(Bloomberg) -- Farmers shelling out $37 billion a year to drench fields in liquid weed killers are increasingly trying out a new model: use tech to use less.
After almost a century of deploying a more-is-more approach to chemical herbicides, the global agricultural sector is rapidly rolling out advancements that promise to curb the use of weed-control sprays by as much as 90%. Using artificial-intelligence powered cameras, the new sprayers can identify and target invasive plants while avoiding the cash crops. If even a fraction of growers adopt the new tools, it could mean a big shift for crop-chemical majors like Bayer AG and BASF SE.
“Though they don’t widely acknowledge it, they realize selling millions of gallons of product is a blunt and fading model,” Jason Miner, global head of agriculture at Bloomberg Intelligence, said of the herbicide industry.
Crop protection is a big business, valued at about $79 billion in 2022, according to S&P Global, with herbicides comprising almost half of the overall market. In the US, weed killers are used on 96% of planted corn acres, compared to 19% of fields that are treated with fungicides and 14% with insecticides, according to a 2021 US Department of Agriculture survey. About 28% of cropland gets sprayed via aerial applications, but the vast majority relies on ground sprayers.
Using less weed killer through precision applications can help cut costs for growers whose overall incomes are expected to inch lower in 2024. There are also environmental reasons to consider pulling back. So-called drift from one field to another can damage crops and harm animals, incentivizing more targeted use. Drift can lead to expensive lawsuits, such as ones claiming dicamba made its way to neighboring acreage.
Crop chemicals have also faced costly legal action related to human health. Bayer has already spent about $10 billion of the $16 billion it set aside to handle the mass US litigation over Roundup, the blockbuster weed killer it acquired when it bought Monsanto that tens of thousands of plaintiffs insist caused their cancer. Bayer maintains that the product — and its key ingredient, glyphosate — is safe. Europe’s drive to reduce chemical pesticides by half by 2030 has given further incentive to change tact.
Machinery makers big and small are pushing out solutions. The world’s top tractor maker, Deere & Co., is in the second year of selling its top-of-the-line crop sprayer that it says can cut chemical applications by as much as 77% using AI and machine learning. Israel-based Greeneye Technology just opened its first US retail location to sell AI-powered spray booms that can be retrofitted onto any existing machine, with plans to expand to eight additional states next year. Brazil’s Solinftec is building robot sprayers at an Indiana factory that it says lets growers cut herbicide volumes by more than 90%.
“The chemical companies cannot fight against the reduction of herbicides,” said Guilherme Guine, Solinftec’s chief sustainability officer. Such technology is a “threat for sure because they drastically reduce the amount of inputs.”
So far, the emerging tech is still small scale and doesn’t appear to be having much impact on chemical makers’ bottom lines. But that doesn’t mean they are sitting idly by. Some companies are trying to get out ahead, including by working more closely with equipment manufacturers and adding new service models that provide farmers with agronomic advice.
“They’ve tried to position themselves to sell ‘better yield on your acre’ by effectively offering consulting and prescriptions,” Miner said.
BASF, for instance, has a joint venture with technology provider Bosch called One Smart Spray that automatically applies product only where needed and integrates weed mapping that helps farmers track cost savings in real time on a mobile phone application. Bayer, which has been talking for years about shifting from “volume to value” when it comes to crop-protection solutions, has developed its own AI-backed tool to spray chemicals that farmers can use when they buy a subscription.
Overall, Bayer said the new spraying advancements from the industry would be “neutral” overall as chemical companies shift along with farmers.
“We are totally aligned with companies like Deere and others in the automation and equipment space that have this aspiration to help a farmer really be better in terms of precision use of the various inputs that they use,” said Bob Reiter, global head of research and development for Bayer’s crop science division. “We want to maximize the output the farmers can create but minimize the inputs that they’re using.”
And while chemicals applied after weeds emerge are largely expected to decline with the new technology, some farmers may need to apply more product known as residual herbicides earlier in the process, said Matt Leininger, managing director for North America and Australia at the Bosch-BASF JV, helping to buffer the sector.
“The easiest way to control a weed is not to let it up,” Leininger said.
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