Innophos Holdings Inc., Cranbury, N.J., announced on July 2 that it has entered into a three-year Purified Phosphoric Acid (PPA) supply agreement with Nutrien. The new agreement will go into effect on July 30, 2018, and replaces the existing long-term agreement that Innophos had with PCS Purified Phosphates, a unit of PotashCorp of Saskatchewan Inc.

Under the terms of the agreement, Nutrien will continue to supply Innophos with PPA, a key raw material in the manufacture of Innophos’ phosphate product portfolio. Innophos said the third-party supply agreement supplements its own internal PPA production and ensures security of supply, enabling Innophos to continue to serve its customers.

“The new PPA agreement with Nutrien is an important step forward in sustaining Innophos’ leadership position and supporting our commitment to provide our customers with our market-focused specialty phosphate portfolio serving the food, health, nutrition, and industrial specialties end markets,” said Kim Ann Mink, Ph.D., Innophos chairman, president, and CEO. “By securing ongoing access to a high-quality, external supply of PPA from Nutrien, we are able to supplement our internal PPA capacity in order to efficiently serve our valued customer base without interruption. As part of our broader strategic manufacturing optimization initiative, we continue to evaluate additional opportunities to further optimize the security and cost profile of our supply chain over the long-term.”

The original supply agreement with PCS was dated March 23, 2000. In June 2016 (GM July 1, 2016), however, Innophos notified the Securities and Exchange Commission that it had received written notice that PCS Purified Phosphates did not wish to extend the terms of the PPA supply agreement beyond July 29, 2018.

Archer Daniels Midland Co. (ADM) announced on June 18 that it has signed an exclusive fertilizer handling and storage agreement with Allegiant Bulk Solutions, utilizing a 5,000 mt warehouse in Yorkton, Sask. The warehouse will be operational immediately, and is part of ADM’s effort to expanding its direct-to-farmer and wholesale fertilizer offerings to central Canadian customers.

“We are proud to expand our fertilizer offerings in Canada, allowing us to now serve farmers and wholesalers in Yorkton and the surrounding areas,” said Scott Nagel, president of ADM-Benson Quinn, a division of ADM. “ADM offers customers a level of service, buying options, and market information that very few other fertilizer providers can match. We will be able to offer competitive pricing, including future pricing opportunities for the next application periods. We’re excited to continue our expansion in this market, and look forward to helping meet the needs of farmers and dealers across the region.”

Last summer (GM June 23, 2017), ADM announced that it had signed an exclusive long-term agreement to lease a 20,000 mt warehouse at the new Port Lajord complex in Saskatchewan as part of its expansion in central Canada. ADM introduced its direct-to-farm sales program in the U.S. in the summer of 2016 (GM Sept. 2, 2016).

Nutrien Ltd. on June 6 announced the closing of the placement of 100 percent of its Series B common shares in Sociedad Química y Minera de Chile S.A. (SQM) to Chilean investors, certain other non-U.S. persons, and to qualified institutional buyers within the meaning of Rule 144A under the U.S. Securities Act of 1933, as amended.

The placement was conducted by means of a bookbuild auction on the Santiago Stock Exchange in a process known as subasta de libro de ordenes, in compliance with Chilean law and the rules of the Santiago Stock Exchange. The stock exchange published the results of the order book auction, with 20,166,319 shares sold at a price of approximately $49.34 per share, for gross proceeds to Nutrien of approximately $1.0 billion.

BofA Merrill Lynch and Goldman Sachs & Co. LLC acted as global coordinators and joint bookrunners for the placement. Banchile Corredores de Bolsa S.A. and BTG Pactual Chile S.A. Corredores de Bolsa also acted as joint bookrunners, with Banchile Corredores de Bolsa S.A. serving as the structuring agent on execution of the placement.

Bayer AG announced on June 4 that it expects to complete its acquisition of St. Louis-based Monsanto already on June, 7, following the receipt of all required approvals from regulatory authorities. The latest conditional approval came from the U.S. Department of Justice (DOJ) on May 29 (GM June 1, p. 1).

“The acquisition of Monsanto is a strategic milestone in strengthening our portfolio of leading businesses in health and nutrition,” said Werner Baumann, chairman of the board of management of Bayer. “We will double the size of our agriculture business and create a leading innovation engine in agriculture, positioning us to better serve our customers and unlock the long-term growth potential in the sector.”

Bayer said its May 2016 proposal to acquire Monsanto for $128 per share equates to a current total cost of approximately $63 billion, considering Monsanto’s outstanding debt as of Feb. 28, 2018. Bayer will remain the company name with Monsanto’s name dropped at the time of closing, the company announced. Bayer said all acquired products in the deal will retain their brand names but will become part of the Bayer portfolio.

To gain regulatory approvals, Bayer has agreed to sell a range of assets to German competitor BASF SE in a divestiture package valued at $9 billion, the largest ever in a U.S. merger-enforcement case, the DOJ said. The integration of Monsanto into Bayer is scheduled to start once the BASF sale has been completed, which is expected in approximately two months.

Canadian Pacific Railway Ltd. announced on May 30 that it has reached a tentative deal with the Teamsters Canada Rail Conference (TCRC), the union representing more than 3,000 striking conductors and locomotive engineers. TCRC workers, who represent about a quarter of CP’s work force, walked off the job at 10 p.m. eastern time on May 29, but were preparing to return to work by 6 a.m. on May 31.

