All posts by mickeybarb@charter.net

New Dangote Urea Plant Inaugurated

News, News Briefs, Nigeria, Urea

Nigeria’s President Muhammadu Buhari was on hand at a ceremony in Lagos on March 22 to inaugurate the new 3 million mt/y Dangote urea plant, according to a Bloomberg report.

“This fertilizer plant is expected to further advance our administration’s drive toward achieving self-sufficiency in food production in the country,” he said. “The nation also stands to gain extensively in earnings of foreign-exchange from the excess production and exports from the plant.”

The $2.5 billion plant is owned by billionaire businessman Aliko Dangote, believed to be Africa’s richest person, who is investing $19 billion in projects on the continent, including the fertilizer plant and a 650,000 barrel-per-day oil refinery outside Lagos. The refinery, which is expected to be completed in September, will supply domestic consumers and markets elsewhere in sub-Saharan Africa.

Progressive Ag Approves Merger with MKC

Featured, News, Southern Plains

Members of Progressive Ag Cooperative, a full-service co-op based in Wellington, Kan., have voted in favor of a merger with MKC, according to a March 11 announcement from both companies. The merger will become effective on May 16, 2022.

“Together we identified benefits we can gain by combining the two organizations, and we look forward to working together for the future of our cooperatives, the members, and our employees,” said Allan Wegner, MKC Board Chairman.

The merger was approved with an 85 percent majority at a special vote meeting on March 10 after a merger agreement was approved by the boards of both co-ops on Feb. 11. Progressive Ag said it conducted due diligence with several other potential partners, but MKC was chosen because of its focus on customer service, facility improvement, branding, innovation, and employee and customer education.

“The approved vote shows our members see the same vision the board did in partnering with MKC,” said Derek Totten, Progressive Ag Board Chairman. “We look forward to improved efficiencies in operations, and the opportunity to expand our technologies and other services to producers’ operations in our footprint.”

Progressive Ag offers grain, fertilizer, seed, fuels and lubricants, and agronomy services from six full-time Kansas locations at Wellington, Danville, Argonia, Bluff City, Mayfield, and New Haven. In addition, the company operates six seasonal grain locations and one seasonal fertilizer and grain facility in Newport, Kan.

Progressive Ag’s agronomy fertilizer line includes anhydrous ammonia, UAN-28, urea, ammonium thiosulfate, DAP, MAP, MESZ, 10-34-0, potash, and 08-20-05-05S-0.5Z Triple Nickel. The company also offers custom application for both dry and liquid fertilizers, grid and tissue sampling, and micronutrient sales and application.

Headquartered in Moundridge, Kan., MKC has nearly 10,000 members and offers grain, agronomy, energy, feed, risk management, and precision ag products and services. With the addition of Progressive Ag, MKC will now consist of 71 Kansas locations with nearly 600 employees. The company was founded in 1965.

Bipartisan Group of Congressmen asks ITC to Remove Fertilizer Duties from Morocco, Trinidad

Caribbean, Featured, Morocco, News, Phosphate, UAN

A bipartisan group of 86 members of Congress sent a letter dated March 17 to Jason Kearns, the Chair of the U.S. International Trade Commission, asking that ITC remove phosphate tariffs from Morocco and suspend the current process and preliminary duties on UAN from Trinidad and Tobago.

The Congressmen said that the conditions surrounding on-farm expenses in the U.S. have dramatically changed since ITC initiated these investigations.

The Congressmen noted that USDA recently forecast that farm production expenses will increase by 6.6 percent from 2021, with several factors leading to increased expenses, including China’s curtailed fertilizer exports, a congested supply chain, increased demand, severe weather, COVID-19, and general inflationary pressures. They said farmers are seeing fertilizer prices four to five times higher than this time last year.

“Currently, only about 35 percent of the world’s traded supply of phosphate fertilizer is not subject to duties for import into the U.S,” said the group. “This has unnecessarily restricted supply and added costs. Historically, phosphate fertilizer accounts for 15 percent costs for producers. Since the U.S. Department of Commerce’s decision to impose duties on phosphate fertilizer imports from Morocco, phosphate fertilizer prices have increased 93 percent.”

