Southern Plains:
The last reference prices for Trio FOB Carlsbad included $480/st for standard, $515/st for granular, $540/st for premium, $555/st for OMRI standard and fine standard, and $590/st for OMRI granular.
Southeast:
The last reported pricing for SOP Magnesia was steady at $700/st FOB in the North Carolina market for brokered spring tons.
Eastern Cornbelt:
Potassium thiosulfate pricing was unchanged at $780/st FOB Terre Haute, Ind., for July offers.
Eastern Cornbelt:
High heat and humidity blanketed the Eastern Cornbelt in mid-July, with forecasts warning of an increased chance of thunderstorms by the weekend.
Temperatures in the 90s were common across Illinois and Indiana during the week, with heat index readings reaching the triple digits in some locations. Most of Ohio registered temperatures in the mid- to upper-80s. Storms were expected to pop up in some locations on July 21-22, with continued heat likely through the weekend.
Illinois continued to lead the region in crop conditions, with 62-70% of the corn and soybeans in the state rated as good or excellent, compared with 45-49% in Indiana and Ohio. Ohio’s oat crop was 4% harvested by July 17, with 70% of the acreage rated as good or excellent.
Western Cornbelt:
As with much of the Midwest and Plains regions, the Western Cornbelt experienced brutal heat during the week, along with high humidity.
Central Iowa was bracing for highs in the low- to mid-90s as the week progressed, although weekend temperatures were expected to drop to the 80s in most locations.
Sweltering temperatures ranging from the mid-90s to the low-triple digits were common across Nebraska on July 20-22. With the high humidity, heat index readings on July 22 were expected to hit 101 degrees in Omaha and 103 in Lincoln and Beatrice.
Similar conditions were reported in Missouri, where heat index values were expected to hit 105-110 in St. Louis by July 23-24. An increased chance of thunderstorms was also in the weekend forecast for parts of Missouri.
Fully 78-81% of Iowa’s corn and soybeans were rated as good or excellent on July 17, compared with 64-66% in Nebraska and 51-55% in Missouri. Other crops experienced declines in quality from last week. Nebraska’s sorghum crop was 50% good or excellent on July 17 compared with 65% the week before, while Missouri’s cotton and rice were reported at 53% and 61% good or excellent, respectively, down 4-5% from last week.
Southern Plains:
The National Weather Service on July 21 warned of “dangerous heat” across much of the Southern Plains, with highs expected to reach 113 degrees in Amarillo, Texas. Oklahoma City, Okla., hit 110 degrees on July 19, surpassing the previous record for that date set in 1936 and coming close to the all-time high of 113 degrees on Aug. 3, 2012.
Extreme-to-exceptional drought also covered much of Texas in mid-July, along with portions of eastern New Mexico and western Kansas. Tinder dry conditions and hot winds fueled a number of destructive wildfires in northern and western Texas at midweek, with 24 new fires reported on July 19 alone.
The weather was taking a toll on crop conditions in the region, causing what one source described as a “massive liquidation” of cattle herds in the region. “We are two weeks away from wheat planting for fall grazing, but it won’t happen if it stays this dry,” he added.
“There is basically zero movement on dry fertilizer at this point, harvest is well underway for corn and milo, and yields are off by 20-30% across the board,” said another source. “Cotton is maturing rapidly, and with continued heat units, we will be harvesting the first cotton in 3-4 weeks, which is way ahead of schedule.”
Good or excellent ratings were assigned to just 46-47% of the corn and soybeans in Kansas at mid-month, while cotton in those two categories slipped to 44% in Kansas and 21-26% in Oklahoma and Texas. Sorghum quality was also dropping, with good or excellent ratings assigned to just 47% of the acreage in Oklahoma, 38-40% in Colorado and Kansas, and 19% in Texas.
Perhaps more telling was the percentage of Texas crops rated as poor or very poor at mid-month, which totaled 42% of the state’s corn, 39% of the cotton, and 48% of the sorghum.
South Central:
Heat warnings and advisories were in place across a large swath of the Lower Mississippi Valley during the week, with highs expected to reach 108 degrees in Shreveport, La. The sweltering temperatures sparked some strong thunderstorms in southern Kentucky and Middle Tennessee at midweek.
