All posts by mickeybarb@charter.net

Kore Potash Inks MOU for Kola Project Financing, Raises $11 M to Fund Study

Africa, Australia, News, News Briefs, Potash

Australian junior company Kore Potash plc has signed a non-binding Memorandum of Understanding (MOU) to arrange the financing required to build the Kola potash project in the Sintoukola Basin in the Republic of Congo.

The MOU with Mauritius-based Summit Africa Ltd. outlines a roadmap to optimize, fully finance and construct the project via a mix of debt and royalty financing, Kore Potash said in an April 6 statement.

Summit and its technical partners China’s SEPCO Electric Power Construction Corp. and China Enfi Engineering Corp. which has been subcontracted by SEPCO, will work with Kore Potash to undertake an optimization study to reduce Kola’s capital cost with a target of less than US$1.65 billion.

Kore will contribute US$0.9 million to the optimization study costs, while SEPCO will cover the remaining 50 percent of the estimated costs of the study.

Kore on April 7 announced its intention to raise approximately US$11 million in a proposed fundraise to fund its share of the optimization study, as well as ongoing working capital requirements. The expected split of funds to be raised is approximately US$5.5 million via an unconditional placing; and approximately US$ 5.5 million via a conditional placing and subscriptions.

Under the financing structure proposed under the MOU, Kore would be required to contribute to the capital needed to build the project and would retain 90 percent equity in Kola. The company currently owns 97 percent of Kola where a 2.2 million mt/y mining operation over a 33-year life is being targeted.

Summit is an African strategic advisory, corporate finance, and alternative investment group and in 2016 led and arranged the $50 million financing of the Definitive Feasibility Study for Kola. As part of that financing, both the Oman Investment Authority (then known as the State General Reserve Fund of Oman) and Chile’s SQM each invested $20 million (GM Sept. 1, 2016). As a result, SQM was understood to have acquired an 18.2 percent stake in Kore Potash, while Oman Investment Authority also became an important stakeholder.

Ammonia

Ammonia, Black Sea, Brazil, California, Eastern Cornbelt, Market Watch, Middle East, North Africa, Pacific N.W., Tampa, Turkey, U.S. Exports, U.S. Gulf, U.S. Imports, Western Canada, Western Cornbelt

U.S. Gulf/Tampa:

Tampa ammonia prices for April continue at $545/mt CFR, with NOLA barges last done at $545/st FOB.

Price ideas for Tampa ammonia for May are mixed. While some argue for a rollover after the $100/mt surge in April, the news that the Waggaman plant in Louisiana will continue to be offline until mid-April will continue to crimp supplies. In addition, Nutrien continues to have two plants offline in Trinidad due to mechanical issues.

U.S. Imports:

February ammonia imports were down 13.8 percent, to 194,187 st from the prior-year 225,310 st. July-February volumes totaled 1.60 million st, 11.5 percent below the year-ago 1.81 million st.

U.S. Exports:

February ammonia exports fell 82.0 percent, to 6,589 st from the prior-year 36,664 st. Exports for the July-February period softened 13.5 percent, to 359,709 st from 416,005 st.

Eastern Cornbelt:

With preplant ammonia movement running in high gear, sources said terminal pricing in Illinois and Indiana had firmed to $620-$635/st FOB, depending on location, up from earlier lows of $600-$615/st FOB on a spot basis. The top of the Eastern Cornbelt ammonia range remained at $650/st FOB Mount Vernon, Ind., and Henderson, Ky.

One Illinois contact said preplant ammonia demand was probably 85 percent complete in his trade area after a full week of heavy activity. “Truck availability is probably the biggest issue right now,” he said.

Western Cornbelt:

Sources said preplant ammonia demand was already starting to wind down in the region after a period of heavy movement in early April. Ammonia prices remained at $600-$615/st FOB in the Western Cornbelt, with the low reported at Palmyra, Mo., and out of spot locations in Nebraska. Terminal pricing in Iowa ranged from $605-$615/st FOB.

California:

Calamco reportedly raised its ammonia postings again in California, with new April reference levels firming to $626/st DEL for anhydrous, up from the March 1 reference of $572/st DEL. Aqua ammonia postings also strengthened to $172/st FOB in California on April 1, up from $157/st FOB.

Pacific Northwest:

Ammonia pricing was pegged at a firm $650/st FOB Ritzville and Kennewick, Wash., up some $40-$50/st from last report, with rail-DEL tons reported in the $655-$680/st range in the region. Aqua ammonia was quoted at $170/st FOB in the region in early April.

Western Canada:

Ammonia pricing in Western Canada was reported in a broad range at C$950-$1,050/mt DEL for limited offers in early April, up from C$940-$980/mt DEL at last report.

