September 5, 2018

Straight from nature, have biological products found a permanent spot in growers’ crop production toolbox?

By Barney Bernstein, Senior Associate  

Beneficial bacteria are all the rage these days. Using naturally derived biological products is a promising concept in many aspects of life. Bacteria have been used to clean up oil spills in oceans. Some can clean toxic byproducts from manufacturing processes that get carried away in waste water, and others can break down non-biodegradable plastics. Even in our bodies, “good bacteria” in probiotics have become a popular way to improve our gut microbiome, to boost our immune systems, and improve our mental health.

In our industry, biologicals are rising in prominence and being hailed as a viable and environmentally friendly crop production tool. Most are approved for organic production practices. Biopesticides and biostimulants are the main players in this class of products. Biologicals are generally living organisms and/or naturally occurring chemical agents that protect crops, manage soil nutrients and/or improve nutrient uptake. They are considered sustainable because they provide an environmental benefit such as improving soil tilth or reducing the use of synthetic chemicals. They reduce the carbon footprint vs. synthetic products that are petroleum based.

Naturally occurring and gentle on the environment—what’s not to love about these mighty microbes?

When biological products first came to market, it was the result of startups finding something interesting and quickly promoting it on a national scale. But, they didn’t have the depth of research necessary to understand product performance across different soils and climates. Perhaps the discovery was made and showed promise in Pennsylvania, but that doesn’t mean they produced the same results in California. The lack of sufficient trials to substantiate claims made a pretty sour first impression—and biologicals often were referred to as the “snake oil” of agriculture.

However, today biologicals are becoming mainstream. Reports consistently project ag biologicals growing into a $5 billion market by 2020, up from under $1 billion at the start of this decade. Biologicals are gaining traction. They are now viewed as a credible tool for crop protection, fertility management and plant health. They have captured attention of entities with the resources to develop and successfully commercialize them — most notably from major ag chem manufacturers and private equity investors, who are opening their wallets to get in on the action.

Staying Power

It’s not a question anymore of who is getting involved with biologicals, but who isn’t. The widespread attention has helped boost confidence that we’ve moved beyond snake-oil status. Here are some key indicators that make use believe biologicals are holding their ground:

Ag chem heavyweights are backing them.

Over the past eight years, companies like Monsanto (now Bayer CropScience), BASF and Syngenta have embraced biologicals and brought more scientific rigor to the market—conducting large-scale field trials over multiple years and in different environments. This allows them to know where and when a product will provide reproducible results. Biologicals are a different kind of science than the majors are used to. Unlike synthetic chemicals, where the modes of action are already largely understood, biologicals require a great deal of trial and error to find what works from thousands upon thousands of microbial strains. The good news is these companies know how to test in various environments and they have the resources to do it—and they’re giving new life to a market that previously was struggling.

Private equity investments are growing rapidly.

Investors are watching the market closely to seize investment opportunities, and for good reason. The industry is proving that there’s real value in evaluating microbes for pesticidal or growth regulating activity, or nutrient release—just seeing it’s a viable area for future revenue has bolstered its appeal. But another part of the allure from investors’ point of view is that these products take less time and money to develop because they don’t require the same arduous regulatory processes as synthetic chemicals. Biologicals are a lower-risk investment—R&D timelines are shorter and costs are lower, so a return on investment can be gained more quickly.

Retailers are getting on board.

Retailers are pushing the use of biologicals at an increasing rate. Most major distributors carry their own lines of biopesticides, biostimulants and/or biological nutrient management tools. When companies like Winfield-United can predict ROI with success by conducting their own trials, which they are doing through their robust Answer Plot program, it generates believers. Growers are more willing to give these products a shot when they see the endorsement from their trusted advisors.

It suits today’s food culture.

Biologicals are viewed as more natural tools for crop production, which plays to social desires for “cleaner” food. With pressures domestically and abroad to become less reliant on synthetic pesticides, biologicals potentially offer a favorable alternative. I do believe biological products are most effective when incorporated with traditional chemicals as part of an integrated system, but these products widen the crop protection arsenal and give growers access to new modes of action with very low environmental impact.

Challenges Still to Overcome

Momentum and popularity are building, but the road ahead still has some rough patches to iron out.

There’s currently no regulatory regimen and no consistent protocols for biologicals. The lack of harmony that plagues other sectors of the industry is rampant here as well—without a standard protocol across continents, every market across the globe is approaching biologicals its own way. And there’s no standard definition for what makes a biological.

Testing, while much-improved, must continue to expand. The good news is with ag chem giants pumping more resources into the effort—like Monsanto did with Novozymes and The BioAg Alliance—they can handily complete the extensive field testing required to evaluate performance across many environments and build confidence that the products will live up to their claims.

Trying to grow microbes in a lab from environmental samples is very difficult. It’s not an exact science like formulating synthetic chemicals: Biologicals only grow in certain areas, under certain conditions, so that’s why testing is so important and must be ongoing. Often, researchers get only a limited number of populations to inoculate and grow, so seeing the full spectrum of potential is still a challenge.

There are operational challenges as well, including proper application techniques and storage—biologicals are living organisms, so they must be handled with greater care than their hardy synthetic counterparts.

Are You Looking at Biologicals?

The perception of biologicals has taken a positive turn in the market, mostly because we have solid research that translates to on-farm performance to prove their value. As companies evaluate where and how they can get in on the action, Entira can assist with understanding market opportunities and developing a go-to-market strategy. We’re able to help companies of any size with business development efforts and to prepare for pursuing venture capital or private equity investments.

If you would like to explore where your company fits in to the surging wave of biological solutions for agriculture, contact Barney Bernstein at bbernstein@entira.net or 919.830.6527.