The group said because there is a degree of substitution among nitrogen fertilizer, the impact of the tariffs on UAN is felt across all nitrogen products. It cited a recent predictive modeling study by Kansas State University’s Department of Agricultural Economics as indicating that ammonia prices should be around $1,000 per ton, with the actual price exceeding $1,500 per ton. It said that at the end of February, all fertilizer prices were near record high levels.

“Eliminating these duties on fertilizer imports provides the most immediate opportunity for a near term, partial remedy to the high costs of fertilizer facing U.S. farmers before the end of the 2022 planting season,” said the Congressmen. “Currently, in a time of tight global supply and demand for corn, soybeans, wheat, and other commodities, planting decisions are increasingly being made not on market fundamentals, but rather on the cost of production driven by the price and supply of fertilizer.”

“Removing duties levied on Moroccan phosphates would have the immediate impact of increased competition in the U.S. market and alleviate some supply concerns,” said Alexis Maxwell, Green Markets Director of Research.

As previously reported, the Emergency Relief from Duties Act has been filed in both the House and the Senate. It would create a pathway to create emergency waivers for duties placed on fertilizers by the ITC (GM March 18, p. 1). Another group of some 19 Republican members of Congress has sent a letter to President Biden urging him to take immediate action to lower the cost of fertilizer.

Fertoz Aided by Carbon Contracts, Sustainability, Move to Rail; Utah Site under Consideration

Canada, News, News Briefs, Phosphate Rock, Specialty

Sharply rising fuel, natural gas, and freight costs, plus supply chain issues, have been formidable challenges confronting Fertoz Ltd., a relatively small certified organic fertilizer manufacturer and supplier with mining operations primarily in British Columbia and corporate offices in Denver, Melbourne, and Vancouver, B.C.

Fertoz CEO Pat Avery told Green Markets that huge changes in global agricultural production over the past 2-3 years have forced Fertoz to respond with flexibility and resourcefulness. “The price of commercial fertilizer has doubled compared to a few years ago,” Avery said. “The supply chain has slowly been getting worse, certainly this last year. Truck freight is twice as much as last year.”

The recent Canadian trucking convoy protest complicated Fertoz’ fertilizer distribution when the port of entry between Sweet Grass, Mont., and Coutts, Alta., was blocked for several days, cutting the company’s shipping volume in half. “I never expected that in my lifetime,” Avery said.

Fertoz operates phosphate rock crushing and screening operations at Butte, Mont., Sugar City, Idaho, British Columbia, Alberta, and Mexico. A potential site is under consideration in Central Utah for crushing/screening and mining. “We decided to be organic and low carbon. We don’t use any chemically concentrated ammonia or urea,” he said, adding that keeps its costs down.

Among its mines is one in Monterrey, Mexico, where very high-quality phosphate is crushed and shipped north. It also mines at Wapiti and Fernie, B.C., and Deer Lodge, Mont.

Some 90 percent of Fertoz fertilizer shipments have been by truck, but with the trucking industry estimating it needs 50,000 more drivers and diesel costs rising, Fertoz has been ramping up its rail deliveries the past six months. Rail shipping rates are significantly lower than truck freight rates, he noted.

Fertoz has teamed with Trimble Inc., an industrial technology company in Calgary, for the past two years to enhance buying and trading carbon credits to offset emissions as part of its fertilizer programs. It also will play a large role in monitoring, reporting, and verifying protocols at the farm level, using Trimble technology.

“We’re working pretty hard on this. In 2022, we will have carbon contracts in place with our large dealers and a number of large growers,” Avery said. “We will also be conducting sustainable ag programs with major global and manufacturing companies that need significant offsets.”

Fertoz also is conducting field trials with several large food companies, such as General Mills, Whole Foods, Nestle, and Kraft, to gauge different levels of fertilizer applications.

Fertoz distributors include Parrish & Heimbecker, Phosul LLC, Federated Co-Operatives Ltd., GrowWest, Seven Springs, Providence Grain, Human Growth Solutions Inc., Western Alfalfa Milling Co. Ltd., Blair’s Fertilizer, Pacific Recycled Gypsum, and American Phosphate LLC.