CP announced that it had struck a four-year tentative agreement with CP conductors and locomotive engineers, and a five-year agreement with Kootenay Valley Railway conductors and engineers. The railroad on May 29 reached a three-year deal with the International Brotherhood of Electrical Workers (IBEW), another union that was threatening a walkout.

Details of the agreements are being withheld pending ratification by union members, which will take place over the coming months. Long hours, worker fatigue, and cuts that CP allegedly made to increase profitability were reportedly on the list of union grievances as they renegotiated contracts with the railroad.

The short duration of the strike was good news for industries that were bracing for additional shipping disruptions after months of poor rail service. Fertilizer Canada on May 30 issued a statement urging the Canadian government to take decisive action to end the strike if negotiations between the union and CP remained at a stalemate.

“As the Canadian fertilizer industry exports to more than 75 countries, our members rely on an efficient transportation system in order to remain globally competitive,” said Garth Whyte, president and CEO of Fertilizer Canada. “We strongly urge the government to take whatever action is necessary to ensure minimal damage is done to the Canadian economy and especially Canadian trade industries.”

Canadian Pacific Railway Ltd. (CP) was starting to scale back service on May 29 after union members voted on May 25 to reject the railroad’s latest three-year contract offer. The Teamsters Canada Rail Conference and the International Brotherhood of Electrical Workers served the railway with a 72-hour strike notice on May 26, saying they planned to walk off the line as early as 10 p.m. EDT on May 29.

Approximately 3,000 conductors and locomotive engineers voted 98.1 percent to reject CP’s final offer on Friday, while about 360 signals and communications employees voted 97.2 percent to authorize strike action, according to a union statement. Long hours, worker fatigue, and cuts that CP allegedly made to increase profitability are reportedly on the list of union grievances.

CP said it will continue to meet with union members in the hope of reaching an agreement, but noted on May 29 that is has started contingency plans to ensure a smooth and safe wind down of operations. An earlier strike was averted in April (GM April 28, p. 1) after the unions agreed to a recommendation from federal mediators to vote on a new contract offer from CP.

Employment and Labor Minister Patty Hajdu met with both sides over the weekend as federal mediators assisted negotiations. “I urge all parties to continue their hard work to reach a fair deal that avoids any disruption in service,” she said on May 28.

The Mosaic Co. on May 7 reported first-quarter net earnings of $42 million on sales of $1.9 billion, compared with the year-ago net loss of $900,000 on sales of $1.58 billion. Mosaic attributed the net sales increase primarily to its acquisition of Vale Fertilizantes, which closed on Jan. 8 (GM Jan. 12, p. 1). Operating earnings for the quarter were $81 million, up from $30 million a year ago, driven by higher gross margins in all three operating segments

First-quarter earnings per share (EPS) was $0.11, which included a negative impact of $0.09 per share from notable items primarily related to non-cash currency translation charges and costs related to the Vale Fertilizantes acquisition, partially offset by discrete tax items. Adjusted EPS for the quarter of $0.20 was negatively impacted by the late spring and other weather issues. Mosaic also cited “underperformance of Canadian rail providers,” which the company said negatively impacted phosphate and potash sales volumes and unit costs, and was the primary driver of an approximately $290 million increase in working capital.

Net sales in the Phosphates segment were $866 million for the quarter, up from $839 million last year, with higher average sales prices partially offset by lower sales volumes due to the delayed spring and logistical challenges. Gross margin for the segment was $97 million and included a negative $15 million notable item due to refinement of the company’s weighted average inventory costing, compared with $57 million in last year’s first quarter. Mosaic said the gross margin improvement was driven by higher average sales prices and operational improvements, partially offset by higher ammonia and sulfur costs.

The first-quarter average finished product selling price for the Phosphates segment was $431/mt, compared with $369/mt last year, while total finished product sales volumes were 1.9 million mt, down from 2.3 million mt last year. Mosaic attributed the sales volume decline to the idling of its Plant City, Fla., concentrates facility in December and delayed planting in North America.

Net sales in the Potash segment totaled $404 million for the quarter, down from $414 million last year. While the segment posted higher average sales prices, which helped push gross margins to $102 million from the year-ago $69 million, Mosaic said this was more than offset by reduced sales volumes due to a change in the Canpotex revenue recognition policy and logistical challenges during the quarter. The gross margin total included a negative $5 million notable item due to weighted average inventory costing.

The first-quarter average selling price for the Potash segment was $239/mt, up from $210/mt last year, while total sales volumes for the quarter fell to 1.7 million mt from last year’s 2.0 million mt due to the change in Canpotex’s revenue recognition policy. MOP cash costs, including brine management costs, were $86/mt for the quarter, flat with last year despite a negative impact from logistics-related product containment issues during the quarter.

The Mosaic Fertilizantes segment posted net sales of $665 million for the quarter, up from $427 million last year. Gross margin was $59 million, compared with $18 million in last year’s first quarter. The first-quarter average finished product selling price for the segment was $420/mt, compared with $375/mt a last year, while total finished product sales volumes came in at 1.6 million mt for the quarter, up from 1.1 million mt last year.

For calendar 2018, Mosaic said it now expects $1.20-$1.60 in adjusted earnings per share, with full-year finished product sales volumes coming in at 8.2-9.0 million mt for both potash and phosphates, and 9.2-10 million mt for Mosaic Fertilizantes.