After the unexpected and "unprecedented" inventory destocking in 2023, the current global inventory levels of crop protection products have shown signs of normalization. Manufacturers are cautiously optimistic about the market in the second half of 2025, believing that the global crop protection market may usher in a turning point in the second half of the year. However, the improvement in the U.S. market is more pronounced, while the recovery in the European market remains weak.
Previously, in response to oversupply, price pressures, and sluggish agricultural product prices, leading agrochemical industry giants actively optimized production capacity and implemented cost-cutting measures. According to data from S&P Global Commodity Insights, the global crop protection products market size declined by 6.0% year-on-year in 2024, reaching approximately $75.4 billion. "Macroeconomic factors and declining crop prices in major markets have hurt farmers' incomes and limited market potential," the report noted. "Affected by channel inventory backlogs and price pressures, all regional markets have declined."
In the past two years, agrochemical companies have faced tough times. Chuck Magro, CEO of Corteva, admitted at the "Wolf Research Second Annual Future Materials Conference" that due to inventory destocking over the past two years, the company's crop protection business performance has been "lackluster." "We don't need to sugarcoat it—this has been a difficult period for the entire industry," he stated. Today, with stabilized inventories, expectations of demand recovery in key agricultural markets, and companies taking self-rescue measures, there is hope for improved performance of crop protection enterprises in the second half of 2025. Magro pointed out: "Most progressive farmers are still purchasing land and investing in infrastructure. The situation in 2025 will obviously be better than in 2024 and 2023, and channel operations have returned to normal." However, he also warned that weak U.S. agricultural product prices continue to squeeze profit margins in the crop protection market.
A negative factor is that the ongoing tense relations between the Trump administration and major trading partners may exacerbate inflation and impact the United States, the world's second-largest crop protection market. S&P believes that intensified inflation and export disruptions will further weaken U.S. farmers' incomes. Overall, the U.S. crop protection market is expected to grow by 2.1% in 2025, reaching $77 billion.
Currently, tariffs have not substantially impacted the profitability of crop protection companies. The temporary easing of tariff factors has reduced Corteva's full-year tariff impact estimate for its crop protection business from $50 million to $25 million–$30 million. David Johnson, Corteva's CFO, stated that the current tariff impact is fully controllable and emphasized that the company has effectively reduced risks through supply chain diversification and localized production. Corteva recently closed its Pittsburgh, California factory to optimize its production network.
Ronaldo Pereira, President of FMC, also noted at the "Wells Fargo 2025 Industrial Conference" that U.S. growers are still farming as planned, and the smooth start of the Northern Hemisphere planting season is rare in recent years. Although the result is not stunning, it is reassuring and will greatly help the recovery of the crop protection market.
Unlike the cautious optimism of U.S. companies, European crop protection enterprises face greater challenges. Bayer expects intensified price competition in the crop protection market in the coming quarters, mainly due to the surge in generic drug production capacity, especially in the glyphosate sector. U.S. manufacturers are almost unaffected in this regard. To address this, Bayer announced in May the restructuring of its German crop protection production and R&D system, aiming to discontinue operations in Frankfurt and streamline the Dormagen production base by the end of 2028. This move is intended to cope with severe overcapacity and vicious price competition from Asian generic drug enterprises, ensuring the competitiveness of its German bases.