Black Sea:

Buyers are arguing the ammonia price should not move off the current $450/mt FOB, while sellers are pushing for more.

So far, the main talks taking place are between Trammo and Ostchem over 10,000 mt to ship in the second half of April. Producers have been pushing for $470/mt FOB and up as the global ammonia market continues to surge higher. Sources said rumors began circulating late in the week that the two parties reached an accord at $460/mt FOB. However, no one was able to confirm that level as Green Markets went to press.

Middle East:

Ammonia remains tight in the area and the closure of SABIC-4 through the end of April is not helping the situation.The lack of any excess material beyond what is needed to cover contract tons has left no possible spot business to test the market price.

Northwest Europe:

Limited material from the major suppliers and strong demand from industrial buyers in Europe has pushed up the Northwest Europe price to $520-$530/mt C&F.

An additional boost in pricing came as sources reported sales out of Baltic ports in the upper-$460s/mt FOB. Even as the higher prices are reported, sources said no new contract price for April has yet been settled.

North Africa:

Demand from Morocco is keeping pressure on the ammonia market even as supplies remain tight. Sources said phosphate giant OCP is taking tons from whatever source possible to keep its production running.At the same time, North African producers, such as Algeria, report being sold out for the month of April.

Turkey:

Imports of ammonia during the first two months of the year were down 44 percent, to 134,000 mt from 239,000 mt during the same period last year.

According to Trade Data Monitor, the single largest supplier of ammonia to Turkey so far this year has been Russia with 96,000 mt. The next two suppliers are Ukraine with 19,000 mt, and Algeria with 17,000 mt.

February imports were down 40 percent, to 60,000 mt from 100,000 mt in February 2020. Russia supplied 40,000 mt of the February 2021 purchases.

Brazil:

Ammonia imports for March 2021 were reported at 32,000 mt, all from Trinidad, compared with 22,000 mt in March 2020, according to Trade Data Monitor.

The March figures brought the first-quarter total imports to 136,000 mt, a 62 percent increase over first-quarter 2020 of 84,000 mt. Algeria supplied 15,000 mt during the quarter, with the rest coming from Trinidad.

Urea

Brazil, California, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, Nepal, Pacific N.W., Turkey, U.S. Exports, U.S. Gulf, U.S. Imports, Urea, Western Canada, Western Cornbelt

U.S. Gulf:

The story was the same as last week, with upriver barges and those ready to move garnering a significant premium. Barges ready to move were generally put in the $400-$405/st FOB range, with an unconfirmed report of a barge at NOLA going as high as $410/st FOB.

In the meantime, barges with a little time on them saw a lower price. April was reported to be trading in the $370s/st FOB, first-half May at $362/st FOB, and all-May at $355-$360/st FOB.

U.S. Imports:

February urea imports were noted at 316,780 st, softening 19.1 percent from the year-ago 391,764 st. July-February totals stood at 2.10 million st, down 2.9 percent from the year-ago 2.16 million st.

U.S. Exports:

February exports of urea dropped 63.5 percent, to 20,664 st from the year-ago 56,564 st. Exports totaled 551,428 st for July-February, up 19.0 percent from the year-ago 463,542 st.

Eastern Cornbelt:

Urea pricing was unchanged at $420-$440/st FOB in the Eastern Cornbelt, with the low reported out of spot Illinois River terminals and the high out of inland Ohio locations. The Cincinnati, Ohio, market was pegged at $431-$435/st FOB in early April.

Western Cornbelt:

Urea remained in a broad range at $425-$455/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Sergeant Bluff, Iowa. Other terminal pricing in early April included $430/st FOB Caruthersville, Mo., $430-$440/st FOB St. Paul, Minn., and $435-$445/st FOB Catoosa/Inola, Okla.

California:

Urea pricing in California was quoted at $515-$520/st FOB port terminals for April shipment, with May offers reportedly falling to sub-$500/st FOB levels. No rail-DEL prices were confirmed for urea in early April.

Pacific Northwest:

The urea market remained at $475/st FOB Rivergate, Ore., and $480/st FOB Aurora, Ore., with delivered tons ranging from $490-$510/st in the Pacific Northwest, depending on location.

Western Canada:

The urea market remained at C$650-$690/mt DEL in Western Canada, with the low reported for spotty import offers. Sources also confirmed some C$670/mt DEL offers in Saskatchewan for domestic tons, while FOB warehouse pricing ranged from a high of C$690/mt for prompt shipment to a low of C$620/mt FOB for limited May offers.

India:

So far 12 vessels have been booked to bring in just over 600,000 mt of the 802,000 mt booked by RCF in its March 22 urea tender.The bulk of the material – 509,000 mt – booked so far is from Chinese ports. An additional 96,500 mt is booked on vessels from the Arab Gulf. The remaining 197,000 mt is still to have vessels assigned.