Nutrien Ag Expands in Western Australia

Australia, News, News Briefs

Nutrien Ag Solutions said on March 21 that it has reached an agreement with Emfert, Burgess, Western Australia (WA), to become part of Nutrien Ag. Founded in 2005, Emfert is a single fertilizer up-country depot located in Burgess, between York and Northam in Western Australia’s Central Wheatbelt.

Nutrien Ag Solutions West Region Manager Andrew Duperouzel said expanding their fertilizer investment in WA is critical, especially at a time when supply and demand is front of mind for farmers. “Our Bulk N tanks in Kwinana underpin our efforts to deliver WA farmers reliable access to fertilizer, and this investment in Burgess will further strengthen the resilience of the local supply chain,” he said.

The acquisition will add an additional 6,000 mt of bulk storage capacity for Nutrien Ag, taking its total granular fertilizer storage capacity in the region to more than 200,000 mt. Duperouzel said this investment will ensure growers across the west have access to the right products and inputs at the right locations.

“Nutrien Ag Solutions currently has fertilizer operations at five depots across the west in Geraldton, Kwinana, Albany, Esperance, and Bunbury,” he added. “Currently, many growers are transporting these inputs from our facility in Kwinana, so the addition of this depot in Burgess will improve accessibility and create cost efficiencies for growers.”

Emfert owners Luke and Justin Emerson said this is the start of an exciting new chapter for the business. “Our valued customers remain our priority, and they will continue to receive the same level of service and support with Nutrien Ag Solutions. This integration will see our depot join a global network of agri-related products and services – that’s really exciting,” said Luke Emerson.

Nutrien Ag has some 4,000 employees across Australia, and with more than 400 retail branches it is the largest provider of agricultural services and inputs to farmers in country.

Canadian Pacific Reaches Deal With Union; Operations Resume after Work Stoppage

Canada, Featured, News

Canadian Pacific (CP) Railway Ltd. and the Teamsters Canada Rail Conference (TCRC) on March 22 confirmed that they had agreed to binding arbitration, ending a two-day work stoppage and allowing CP to resume normal operations.

“CP is pleased to have reached agreement with the TCRC negotiating committee to enter into binding arbitration and end this work stoppage,” said CP President and CEO Keith Creel. “This agreement enables us to return to work effective noon Tuesday local time to resume our essential services for our customers and the North American supply chain.”

TCRC represents more than 3,000 union members who work as engineers, conductors, and train and yard employees for CP, 96.6 percent of whom voted in favor of a strike action in early March over contract issues related to wages, benefits, and pensions (GM March 4, p. 1).

The work stoppage at CP commenced early on March 20 following CP’s announcement on March 16 that it had issued a 72-hour lockout notice to TCRC employees (GM March 18, p. 1). By committing to binding arbitration, both parties have now agreed to accept the decision of an arbitrator with the Canadian Federal Conciliation and Mediation Services to resolve the dispute.

“The decision to agree to final and binding arbitration is not taken lightly,” said Dave Fulton, TCRC spokesperson, on March 22. “While arbitration is not the preferred method, we were able to negotiate terms and conditions that were in the best interest of our members.”

Both sides blamed the other for the work stoppage, with TCRC charging that CP had threatened to accelerate the lockout deadline and CP claiming that TCRC withdrew its services before the deadline for a strike or lockout could legally take place. TCRC on March 22 said wages and pensions remain stumbling blocks in the negotiations. The union said it would make no further comments to the media until the arbitration process is complete.

Fertilizer Canada on March 22 issued a statement saying it was pleased that the work stoppage had ended, but pressed for a “permanent solution” to the problems afflicting Canada’s supply chain, including frequent labor disputes. The trade group noted that the fertilizer industry since 2019 has dealt with strikes at Canadian National (CN) Railway Co. and the Port of Montreal, in addition to the current CP dispute.

“Our member companies operate in a global marketplace and need a transportation system that is not under threat of disruption every two years,” the trade group said. “While Fertilizer Canada respects the collective bargaining process, we are disappointed the outcome of CP Rail’s negotiation resulted in a work stoppage. The impacts of the two-day stoppage will be felt for weeks to come.”

That sentiment was echoed by other fertilizer industry participants during the week. Several Canadian sources interviewed by Green Markets conveyed a strong sense of relief that the CP strike ended so quickly, but expressed ongoing concerns about delivery delays that may stretch to 3-4 weeks on rail shipments in Western Canada as a result of the stoppage.