Corn conditions showed the effects of emerging drought across western Tennessee and western Kentucky, with just 31-40% of the crop rated as good or excellent in mid-July, compared with 26-28% in the poor or very poor categories. Soybeans rated as good or excellent totaled 81% of the crop in Louisiana, 69% in Arkansas, 58% in Mississippi, 39% in Tennessee, and just 25% in Kentucky.
Cotton conditions showed a similar spread, with good or excellent ratings assigned to 83% of the acreage in Louisiana, 73% in Arkansas, 54% in Mississippi, and 37% in Tennessee. Rice in the good or excellent categories totaled fully 88% of Louisiana’s crop at mid-month, compared with 64% in Arkansas, 58% in Mississippi, and 43% in Texas.
Southeast:
High heat and humidity were reported across much of the Southeast in mid-July, sparking strong thunderstorms in parts of North Carolina, Georgia, and Alabama as the week advanced.
Heavy rain, flooding, and power outages were reported in the Atlanta area on July 21, with some areas picking up more than 2 inches in a matter of hours. Forecasts warned of possible heat advisories across southern Florida by the coming weekend.
Recent rains have helped crops in the region after earlier concerns about drought. While just 32% of North Carolina’s corn registered as good or excellent at mid-month, 45% of the state’s soybeans were in those two categories. Cotton rated as good or excellent totaled 58% of the acreage in North Carolina, 64% in Alabama and Georgia, 74% in South Carolina, and 84% in Virginia.
Peanuts were in even better condition, with good or excellent ratings assigned to 68% of the crop in Georgia, 70% in North Carolina, 76% in Florida, 79% in South Carolina, 87% in Alabama, and fully 91% in Virginia.
Sources reported some late topdress applications on cotton in the region, and pasture work was picking up after the recent rains.
U.S. Gulf:
Brazos Lock travel was scheduled to remain unavailable during daylight hours on Monday through Friday, from 7:30 a.m. to 5:00 p.m., until July 29, one day earlier than the previously reported on June 30. Delays were observed up to five hours through the week.
Dredging at Port Allen Lock reportedly concluded during the week, although lingering delays remained. Waits were noted up to 12.5 hours on July 18, falling from 24 hours reported over the weekend. Additional daylight-hour closures were expected at the site on July 20-30 due to planned equipment repairs.
A dredging operation currently running on a 24-hour schedule through the first half of August was expected to trigger intermittent delays at Algiers Lock, Industrial Lock, and Harvey Lock.
Daytime traffic through the bridge at Mile 231 of the West Canal continued to see interruptions daily from 5:00 a.m. to 9:00 a.m., and again from 3:00 p.m. to 7:00 p.m.
Planned work at Calcasieu Bridge, located at the West Canal’s Mile 239, was anticipated to impact daytime travel on July 18-29, blocking passages from 7:00 a.m. to 12:00 p.m., and again from 1:00 p.m. to 5:30 p.m.
The resumption of guidewall replacement work at Bayou Sorrel Lock was pushed back to early August from the previously scheduled July 11. Work will inhibit Monday-through-Friday travel between 6:30 a.m. and 5:00 p.m. daily once underway, tentatively scheduled to run through February 2023. Wait times at the site topped out around 5.5 hours for the week.
Bayou Sorrel Bridge repairs were expected to limit Monday-Thursday travel between 7:00 a.m. and 11:00 a.m., and 1:00 p.m. to 5:00 p.m., through late August.
Draft limits continued to be observed at Miles 113-117 of the Atchafalaya River due to “extensive” shoaling in the area, particularly at Miles 115.5-117, according to a Coast Guard safety bulletin. Drafts were capped at 10 feet through the Stouts Pass area, while towing lengths and widths were set at 600 feet and 70 feet, respectively. Tows longer than 400 feet were encouraged to travel with an assist boat.
Navigation was completely unavailable through Little Island Pass, Middle Island Pass, and Riverside Pass due to the presence of potentially hazardous underwater pipes. Tows could bypass the waterway’s myriad restrictions by detouring through the Port Allen Route.