Supplier Quantity (‘mt) Vessel Origin Discharge Port
Koch 50,000 Frosso K China Gangavaram
50,000 Qingdao China Pipavav
Transglobe 50,000 Anna Meta China Karaikal
Amber 65,000 Agia Valentini China Kakinada
Liven 50,000 Adhiraj China Mundra
Ameropa 51,500 Ince Beylerbeyi Oman Kandla
51,500 Federal Illinois China Mundra
51,500 New Spirit China Tuna
Gavilon 45,000 Tomini Ability China Rozy
Swiss Singapore 46,000 Prabhu Gopal China Jaigarh
Samsung 50,000 Melpomeni China Kandla
Samsung 45,000 New Victory UAE Dahej
Orders Not Assigned
Supplier Quantity (‘mt) Discharge Port
Koch 50,000 Krishnapatnam
Transglobe 50,000 Vizag
Dreymoor 52,000 Pipavav
Continental 45,000 Hazira

The two orders bound for Krishnapatnam and Vizag, because they are East Coast ports, are expected to be filled with Chinese material. If that happens, that means just a bit more than 600,000 mt will come from Chinese suppliers. This would fit with previous estimates of 10 panamax vessels in place to handle shipments from China to India.

There are reports that a deal struck by a South Korean trader could provide up to 35,000 mt of product from Indonesia.

Sources said the orders from this tender should be enough to hold over Indian demand into May. Sources said another tender could be called shortly after April 28, the deadline for shipping the last of the RCF tender material. The most likely time to call the tender will be the first week of May to avoid the Labor Day holiday period.

China:

The impact of the limited take by RCF is being felt in the pricing of Chinese urea. Because India is not taking as much product as previously expected, there are more tons available in the market, pushing prices down.

Sources put the current prilled price in the high-$320s/mt FOB, with producers hoping for the low-$330s/mt FOB. Granular urea is pegged in the low-$340s/mt FOB. These prices are as much as $20/mt off the netbacks initially estimated from the awards issued in the RCF tender.

As the urea plants came out of the Lunar New Year and COVID-related shutdowns in February, they cranked up production to about 70 percent of rated levels. Sources said some plants are still operating at that level while others have cut back to 60 percent. The initial production level was based on estimates that about 1 million mt would be taken from Chinese producers for the first Indian tender. When RCF cut back its order from 1.2 million to 802,000 mt, Chinese producers were hit the hardest.

The drop in demand from India coincided with the end of the domestic season. Even though the central government ordered a buildup of urea reserves for the next season, once that fill program ended, the only place for the urea to go was offshore. Sources said the fill program ended in March, leaving a lot of tons for international traders.

The next major round of domestic buying is not expected until June. Sources said the April-May period could see continued softening of urea prices in China.

However, if the next Indian tender is not called until the first week of May, as expected, then the tonnage purchased in that tender will be needed at about the same time as the Chinese domestic market begins a new round of purchases. The resulting competition between the two markets could bounce prices back up., said traders.

Indonesia:

There were reports of a couple of new urea sales that helped set pricing levels in Indonesia.

Sources reported one sale early in the week at $345/mt FOB of granular material. The product reportedly will be mixed with an earlier purchased cargo, which was sold at a higher price. Sources said the combined loads could be offered to cover an award in the RCF/India tender. However, so far, no vessels have been booked from Indonesia to India. The more likely alternative, said one trader, is for the cargoes to go to Australia.

A second sale of about 70,000 mt was reportedly picked up by a South Korean trader, with half of that tonnage expected to cover a sale to Thailand. Sources said the original deal with Thailand was for Saudi product. However, the closer of the SABIC-4 plant caused a shortage of available urea. The Indonesian material is expected to cover that lost product.

The other half of the deal is rumored for either India or Australia. As noted, no vessels have been booked so far to make the Indonesia-India run. Sources reported, however, that some trading houses have feelers out looking for a well-placed and well-priced vessel for that journey.

Nepal:

Three tenders will close beginning on April 21 for a total of 80,000 mt. The first by STC is for 25,000 mt and will close on April 21. The granular urea is to be bagged and delivered to Nepalese warehouses on a CIP basis.

Two more tenders, each called by KSCL, will bring in the remaining 55,000 mt in May. The first tender closes on May 7 for 25,000 mt, and the second for 30,000 mt closes on May 17. All three tenders are for bagged material to be delivered to the Biratnagar, Birgunj, and Bhairahawa warehouses on a CIP basis.

The Nepal tenders are rarely seen as price-setting events. However, the tender results can be seen as price-confirming deals, especially in determining the price of material out of China.

