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Economic and Pest Management Evaluation of NGN Insecticides In Economic and pest management evaluation of nitroguanidine-substituted neonicotinoid insecticides: eight major California commodities Prepared for the Department of Pesticide Regulation by the California Department of Food and Agriculture’s Office of Pesticide Consultation and Analysis, the University of California, and the University of California Cooperative Extension Rachael Goodhue1, Kevi Mace1,2, Tor Tolhurst1, Daniel Tregeagle5, Hanlin Wei1, Jessica Rudder1, Beth Grafton-Cardwell3, Ian Grettenberger1, Houston Wilson3, Robert Van Steenwyk4, Frank Zalom1, John Steggall1,2 1University of California, Davis, California 95616 2California Department of Food and Agriculture, Sacramento, CA 95814 3Department of Entomology, University of California, Riverside, California 92521 4University of California, Berkeley, California 94720 5North Carolina State University, North Carolina 27607 July 29, 2020 2 Executive Summary In 2018 the California Department of Pesticide Regulation (DPR) released its risk determination for four nitroguanidine-substituted neonicotinoid (NGN) insecticides: clothianidin, dinotefuran, imidacloprid, and thiamethoxam (Troiano et al. 2018). This was followed in 2020 by a draft proposed regulation detailing mitigation measures to protect managed pollinators. Our report uses economic data and pesticide use data from 2015-2017 to analyze the economic and pest management implications of the draft proposed regulation for eight focal crops: almond, cherry, citrus, cotton, grape, strawberry, tomato, and walnut. From 2015-2017, these crops accounted for approximately 90% of total acres treated with NGN and 89% of NGN use by pounds of active ingredient (AI) applied in treatments that would have been affected by the draft proposed regulation (not all crops would be affected). They also accounted for over 60% of the value of California’s field crop, fruit, nut, vegetable, and melon production and over half of its agricultural exports in 2017 (CDFA 2018a; UCAIC 2018). The draft proposed regulation includes limitations on the number of NGN active ingredients applied to a field in a season, timing restrictions on applications, and use rate restrictions. The applicable restrictions are crop-specific. Overall, annual net return losses for the crops considered would have totaled $13.603 million in 2015, $12.785 million in 2016, and $11.085 million in 2017 if the draft proposed regulation had been in effect (Table ES-1). Net return losses occur if gross revenues decline as a result of decreased yield or if costs increase. The net return loss in this study is due entirely to cost increases because no yield losses are anticipated for these eight crops with the proposed restrictions. The costs considered are the treatment costs of replacing NGNs with alternative AIs during times in which they are restricted or prohibited by this regulation, including material and application costs. We calculate the total annual loss for each of the three years by comparing the cost of an alternative treatment to that of each application of an NGN actually made that would have been prohibited under the draft proposed regulation. Loss estimates do not include losses owing to the more rapid development of resistance to remaining active ingredients by pests for which NGNs are part of the current management program. Chlorpyrifos would have been considered an alternative for multiple crop/pest combinations in this report based on its use in 2015-2017, but, due to the withdrawal of all non-granular chlorpyrifos products in 2019, it was omitted here. 3 Table ES-1. Estimated Changes in Costs by Crop and Year ($1,000s) Crop 2015 2016 2017 Almond -20.8 11 -4.6 Cherry -12.5 1.8 -8.6 Citrus 2,906 3,272 2,888 Cotton 755 1,439 1,839 Grape Raisin and table 194 267 256 Wine 354 382 617 Strawberry 384.5 193.8 207.4 Tomato Fresh market 1,267 1,516 1,229 Processing 7,776 5,703 4,781 Walnut 0.31 0.38 0.16 Total 13,603 12,785 11,805 Almond. Almond is California’s second largest agricultural commodity in terms of value of production, ranked behind milk and cream. Gross revenues totaled $5.6 billion in 2017 and exports were $4.5 billion (CDFA 2018a; UC AIC 2018). Clothianidin is the only NGN currently registered in almond. Imidacloprid was registered until 2015 and growers are allowed to exhaust inventory, so some use was reported during 2015-17. Neither NGN is applied to a substantial share of almond acreage. In 2017, NGNs were only applied to just under 38,000 out of over 1.3 million acres planted. The insects most commonly targeted with these NGNs are leaffooted bugs, stink bugs, and San Jose scale. There are effective alternative AIs for each pest. Under the draft proposed regulation, roughly 77% to 90% of the pounds of AI applied and 81% to 94% of the acres treated would be permitted per year. Switching to alternatives for treatments that would have been prohibited would lead to a 22.2% increase in cost on acres