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Some Pesticide Makers See Profit in Chlorpyrifos Void

March 11, 2020, 10:00 AM

Smaller players in the pesticide industry are angling to take advantage of a new and perhaps finite window to sell the insecticide chlorpyrifos, even after the EU banned it and a growing number of states have moved to regulate it out of existence.

Corteva Agriscience, the world’s largest manufacturer of chlorpyrifos, announced last month that it would stop making the chemical by the end of the year, citing declining sales.

And chlorpyrifos—which has been linked to brain damage in humans, especially infants—is the target of a multistate lawsuit and legislation in five states to ban the pesticide. New York, California, and Hawaii have already passed laws to prohibit its use or sale. The European Union also banned it this year.

But despite the headwinds, chlorpyrifos, often sold under the brand name Lorsban, remains in use in most states.

“If Corteva isn’t able to meet the demands of the marketplace, we are well prepared to step in,” said Ram Seethapathi, president of Gharda Chemicals International Inc., a subsidiary of India-based Gharda Chemicals Ltd.

Decline in Organophosphates

In 1997, the chemical family called organophosphates, which includes chlorpyrifos, represented 40% of the global pesticide market. Today it’s just 5%, according to Corteva.

But some farmers say they still prefer chlorpyrifos over the newer insecticides, which may not work as well against certain pests.

“Corteva has been our manufacturer of choice for chlorpyrifos,” said Amy Asmus, co-owner of Asmus Farm Supply in Rake, Iowa, on the Minnesota border. “I guess we’ll need to turn to others to meet demand.”

Asmus said many farmers in her area still view chlorpyrifos as the best tool for controlling grain aphids, which can devour eight to 20 bushels of soybeans per acre.

In addition to Corteva and Gharda, other manufacturers of chlorpyrifos include Israel-based ADAMA Agricultural Solutions Ltd., and Denmark’s Cheminova, acquired in 2015 by U.S. chemical manufacturer FMC Corp.

According to Seethapathi, Gharda produces about 20% percent of the global supply of chlorpyrifos, with ADAMA and Cheminova making less than that.

Government Action

Chlorpyrifos is used on corn, wheat, citrus, soybean, and strawberry fields. Dow Chemical Co. developed the chemical in 1965 as an alternative to DDT.

Chlorpyrifos was also a common household pesticide until 2001, when the Environmental Protection Agency reached an agreement with Dow to end most residential uses.

The EPA went a step further in 2015, when during the Obama administration it proposed revoking all food residue tolerances for chlorpyrifos, which would have effectively ended use of the pesticide. But the agency, under the Trump administration, stopped that plan in early 2017—days before the EPA was scheduled to issue a final rule.

The agency finalized its decision not to ban chlorpyrifos on July 18, 2019. It has until Oct. 1, 2022, to complete a statutory registration review.

States Fighting Back

But state attorneys general in Oregon, New York, California, Washington, Massachusetts, Maryland, and Vermont filed suit in August in the U.S. Court of Appeals for the Ninth Circuit, arguing that the chemical should be banned due to the health risks.

Some states decided not to wait for either EPA or the courts to act.

California’s ban on chlorpyrifos sales kicked in Feb. 6. New York’s ban is set to take effect next year, and Hawaii will ban it in 2022. Lawmakers in Maryland’s Senate approved a bill to ban chlorpyrifos on March 3, while Oregon, Washington, Connecticut, and New Jersey are considering similar measures.

California environmental regulators have targeted chlorpyrifos for years, designating it as a “toxic air contaminant” that poses health threats when inhaled or exposed to skin.

Some farmers have already started switching to alternatives. Use of the chemical has been declining for years, according to data from the U.S. Geological Survey, and companies see a limited future for it in the long run.

“Chlorpyrifos represents a very small part of our portfolio, and sales continue to diminish as we introduce newer technologies to the marketplace,” FMC Corp. spokesperson Emily Parenteau said. “We do not anticipate any change to this direction.”

Financial Potential

But for now, a demand for chlorpyrifos remains. And Corteva’s exit could provide a chance for Gharda to increase sales outside of its primary markets in India, Asia, and South America, Seethapathi said.

“It’s a very competitive marketplace,” he said. “The bigger companies tend to have strong hold on retail distributors. So we’ve had to fly under the radar a bit, but chlorpyrifos is still one of our top-selling products.”

Besides the the direct manufacturers, other companies are also planning to stay in the chlorpyrifos market, as product formulators.

“You have to be cautious, but the potential is still there to make some real money,” said Stanley Bernard, vice president of Memphis-based Drexel Chemical, which buys generic chlorpyrifos on the open market and then formulates its own brands.

John Hobson, director of crop protection at The McGregor Co., an agricultural retailer serving states in the Pacific Northwest, expects growers to continue to use the chemical until the EPA registration is revoked, or chlorpyrifos is banned at the state level.

“The market is certainly declining, but there are still smaller crops where chlorpyrifos is really needed because they don’t have a lot of other options,” Hobson said.

“We’ve been selling quite a bit of private label chlorpyrifos already,” Hobson added, noting that Corteva’s exit “could bump that up a bit more.”

To contact the reporter on this story: Adam Allington in Washington at aallington@bloombergenvironment.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com; Rebecca Baker at rbaker@bloombergenvironment.com

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