Bayer Expected To Take A Short Financial Hit From Federal Dicamba Ban
German biotech giant Bayer AG could lose tens of millions of dollars from a federal ban this week of its widely used dicamba weedkiller.
The Environmental Protection Agency halted sales of three dicamba products, including Bayer’s XtendiMax, after a federal appeals court ruled last week that the herbicide could not legally be sprayed over crops.
Research from Midwestern weed scientists has shown that dicamba has damaged millions of acres of crops in the U.S. Hot weather can cause the chemical to drift and ruin crops miles away.
In February, a federal jury ordered Bayer to pay $265 million to a southern Missouri peach farmer for the damage that dicamba caused to his crops. The company is appealing the lawsuit.
Selling its dicamba-resistant soybean seeds and other herbicide products could help the company recover from revenue losses, said Carol Johanek, a marketing professor at Washington University.
“That’s where I would see a lot of their growth being recouped from this episode,” Johanek said. “And a lot depends on what happens to that lawsuit.”
Analysts predict that Bayer could lose more than $100 million in sales, Bloomberg reported. Bayer officials are still reviewing the EPA’s order, a company spokesperson said in an email.
“Bayer stands fully behind XtendiMax, and we will continue working with the EPA, growers, academics and others to provide long-term access to this important tool,” a Bayer spokesperson said.
The appeals court decision would disrupt the growing season for farmers who already have planted their seeds, said Blake Hurst, president of the Missouri Farm Bureau.
“It is far too late in the season to strip them of the tools that they have counted on for a successful year,” Hurst said in a letter to the EPA’s Office of Chemical Safety and Pollution Prevention.
Farmers will still be able to use the dicamba herbicides they have on hand until July 31.
Farming and conservation groups the Center for Food Safety and the Center for Biological Safety asked a federal appeals court Friday to hold the EPA in contempt for allowing farmers to continue spraying dicamba. They argued that the EPA’s order could allow farmers to spray 16 million pounds of dicamba this summer, which could damage habitats for endangered species near agricultural fields.
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