Length and width restrictions continued to be reported at Algiers Lock, limiting unassisted tows to four standard barges or two 30,000 mt tankers per turn. Larger lockages were available when traveling with an assist tug. Most wait times topped out around 10 hours during the week, although a handful of delays were seen up to 18-26 hours.
Belle Chasse Bridge construction efforts, scheduled to run through the end of 2022, triggered delay expectations up to 12 hours. The structure is located at the West Canal’s Mile 3.
Colorado Lock waits peaked at seven hours on July 18.
Mississippi River:
Excessive heat continued to plague the lower Mississippi River during the week, impacting loading and unloading times, as well as other outdoor activities related to commercial river operations.
An excessive heat warning issued by the National Weather Service was in place for the Vicksburg, Miss., area on July 20, while a heat advisory warned of heat index values up to 110 degrees in the Baton Rouge, La., area on July 20.
Persistent low water levels were reported again for the week from St. Louis to the Gulf, restricting towing capacity. Barge and vessel drafts were capped at 12.5 feet on southbound movements, while tows moving upriver were limited to 10.5 feet of draft. In addition, maximum barge counts were reduced by 10-15%.
Channel maintenance reported at Miles 336-337 was noted blocking southbound travel daily between 7:00 a.m. and 5:00 p.m. The operation was scheduled to end on Aug. 7.
Power line work in progress at Mile 107 was heard limiting daytime travel through the area. Single-direction movements were available from 4:00 a.m. to 7:00 a.m. at the site, and again between 1:00 p.m. and 4:00 p.m. Travel was completely unavailable between 7:00 a.m. and 1:00 p.m. The operation was tentatively expected to continue through the end of the month.
The lower river’s Old River Lock, located at Mile 305, is expected to see daily shutdowns from July 25 through Aug. 29, limiting travel between 6:00 a.m. and 7:30 p.m. Miter gate installation scheduled for Aug. 30 through Nov. 13 will block all navigation through the site, complicating access to the Red River. Tows looking to access the Red River were advised to detour through the Atchafalaya River while work is underway.
Lock 21 delays were reported up to six hours. Lock and Dam 24 wait times were noted topping out near the 10-hour mark.
Illinois River:
Repair and maintenance operations running through Sept. 8 at Brandon Road Lock were projected to significantly impact movements through the site. Lockages are limited to overnight hours through Aug. 14, after which the lock will close to all traffic from Aug. 15 through Sept. 4. Overnight-only travel will resume on Sept. 5-8, followed by a return to standard operating hours on Sept. 9. A 70-foot width limit is in effect for the project’s entirety. Corps data showed delays up to 13.5 hours during the week.
Lock operators were noted raising wickets a LaGrange Lock during the week, prompting the resumption of lockages through the site. Wickets remained in the raised position at Peoria Lock, sources said. Delays were noted up to six hours at both locations.
Corps data noted six-hour waits at Dresden Island Lock, while tows passing Marseilles Lock were delayed up to seven hours. Intermittent 5-12 hour passages were observed at Starved Rock Lock.
Ohio River:
The primary chamber at Cannelton Lock is shut for repairs and maintenance through Nov. 11, prompting detours through the secondary chamber. With the bulk of tows requiring at least two passes to clear the lock, wait times were observed up to 27.5 hours through the week.
A Hannibal Lock primary chamber repair and maintenance shutdown has been in progress since July 5, requiring passage through the secondary chamber. Intermittent delays were clocked up to nine hours as a result.
Intermittent 4-5 hour delays were noted at McAlpine Lock during the week.
Waits were reported up to 18 hours at the Tennessee River’s Kentucky Lock. Corps data put Wilson Lock waiting as high as 30 hours. The Pickwick Lock main chamber was reportedly undergoing inspection for a potential structural issue, prompting all vessels to pass through the secondary chamber. Minimal delays were reported.
Machinery repairs underway at the Cheatham Lock miter gate were noted triggering lengthy shutdowns at the site. Access to the lock has followed a repeating 14-day schedule, consisting of a complete 11-day transit shutdown followed by three days of unrestricted navigation. Work at the site is expected to wrap up on Aug. 5.
