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Bayer AG declared a force majeure on Feb. 11, meaning it may not be able to meet its sales agreements.

Bloomberg, Content provider

February 15, 2022

1 Min Read
Leonid Eremeychuk / iStock / Getty Images Plus

By Elizabeth Elkin and Tarso Veloso Ribeiro

A supply crunch is threatening to cause a spike in prices for the world’s No. 1 weedkiller, making it even more expensive for farmers to grow food.

A major supplier of an ingredient in glyphosate — an herbicide that’s widely used by corn, soy, cotton and other farmers around the world — shut down production due to mechanical failures, and repairs could take three months. Bayer AG, the maker of Roundup, whose active ingredient is glyphosate, declared a force majeure on Feb. 11, meaning it may not be able to meet its sales agreements.

That’s likely going to lead to a supply crunch, according to a an emailed statement by U.K.-based analysis company AgbioInvestor, as well as higher prices at a time when farmers are already experiencing soaring costs for everything from seeds to fertilizers. Rising production costs are part of what’s behind near-record global food prices.

“These impacts will place farmers under further pressure in a number of key markets” where costs are up, according to the statement.

Farmers are anxious. Aprosoja, an association of soybean producers in Brazil’s top-producing state Mato Grosso, sent a letter to Bayer’s chief executive officer in Brazil asking for assurances that there will be no shortages of glyphosate. Over 90% of soybeans grown in Brazil are genetically modified to resist glyphosate. 

“Problems within industrial structures are not atypical events, and that’s why corporations as big as Bayer have contingency plans” that the group wants to be informed of, Aprosoja’s president Fernando Cadore said in the letter.

Bayer has previously said that glyphosate pricing gained 25% between January 2021 and November, and the company expected prices to keep rising. 

To contact the authors of this story:
Elizabeth Elkin in New York at [email protected]
Tarso Veloso Ribeiro in Chicago at [email protected]

© 2022 Bloomberg L.P.

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