Karen Proud, President and CEO of Fertilizer Canada, said a work stoppage has “crippling effects on the economy and agriculture sector,” especially during the spring planting season, when 75 percent of all fertilizer produced and used in Canada moves by rail. She noted as well that there are several other collective agreements expiring in 2022, including one at CN.

“Canada cannot afford for these agreements to expire and another work stoppage to occur,” she said, adding that the fertilizer supply chain challenges have only been compounded by the war in Ukraine. “It is now vital the federal government develop a long-term approach to fixing problems within the supply chain so Canada can continue to be a reliable trading partner.”

While some Canadian lawmakers have urged the federal government to classify railworkers as essential so future labor-related work stoppages are avoided (GM March 18, p. 33), Labor Minister Seamus O’Regan this week warned that doing so would take away the rights of workers to bargain, The Canadian Press reported.

Tessenderlo Agro Results Up for FY21, 4Q

Earnings, Europe, News

Tessenderlo Group, Brussels, reported full-year Agro adjusted EBITDA of €147.4 million on revenues of €749.3 million, versus 2020’s €125.6 million and €582.9 million, respectively. The company said adjusted EBITDA, when excluding the foreign exchange effect, was up 21.1 percent.

Agro 2021 revenue was up on higher volumes and sales prices. The company said it was able to raise prices in the second half to compensate for higher raw material and other costs. Revenues were also boosted by Tessenderlo Kerley International’s (TKI) 2020 deal to market sulfate of potash produced by Sweden’s Kemira Oyj.

The company said 2021 adjusted EBITDA of both TKI and Crop Vitality increased due to favorable markets, while NovaSource remained stable.

Second-half Agro adjusted EBITDA was €72.3 million on revenues of €375.8 million, versus the year-ago €41.1 million and €220.7 million, respectively. The company said adjusted EBITDA, when excluding the foreign exchange effect, was up 71.4 percent.

Company-wide full-year adjusted EBITDA was €354.2 million, up from 2020’s €314.6 million. Excluding the effect of foreign exchange, it was up 14.7 percent. Revenue was €2.08 billion, up from €1.74 billion.

Second-half adjusted EBITDA was €169.5 million, up from the year-ago €132.6 million. Excluding the effect of foreign exchange, it was up 25.5 percent. Revenue was €1.06 billion, up from the year-ago €802.3 million.

While noting a high level of uncertainty in 2022 due to the current conflict in Eastern Europe, however, assuming normal operations, Tessenderlo expects that 2022 adjusted EBITDA will be in line with that of 2021, taking into account the expected positive foreign exchange effect in 2022 following the strengthening of the U.S. dollar.

Coffee Farmers Face “Mega Emergency” as Fertilizer Costs Soar

Brazil, Featured, Latin America, News

Coffee farmers are facing a “mega emergency” due to high fertilizer prices, according to a recent report by Bloomberg that touched base with major coffee producing countries, with yields at risk as growers consider nutrient-saving measures.

In Nicaragua, coffee farmers are slashing fertilizer purchases just to make ends meet. In Guatemala, growers are diluting nutrients to stretch scarce supplies. And in Costa Rica, producers are betting that their soil holds enough lingering nutrients to carry them through the next planting season.

Small-scale farmers in some of the world’s richest coffee-producing regions are struggling to find alternatives to counter soaring fertilizer costs that threaten their livelihoods, even considering desperate measures that could ultimately undermine a much-needed global rebound in supplies. Some are considering organic waste as a cheap substitute to nitrogen, phosphate, and potash fertilizers, even though such a move could significantly reduce yields.

With coffee prices lagging the costs of key agricultural inputs, smaller coffee producers have become particularly vulnerable.

“The situation represents a mega emergency for our members,” said Fatima Ismael, General Manager of the Nicaraguan coffee cooperative Soppexcca in Jinotega.

The co-op has 650 small growers. Members typically buy about 800 tons of fertilizer each year, which helps them grow enough coffee beans to produce nearly 17,000 bags. A bag equals 60 kilograms (132 pounds). Soppexcca now expects its nutrient purchases to be cut in half.