Arkansas River:
Daytime travel outages at Norrell Lock, underway since June 22, were scheduled to end on July 21. Navigation was reportedly unavailable daily between 7:00 a.m. to 7:00 p.m. during the outage. Overnight-only travel is scheduled to resume on Aug. 1-10; Aug. 21-Sept. 21; Oct. 20-Nov. 18; Nov. 29-Dec. 23; and Jan. 3-31, 2023. Travel will be completely unavailable between Sept. 30 and Oct. 9, sources indicated.
Transit will be unavailable through Joe Hardin Lock between 7:00 a.m. and 7:00 p.m. daily on Sept. 12-19, and again on Sept. 28-29. The lock will close completely to navigation from Sept. 20 through Oct. 9.
The 96th annual Southwestern Fertilizer Conference in Nashville, Tenn., on July 10-14 attracted 2,170 industry attendees from approximately 833 companies and 17 countries.
The conference inducted three individuals into its Hall of Fame: Grady Goodpasture, former president of Goodpasture Inc.; Larry Murphy, former president of the Fluid Fertilizer Foundation; and L.W. “Bill” Lohry, founder of Nutra-Flo Company and founding member of the Fluid Fertilizer Foundation and the Fluid Journal.
The conference also noted key industry representatives who have passed away in recent years, including Bob Shaw of Knox Fertilizer; Chuck Locker of Ben-Trei; Mohamed Belhoussain of OCP; Charles “Mac” Macaluso of Darling Ingredients; Jerry Southwell of Yara; Cody Massey of Brandt; Jerry Christian of CF Industries; Jimmy Pursell of Pursell Farms; industry consultant Mike Orr; and Ray Hoyum of Advantage International.
Hocking International, Houston, on July 8 announced the divestiture of its Industrial Cleaning segment to State Contract Manufacturing, a division of State Industrial Products Inc., Cleveland, Ohio. All products and customers have been transitioned to State.
Industrial products, consisting primarily of cleaning chemicals and automotive lubricants, were the primary business of Hocking International at its inception 46 years ago. However, Hocking said that it is now solely focused on product formulation, manufacturing, and fulfillment services for agriculture, golf, and landscape customers, providing innovative solutions for some of the largest retailers and distributors in the industry.
“Hocking International has grown and evolved over the years into one of the leading private-label manufacturers of liquid fertility products for the Agriculture and T&O industries,” said Hocking CEO Greg Crawford. “The divestiture of our Industrial Cleaning segment will allow us to further focus on our core businesses and on providing world-class products and service to our customers.”
Twelve rail unions are threatening a possible strike against the country’s Class 1 railroads on July 18 unless a Presidential Emergency Board (PEB) is appointed by President Biden to help resolve the labor dispute. An update on the dispute was provided at the Southwestern Fertilizer Conference in Nashville, Tenn., on July 12 by Dan Keen, Assistant Vice President, Policy Analysis, for the Association of American Railroads.
Disagreements over wages and health care benefits have prevented the railroads and their unions from negotiating a new contract since January 2020. The National Mediation Board (NMB), an independent federal agency that mediates railroad and other labor agreements, agreed earlier this year to mediate.
The parties failed to meet an agreement under NMB mediation, however, prompting the NMB last month to release the railroads and unions from mediation and begin a 30-day cooling off period, Freight Waves reported. That 30-day period ends after midnight on July 18.
Keen said Biden is almost certain to appoint a PEB before the cooling off period ends, as has been the practice in prior railroad labor disputes. A PEB would then have another 30 days to conduct hearings and issue a report, during which work stoppages are prohibited, Keen said.
According to the National Carriers’ Conference Committee (NCCC), which represents the railroads in collective bargaining, any work stoppage is also prohibited for another 30 days following the publication of PEB’s report.
