim Eyrich, Product Development Lead, HELM Plant Advantage. “At HELM, we invest in the development of both biologicals and traditional chemistries. We are in a position where we can invest our research and trial budget product by product, alongside their counterparts in traditional crop protection.”
The company’s goal is to develop a full range of biological solutions.
“Through our investments in research and development, we aim to provide a whole-crop system approach to agronomic management.”
The drivers of effective biological crop protection products are well documented — among them environmental concerns, consumer demand, and regulatory changes. While regulations can increase costs and time to bring a product to market, there is a positive side to that oversight.
“As an innovative, research driven business, we welcome regulatory guidelines that are science-based and reliable,” BASF says. “We continuously develop our portfolio proactively and systematically steer it towards more sustainable solutions.”
In many countries regulatory bodies provide a faster track to approval for biological offerings. Understanding how to approach the varying regulatory rules is important.
“While biologicals face fewer regulatory hurdles than traditional chemistry, we must make sure that they are labeled correctly to avoid grower confusion and abide by the EPA’s parameters.”
“The regulatory strategy is key,” Trogele says. “We see many biorational solutions labeled as biofertilizers or [bio]stimulants to shorten the regulatory timeline and expense. This is something regulators need to optimize so technology can reach the market faster in the biorational segment.”
HELM’s Eyrich agrees the regulatory environment contributes to the segment’s growth.
“While biologicals face fewer regulatory hurdles than traditional chemistry, we must make sure that they are labeled correctly to avoid grower confusion and abide by the EPA’s parameters for what can and cannot be said about a product,” he says. “One of the main challenges within the biologicals segment is clarifying definitions. For example — what exactly is a biostimulant? In order to create simplicity and understanding in the marketplace, manufacturers need to arrive at a straightforward set of definitions for what product category each biological product falls into. This will aid in the regulatory process, as well as consumer understanding.”
For its part, Wilbur-Ellis has been providing biological products for many years.
“We've worked with biologicals for a number of years, starting with microbial-type products and mycorrhizae-type products that that help with overall soil health and help with the nutritional space,” says Darin Ebeling, Director of Agronomic Solutions, Wilbur-Ellis. “In the last maybe five years or so, we've really gotten into more of the biocontrol space primarily around the fungicides. But we have other things in the pipeline around biological — bioinsecticides, bioherbicides, biomiticide, and bionematicides as well as continuing our work on biofungicides, and nutrient-use efficiency.
To that end Wilbur-Ellis expects to release a biofungicide in the fall to be ready for the 2025 planting season — and with numerous other products in the pipeline, expect another couple in the coming years.
Changing Attitudes
At one time, biological solutions were primarily relegated to specialty crops. In the past several years, their use has expanded to many row crops.
“Five years ago, biologicals were looked at as, ‘Yeah, they’re nice to have — a softer chemistry, more organic,’ but we just didn’t have the control that we'd like to see. Over the last five years, so much work has been done, and we're seeing a lot better control than what we ever have before.”
“BASF focuses on improving agricultural outcomes in major crops, like wheat, canola, soybean, corn, cotton, rice, as well as fruits and vegetables,” the company says. “According to estimates from the Food and Agriculture Organization of the United Nations (FAO), these crops account for more than 50% of the world’s farmland, which is why innovations applied on such a large scale have the potential to make farming even more productive and sustainable.”
The company cites a new fungicide as an example of “how sustainability criteria have been introduced into our R&D process so that an innovation like Revysol meets the needs of our customers while also meeting the highest regulatory standards. For our whole portfolio, we are continually looking into improving our sustainability criteria which includes responding to regulatory needs and societal requirements across the globe.”
Along with changing regulations come changing attitudes. As the science and sentiment surrounding
“Five years ago, biologicals were looked at as, ‘Yeah, they’re nice to have — a softer chemistry, more organic,’ but we just didn’t have the control that we'd like to see,” says Wilbur-Ellis’ Ebeling. “Over the last five years, so much work has been done, and we're seeing a lot better control than what we ever have before. We're still trying to identify how biologicals fit into that conventional market space of crop production, how they fit into current programs, or how they fit into future programs to try to show a good ROI for the grower.”
Portfolio Management
There are many ways to expand the biological product portfolio. Manufacturers can license an existing product, partner with the company that developed it, or acquire the company outright. The economics around which approach to pursue are quite varied. And of course, the data proving its efficacy must be solid.