using imidacloprid and a 17.9% decrease in cost on acres using clothianidin. Based on acres treated annually for the years 2015-2017, the change in treatment costs for acres treated with NGNs when alternatives must be used ranges from -6.9 to 4.8% of the cost of using NGNs on those acres, depending on the year. The total change in costs to almond from the restrictions on NGNs is small, ranging from a cost decrease of $20,800 to an increase of $11,000 over all affected applications. This is due to the off-setting effects of the reduction in treatment costs for some alternatives and the small acreage treated with NGNs. Costs due to the regulation would decline once existing imidacloprid product is exhausted. Cherry. In 2017, gross revenues were $330 million for sweet cherry and exports were $99 million (CDFA 2018a; UCAIC 2018). All four NGNs are registered in cherry; however, only imidacloprid and thiamethoxam are regularly used. Under the draft proposed regulation only 1.6% to 5.1% of acres treated and 1.5% to 12.6% of pounds of AI applied would have been allowed per year. Imidacloprid and thiamethoxam are mainly used against black cherry aphid, cherry leafhopper, and mountain leafhopper. If the target NGNs were restricted in cherry, the percent change in total treatment cost on all acres that would have used alternatives instead 4 would range from -2.2% (2015) to 0.3% (2016). These percentages correspond to a total cost decrease of $12,469 and a cost increase of $1,750, respectively. The net effect is small because switching to imidacloprid alternatives increases costs due while switching to the thiamethoxam alternatives decreases costs. Citrus. Citrus—specifically grapefruit, lemon, orange, mandarin, and their hybrids—constitute one of California’s top ten most economically important commodities by value, with $2.2 billion in gross revenues and $971 million in exports in 2017 (CDFA 2018a; UCAIC 2018). NGNs are used to manage glassy-winged sharpshooter (GWSS), citricola scale, citrus leafminer, Fuller rose beetle, and Asian citrus psyllid (ACP). They are also used to treat harvested citrus before it is shipped to combat the spread of insect pests. Controlling GWSS, which vectors Pierce’s disease, in citrus is essential to keep it from invading vineyards, where the disease is devasting. In addition, NGNs are part of the area-wide programs for managing GWSS in citrus. Two NGNs are registered for California citrus, imidacloprid and thiamethoxam; both would be restricted. There would be more restrictions on imidacloprid than on thiamethoxam. Under the proposed regulation, only 31.1% to 33.1% of acres treated, and 9.9% to 11.3% of pounds applied would have been allowed per year. The substantial difference between the acreage and volume shares is due to the prohibited treatments having relatively high application rates. Switching to alternatives for applications that would have been prohibited would lead to a cost increase of 51% to 55% for those applications. The cost increase is small in dollar terms, however, leading to a total cost increase ranging from $2.9 to $3.3 million on acreage treated with imidacloprid or thiamethoxam. There are two critical caveats regarding this estimate. One is that while there are fewer impacts of the thiamethoxam restrictions during the growing season, its pre-shipment use in citrus would be hit hard. The specific economic effects of pre-shipment use are not included here because that type of use cannot be differentiated from other uses. Second, apart from the estimated cost increases considering the current pest management situation, citrus could sustain significant losses from invasive species in the future. Citrus is vulnerable to invasive pest species, and imidacloprid is especially useful for invasive species management because it is broad spectrum, effective, and relatively compatible with current pest management strategies in most citrus regions. Currently, citrus faces significant potential losses due to a specific invasive, ACP. Imidacloprid is a vital component of ACP control programs for commercial and residential citrus. Without the use of imidacloprid, the deadly bacterial disease vectored by ACP, huanglongbing (HLB, or citrus greening disease), will spread at a faster rate in the state, jeopardizing the entire industry. HLB kills citrus trees and there is no known cure once trees are infected. Managing ACP populations is one of the only ways to slow the spread of HLB. Economic losses from widespread HLB would be significant and are not included in this report. Emergency pest control programs run by CDFA, such as for HLB, would be exempt from this regulation. Growers, however, would not be exempt unless they were under a declared emergency for HLB, which only covers a small number of growers currently. For the purposes of estimating pest management costs in this analysis, growers were not assumed to be under a declared emergency, which makes the cost estimate an overestimate to an unknown extent.
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