The narrowing timeline before the July 18 deadline, however, has prompted some organizations to press Biden for action. Suzanne Clark, President and CEO of the U.S. Chamber of Commerce, penned a July 6 letter to Biden urging him to appoint a PEB promptly to “prevent any disruption to America’s rail service.” The letter was copied to Secretary of Labor Marty Walsh and Secretary of Transportation Pete Buttigieg.
“The U.S. business community faces enormous challenges today from record inflation, labor shortages, and ongoing supply chain disruptions due to the COVID-19 pandemic,” Clark said in the letter, adding that further disruptions “would be disastrous for U.S. consumers and the economy, and potentially return us to the historic supply chain challenges during the depths of the pandemic.”
Rail labor unions have criticized railroads for implementing “precision scheduled railroading” procedures in recent years in an effort to increase efficiencies, but at the expense of jobs and service. Major rail carriers have cut roughly 45,000 positions in the past six years, according to an April 2022 report from the Surface Transportation Board (STB).
Precision scheduled railroading was also criticized by The Fertilizer Institute (TFI) in testimony submitted to the STB in April concerning rail service issues that have hindered fertilizer deliveries this spring (GM April 29, p. 1).
Greg Regan, President of the AFL-CIO’s Transportation Trades Department, said rail workers are being “ground to dust” after going three years without a raise and being asked to work long hours to meet surging demand. “The reality is railroad executives continue to make record profits off the backs of rail workers after shrinking the total workforce by 30% since 2015,” Regan said, cited by Freight Waves.
Approximately 30 Republican members of Congress are urging the Biden administration to lift import duties on phosphate fertilizer from Morocco and place a moratorium on any new duties on UAN imports from Trinidad and Tobago.
A July 14 letter signed by 31 members of Congress, including senior lawmakers on the House and Senate agriculture committees, said the nation’s farmers are facing high fertilizer prices, tight fertilizer supply, and rising inflation, threatening food security.
“Our country’s farmers and agricultural producers are making decisions on what to plant today based on fertilizer prices rather than typical market fundamentals,” the letter states. “Coupled with inflation at the highest it has been in 41 years and a Consumer Price Index for food up 14.6%, the rising cost of fertilizer will increase food insecurity and geopolitical tensions domestically and abroad.”
The letter follows the final affirmative determinations in June by the U.S. Department of Commerce (DOC) in antidumping (AD) and countervailing duty (CVD) investigations of UAN imports from Russia and Trinidad (GM June 24, p. 1). DOC and the U.S. International Trade Commission (ITC) initiated their investigations in July 2021 in response to petitions filed by CF Industries Holdings Inc. (GM July 2, 2021).
The ITC made an affirmative preliminary determination in August 2021 and is scheduled to make its final determination on July 18, 2022. If the ITC’s final determination is affirmative, then DOC will issue AD/CVD orders on UAN imports from Russia and Trinidad, which will remain in place for at least five years.
The DOC and ITC last year (GM March 12, 2021) issued AD/CVD orders on imports of phosphate fertilizer from Morocco and Russia in response to a complaint filed by The Mosaic Co. on June 26, 2020 (GM June 26, 2020).
While noting that the U.S. is a “major producer” of nitrogen and phosphate fertilizer, the letter from Republican lawmakers said U.S. farmers “still significantly rely on imports” to meet fertilizer demand for crop production.
“While under normal circumstances, action by the Commerce Department and the ITC in the form of duties may be warranted. We do not want foreign governments to distort trade with the U.S.,” the letter states. “However, we certainly are not in normal circumstances. Duties on some of our most reliable trading partners is the last thing we need amid a global food crisis.”
Referring to the fertilizer duties as “inflationary tariffs,” the lawmakers said fertilizer supply and availability in the U.S. is “at a crossroads where farmers are applying lower-than-recommended soil nutrient rates for fear they cannot break even.” The result, the letter states, is that productivity will decline.
“The bottom line is that fertilizer is critical to national security and national defense,” the letter concludes. “Its affordability is also critical to wrangling out-of-control inflation. As such, we strongly encourage you to take immediate action to waive duties on fertilizer imports from Morocco and Trinidad and Tobago.”