“It all comes down to the technology you’re looking at, each situation is different,” says HELM’s Eyrich. “It can be simpler to outsource to a third party to acquire a product; however, without any checks or research on your own organization’s part, you are relying solely on their research. It is crucial to test any new technologies both in the lab and in the field to ensure quality and consistency of performance.”
Deciding how much to invest in developing or acquiring a new technology varies by the company’s focus and long-term plan.
“When we are talking mostly formulations and field development for an established business, 2.5-5% of that segment revenue,” Trogele says. “For start-ups it can be as high as 50% or even more. A lot depends on the payback years, net present value (NPV), and internal rate of return (IRR) of any such project.”
There’s no one way to manage the portfolio when it comes to adding a biological solution.
“This must be decided on a case-by-case basis,” BASF says. “First and foremost, we at BASF are committed to deliver high-quality, well-performing sustainable crop protection solutions that meet the highest standards to farmers, independent whether it is a biological or a chemical solution.
“However, our approach to biological crop protection also includes working with smaller companies that deliver differentiating products, which we offer as part of our wider portfolio of crop protection, seed and digital solutions to maximize the value of a single product in combination with others for the farmer,” BASF says. “One example of how we deliver on this approach is our collaboration with Vivagro to jointly distribute the biological fungicide and insecticide Essen’ciel.”
“Nothing is easy. Buying allows for more margin and long-term portfolio stability. Licensing enhances the portfolio as the biological sector is very fragmented, and one company cannot optimize each micro segment on its own.”
At Wilbur-Ellis new product development focuses on market need.
“We start with identifying gaps within the market segments,” says Wilbur-Ellis’ Ebeling. “Is there a gap in the market as a whole; is there a gap in our portfolio that we can fill with biologicals? It goes back to what the grower needs.”
And once that is decided the next step is to figure out how to fill that gap. Companies use a variety of strategies including internal development, licensing, and acquisition. Each has its advantages and challenges.
“Nothing is easy. Buying allows for more margin and long-term portfolio stability,” Trogele says. “Licensing enhances the portfolio as the biological sector is very fragmented, and one company cannot optimize each micro segment on its own. Smaller companies that have focused on technology differentiation usually need two major items, market access to customers and/or financial support.”
For its part HELM Crop Solutions partners with a number of companies to find the products to bring to market.
“HELM is partnered with multiple biologicals researchers — Unium Bioscience, Alltech Crop Science, and Protergium,” Eyrich says. “These organizations present product options to HELM, and we collaborate with them to evaluate their potential to improve cropping systems. Before we consider a formulation, certain benchmarks need to be met. These are centered around genomics, ROI, and performance consistency. If a product doesn’t pass our process, we don’t proceed with it. Once potential products have been selected, we conduct genomic testing in the lab alongside rigorous, replicated field trials to establish whether we want to move forward.
If there is a concern rippling through industry, there is a pretty good chance someone is working on developing a solution — especially if it complements existing offerings. For example, nitrogen fixation has been a popular topic across agriculture.
“One area of focus for our research has been nitrogen use efficiency (NUE),” Eyrich says. “HELM is in a unique position when it comes to NUE and yield creation because, alongside chemistry, we are also a supplier of nitrogen in the ag input marketplace. Our goal is to make nitrogen more efficient and usable in the plant, and our research program reflects that.”
Using the licensing approach, Bayer Crop Science recently announced it has acquired the rights to launch a bioinsecticide for arable crops from AlphaBio Control. The product is expected to launch in 2028.
While biologicals continue to garner a larger share of research budgets, the long and somewhat checkered early history of these products still conjures memories of ineffective products. In addition, there does not seem to be a universally accepted list of products that claim the label of biological.
“Biological has become a loose term in the industry, which is why we talk about this category as our Plant Advantage portfolio because regardless of the term each product is created with the intention that we’re giving the plant an advantage to grow and reach its genetic potential,” HELM’s Eyrich says. “In many cases, our products are manufactured through fermentation. These metabolites can be produced more-or-less on demand and are shelf-stable. This method of manufacturing allows us to be precise in our inventory and production and gives us an avenue to differentiate against live microbes, which often are harder to handle.”
Despite the rapid growth of the biological crop protection segment, there is still plenty of room for growth.
“We've had the most success, so far, in specialty crops out West,” Wilbur-Ellis’ Ebeling says. “There is a growing need for some of those softer chemistries in those markets, especially in the fresh fruit and vegetable markets.”
Biological crop inputs can help food companies looking to manage their sustainability programs, Ebeling says. “They're looking for biological products that have good control to fit into those market spaces. But we're continuing to see a lot of adoption and a lot of interest in the row crop markets as well with biologicals.”
