Production Outlook

Regulatory Decisions Loom, Pest Control Costs Rise

Emily Unglesbee
By  Emily Unglesbee , DTN Staff Reporter
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The use of Bt corn hybrids is just one of the many tools awaiting a regulatory decision from the EPA in 2016. (DTN photo by Pamela Smith)

ST. LOUIS (DTN) -- Patience and caution will be the virtues of choice for growers in 2016.

Farmers are accustomed to pests dictating their farm management, but it can be harder to wait on a distant agency in Washington, D.C., to tweak tools and change the rules for producers. The EPA is examining a trove of pest-control tools, from the use of Bt traits to neonicotinoids and the herbicides designed to complement Monsanto and Dow's new herbicide-tolerant crops. The agency's decisions on these will have big implications for farmers, but the timeline for most of them remains murky.

In the meantime, weed and insect resistance is racing ahead and will demand more inputs even as profit margins tighten. Growers will need to be inventive but resist the urge to slash pest control costs for short-term gains.

A NEW REGULATORY ERA?

The EPA made some bold moves in production agriculture in 2015, the majority of which were inspired by lawsuits filed in the U.S. Ninth Circuit Court of Appeals.

Following lawsuits there, the agency banned future sales of sulfoxaflor, the active ingredient in Dow AgroSciences' Transform WG insecticide, and proposed a ban on another Dow chemical, chlorpyrifos, the organophosphate ingredient in Lorsban. Most surprising, however, was the agency's decision to petition the court to revoke its registration for Enlist Duo, Dow's pre-mix of glyphosate and 2,4-D designed to be used on its Enlist corn and soybeans.

These decisions were preceded by the agency releasing a report criticizing the economic need for neonicotinoid seed treatments for Midwestern soybean growers late in 2014. The report is awaiting finalization by the agency and no one knows what its conclusion will mean for the chemicals, which are under registration review.

The EPA is also mulling comments on a 2015 report proposing restrictive new rules on the use of Bt-corn hybrids with proteins targeting the western corn rootworm. As it stands, the proposal would limit when and how farmers in "hotspots" of intense Bt-resistant rootworm infestations can use Bt hybrids, crop rotation, soil and foliar insecticides and conventional hybrids.

So what does this mean for producers in 2016? Brace for a brave new regulatory world, some industry players suggested.

"I've been in the business for quite a while, and I would say at the present time, EPA is asking different questions from the ones they've asked in the past," Bayer CropScience's product safety manager Iain Kelly said of the agency's scrutiny of neonicotinoid seed treatments in soybeans.

Syngenta's regulatory team leader John Abbott agreed. "We are clearly seeing some changes at EPA in the way that they are operating," he told DTN. "It seems like every decision that the agency makes is under scrutiny -- which is fine --- but it's all tying back to lawsuits and that is creating some angst at the agency and probably driving a good bit of their changing process."

Farmers and their production practices will also be under heightened scrutiny in the coming year, noted University of Missouri weed scientist Mandy Bish. "This shows the general concern the public has over these products," she said of the EPA's request to review Enlist Duo. "It shows that there will be stricter enforcement of herbicide management as we go along."

WEEDS TAKE FRONT STAGE

Herbicide-resistant weeds promise to be among the most pressing production problems for many growers in the coming year. Glyphosate resistance is increasingly commonplace in broadleaf weeds, and now grasses down South are also outsmarting the herbicide. The latest victory for weeds is Palmer amaranth populations in Arkansas and Tennessee are showing resistance to PPO-inhibitors, a class of herbicides that its cousin weed, waterhemp, has long shown tolerance to in the Midwest.

Monsanto's Roundup Ready 2 Xtend crops, which are engineered to tolerate glyphosate and dicamba, are still awaiting Chinese import approvals, and the complementary herbicide is under review by the EPA. Dow's Enlist Weed Control System, which will tolerate glyphosate and 2,4-D, is in a similar holding pattern with China, and the future of its Enlist Duo herbicide is now uncertain.

That means farmers have no new tools and fewer old tools this year.

Even if Monsanto and Dow were able to commercialize Xtend and Enlist tolerant crops in time for the 2016 season, weed management will not be easy.

Since a large number of growers face glyphosate resistance in their fields, these new products only supply one additional mode of action, Bish cautioned. That means they will need to be rotated with other herbicides, and growers will need to use more pre-emergence and residual herbicides. Illinois research in 2014 also showed herbicide and crop rotation is not enough to prevent resistance. Using multiple sites of action is required to keep resistance at bay.

The new trait-tolerant systems have met resistance from the general public. Their use will come with heightened chance of drift and injury potential, not only for non-tolerant row crops nearby, but also fruits, vegetables, and ornamentals, which are quite susceptible to both dicamba and 2,4-D, Bish said.

"If we don't manage these new traits properly, there's a good chance we'll damage that relationship with the general public a little bit more," she said. "Spray applicators in some ways are like major league umpires or NFL referees -- if they're doing a good job, no one really notices, but the minute something goes wrong, then everyone knows your name."

CUT COSTS CAREFULLY

These production issues come at a time of weak commodity prices and tight margins that will push growers to re-evaluate their input programs.

In a report on row-crop costs from University of Illinois, researchers estimated that even farmers on the most productive land in the central part of the state lost more than $100 per acre on their corn and soybean acres this year after all input costs were accounted for. The researchers predicted that those losses will drop in 2016 -- largely due to drops in fertilizer and fuel costs -- but farmers will still operate in the red.

Producers' biggest production costs, seed and pesticides, will likely hold steady, the report concluded.

It's hard to dodge those input costs, but farmers will try. Cheaper conventional seed is growing in popularity, and the first publically available generic Roundup Ready (RR1) soybeans flew off dealers' shelves in 2015, although supplies were limited.

Growers should be careful when trimming herbicide costs, University of Illinois weed scientist Aaron Hager said. "There are several viable options to reduce herbicide costs, but remember that hybrids and varieties, even those with the highest yield potential, will not realize their yield potential if weeds are not adequately and timely controlled," he warned in a university Pest Bulletin post. Hager estimated that a farmer who neglects to use soil residual herbicides on a glyphosate-resistant waterhemp in a soybean field could stand to lose at least 20% of potential yield.

"Keep in mind, especially while planning 2016 weed management programs, that wise investments to manage weeds before interference reduces crop yields will realize a return through more bushels harvested at the end of the growing season," he concluded.

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Editor's Note:

Each year, DTN presents an outlook series on what is expected for the year ahead in various areas of agriculture. This is the second story in a series DTN is running that looks at what farmers can expect as the hot topics for 2016 in areas such as farm finance, land prices, ag and the environment, agricultural policy, crop inputs, livestock, transportation and others. We welcome your feedback on what you think the year will be like at talk@dtn.com.

Emily Unglesbee can be reached at emily.unglesbee@dtn.com

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Emily Unglesbee