“This is a big setback for our strategies,” Ismael said. “Producers are very anxious, there’s a lot of uncertainty.”

Guatemalan growers are considering tapping organic compost materials – including chicken manure, household waste, and coffee-cherry pulp – to cut back on fertilizers, according to Juan Luis Barrios, a grower and President of the country’s National Coffee Association. Others are considering the use of faster-acting water soluble nutrients, which may have smaller economic benefits and outcomes that vary from grower to grower, he said.

Costa Rica’s coffee industry is scrutinizing soil content in the main producing regions in hopes of reducing the need to apply nutrients on the ground, according to Xinia Chaves, Executive Director of the Costa Rican Coffee Institute. Even so, insufficient inputs will reduce some growers’ yields and their competitiveness while raising the odds for plant disease that thrives in tropical climates, she said.

Soaring costs are inflicting “a mental and economic blow to everybody,” said Rodrigo Vargas, President of Doka Estate in Costa Rica. His company needs 1,400 tons of fertilizer to produce about 40,000 bags of coffee each year. He mixes seven components together for his fertilizer, which he applies four times a year. The price for his formula has doubled since last year, so he is now considering a less complicated mix, even though he knows it could hurt yields.

While global coffee prices have increased 86 percent in the past two years, adverse weather and higher shipping costs have kept margins for many smaller farmers under pressure. Some international traders who normally ship in containers have turned to bulk vessels, with the boxes hard to find.

The coffee market will start to panic by the third quarter, according to Christian Wolthers, who runs a Florida-based importer and has representatives across Latin America. Brazil, the top coffee grower and biggest importer of crop nutrients, only has enough fertilizer supply for three to six months, he said.

Global coffee production will fall 2.1 percent to 167.2 million bags for the current marketing year, pulled down by a 7.1 percent decline in arabica beans, according to the latest outlook from the International Coffee Organization.

Tessenderlo Eyes Alternative Potash Supply Due to Sanctions Against Russia, Belarus

Belarus, Europe, News, News Briefs, Potash Muriate, Russia, Specialty, Sulfate of Potash

The Tessenderlo Group, Brussels, told analysts in its March 24 earnings call that it is looking for alternative supplies of potash to use in making its sulfate of potash (SOP) due to the sanctions on Russia and Belarus. While the company would not give details on how much potash it requires, Chairman and CFO Stefan Haspeslagh said, “I can tell you we are quite dependent on these markets.”

The company said it sources potash from Russia, Belarus, and other countries for the SOP produced at its Tessenderlo Kerley Ham plant in Belgium. It said the group is in the process of reviewing its sourcing mix, and it is therefore currently not possible to determine what the effect on the production would be – if any – although no significant impact is expected in first-half 2022. At present, it said it is also difficult to estimate the impact on the other activities of the group.

Tessenderlo’s SOP capacity is believed to be approximately 600,000 mt/y, according to Green Markets.

Haspeslagh told analysts the company currently has a crisis team working to organize the sourcing and to see how the company can evolve a solution. “At present, there is not an immediate risk of having to close our factories,” he said. “So we are working on potential solutions on the short, medium and long term.”

He said it is quite difficult to see what the real impact will be, because the company has to look for alternative supply in the market, “whereby 24 million mt of MOP has been blocked in a total market of 70 million mt of MOP. So it’s quite a stressed situation right now in the MOP market, which is the raw material that we convert into SOP.”

Belarusian Potash Co. JSC – Management Brief

Belarus, Management Briefs, Potash

A new head of Belarusian Potash Co. JSC (BPC), the marketing and export arm for Belarusian potash producer Belaruskali, was appointed March 21 by Belarusian President Alexander Lukashenko.

According to the president’s website, Aleksei Skraha has been appointed BPC’s Director General.

Skraha was previously General Director of Belspetsvneshtechnika, a state-run company whose activities, according to its website, involve the development, production, and upgrade of armaments and military equipment.

“Working in the potash market will be akin to selling arms and other special equipment now. Everything has to be quiet, calm, and discreet,” Lukashenko was cited as commenting on the appointment in a report by the state-run BelTA news agency.

It is unclear whether Elena Kudryavets, BPC’s former Director General, remains at the company.