Titan Machinery Inc., the Fargo, N.D.-based network of full-service agricultural and construction equipment stores, announced on July 11 that it has entered into definitive purchase agreements to acquire Heartland Ag Systems, Heartland Solutions, and related affiliates, the largest Case IH application equipment distributorship in North America.
The purchase price was reported at approximately $110 million, subject to final working capital and other closing adjustments, with the amount comprised primarily of cash from the company’s balance sheet. The transaction is expected to close in August 2022, subject to customary closing conditions, with all of Heartland’s 340 employees joining Titan. Heartland’s management team is also expected to remain in place throughout and following the integration.
“This transaction is significant for Titan Machinery both in size and strategic fit,” said David Meyer, Titan Machinery’s Chairman and CEO. “Most importantly, this gives Titan Machinery access to the full product line of Case IH application equipment, including self-propelled sprayers and fertilizer applicators, along with incremental sales opportunities to package with tractors, tillage, and construction equipment to the commercial application customer.”
Founded in 1966, Heartland Ag Systems has exclusive distribution agreements across 17 states in the Midwest and Northwest regions, supported by 12 retail stores, six of which are within Titan’s existing footprint. The company also operates a commercial application equipment manufacturing facility at its Hutchinson, Minn., headquarters. In the full year period ended Dec. 31, 2021, Heartland generated revenue of $213.9 million and EBITDA of $15.3 million.
Titan said Heartland is well diversified, with a strong parts and service business that represents approximately 30% of full-year 2021 revenues and generated pre-tax margins of 4.2%, presenting a similar profile to that of Titan’s existing business. The transaction will equate to approximately $274 million in revenue, $0.43 in diluted earnings per share, and $19.5 million in EBITDA, Titan said.
“The increased parts, service, and technical capabilities we bring to the commercial application customers in our highly productive core Agriculture footprint, combined with the long-term business relationships Heartland has developed with the commercial application customers, will be a win/win for Titan Machinery, Heartland, Case IH, and the hundreds of commercial application providers in our core markets,” Meyer said.
“We see immediate revenue synergies to be captured in the first full year of operation, and we expect to generate additional growth and margin expansion as we enhance our combined network,” Meyer added. “We are excited to add Heartland’s experienced leadership team and look forward to a bright future together as we welcome the entire Heartland organization to the Titan Machinery family.”
Nutrien Ltd., Saskatoon, is being assessed up to $84 million for cleanup work and a $1.5 million civil penalty to settle alleged violations of the Resources Conservation and Recovery Act at the former phosphate operations at its Geismar, La., complex. The agreement was announced on July 14 by state and U.S. EPA officials.
Legacy PCS Nitrogen Fertilizer LP manufactured phosphate products in Louisiana for agriculture and industry from the 1960s to 2018, including phosphoric acid and phosphate fertilizer.
The company must treat more than 1 billion pounds of acidic hazardous process wastewater, which will then be sent to a new water treatment plant. The result “will provide a protective solution for decades to come,” said Chuck Carr Brown, Secretary of Louisiana’s Department of Environmental Quality.
“This is a very important outcome, as the facility is located in an area prone to hurricanes, and the financial assurance secured will protect taxpayers from paying future closure and cleanup costs,” said Larry Starfield, Acting Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.
“Safety and environmental protection are key priorities for Nutrien,” said Richard Holder, General Manager of Nutrien’s Geismar Operations. “We are committed to reducing the environmental impacts of our operations, and to developing products and innovative solutions that help growers enhance their productivity and sustainability.
“We have long been working with the U.S. Environmental Protection Agency and Louisiana Department of Environmental Quality to resolve issues relative to legacy phosphate operations at the site in Geismar,” he added. “Those operations were closed in December 2018. These settlements essentially document mitigation efforts that were initiated even before operations ceased.
“These agreements allow us to focus on new projects, like the potential construction at our Geismar site, of the world’s largest clean ammonia plant, and to further reduce our environmental footprint at the site,” he said. “We are proud community members in Louisiana and take our responsibility to care for the environment seriously. As such, we will continue to advance ongoing efforts in an environmentally protective manner. We have worked with state and federal authorities during this process, and these consent decrees and state orders document the resolution of issues arising from that work.”