Middle East:

The market is beginning to show some signs of possible weakness. Sources said the limited tons available for export from the Arab Gulf because of limited output suggest firm prices. However, the ever-rising freight rates are putting pressure on producers to absorb some of those costs in their netbacks to conform to deals already in the works.

There are reports of some deals done in the upper-$340s/mt FOB for sales into smaller markets. This range represents about a $10/mt drop from the previous week. The paper market for Arab Gulf granular urea shows an even steeper decline. Prices are put at $336/mt FOB for May, and $330/mt FOB for June.

Egyptian producers are trying to hold onto their premium prices but are facing ever-stronger pushback from buyers. Abu Qir reportedly scrapped its tender that was to close on April 2 for 25,000 mt of prilled urea and 10,000 mt of granular, all to ship in late April.

Sources said the producer scrapped the tender because bids did not meet even their lowered expectations. Sources reported that Abu Qir was hoping for bids in the $370s/mt FOB. However, even that level was about $20/mt too expensive for buyers.

The paper market for May and June prices out of Egypt splits the difference between producers and buyers by putting the price in the $360s/mt FOB. Without any new spot business to report, the price remains at $400/mt FOB.

Turkey:

Toros closed a tender for 20,000 mt of granular and 15,000 mt of prilled urea on April 9 for shipment during the first half of May. The cargoes are to be divided to various unloading ports.

According to Trade Data Monitor, urea imports in January-February 2021 dropped 20 percent from the same period in 2020, to 517,000 mt from 736,000 mt. February imports this year were down nearly a half, to 270,000 mt from 508,000 mt in February 2020.

Brazil:

Traders around the world noted softness in the Brazil landed price. Brazilian sources pegged the market at $370-$390/mt CFR, while international traders took a narrower view and called the market $380-$385/mt CFR in Paranagua.

Sources in Brazil said buyers at the ports and inland are taking a wait and see approach to their buying. Farmers are keeping an eye on weather patterns to see if the rains will cooperate with their planting schedule. Likewise, traders from the ports to the local distribution centers are noting the limited tonnage taken by RCF/India in their latest tender, as well as lower prices in China and reports of softer prices from the Arab Gulf.

The Arab Gulf price is seen as a benchmark for local buyers. Last year, Qatar was the largest provider of urea to Brazil at 1.8 million mt. However, Algeria and Russia were also major suppliers with 1.5 million mt and 1.3 million mt, respectively. Other major non-Arab Gulf suppliers included Iran at 505,000 mt and Nigeria at 431,000 mt. This year, sources are expecting more tons to come from Nigeria once the new Dangote plant comes fully online.

Rondonopolis showed a tightening of the market at the upper end of the range, to $475-$540/mt FOB ex-warehouse. Sorriso remained steady at $480-$530/mt FOB. The barter rate at Rondonopolis for 1 mt of urea remains at 71 bags of corn.

Brazil Urea Prices
Terminal/City US$/mt FOB ex-warehouse
Week ending 4/02 Week Ending 04/09
Rondonopolis 475-555 475-540
Sorriso 480-530 480-533

Imports of urea for March 2021 were up 22 percent, to 707,000 mt from 579,000 mt in March 2020, according to Trade Data Monitor. Qatar was the single largest supplier at 189,000 mt, but the biggest year-over-year increase came from Russia, which supplied 175,000 mt in March 2021, compared with 44,000 mt in March 2020.

First-quarter imports were up 23 percent to 1.97 million mt, compared to the same period in 2020 at 1.6 million mt. Qatar and Russia were the top two suppliers in 2021 at 582,000 mt and 528,000 mt, respectively.

UAN

California, Eastern Cornbelt, Market Watch, Pacific N.W., U.S. Exports, U.S. Gulf, U.S. Imports, UAN, Western Canada, Western Cornbelt

U.S. Gulf:

NOLA barges continued to be quoted at around $300/st ($9.38/unit) FOB. East Coast vessel business remained at $345-$350/mt CFR.

U.S. Imports:

July-February UAN imports were noted at 1.52 million st, falling 24.4 percent from the year-ago 2.01 million st. February imports dipped 37.1 percent, to 176,413 st from 280,483 st in the prior year.

U.S. Exports:

UAN exports softened 15.8 percent for July-February, to 557,951 st from the year-ago 662,893 st. February totals were off 29.7 percent, to 34,398 st from the year-ago 48,930 st.

Eastern Cornbelt:

The UAN-32 market remained at $325-$345/st ($10.16-$10.78/unit) FOB in the Eastern Cornbelt, depending on location, with the low at Mount Vernon, Ind., and the high at Burns Harbor, Ind.

Sources pegged the Cincinnati market at $330-$332/st ($10.31-$10.38/unit) for UAN-32 and $287-$291/st ($10.25-$10.39/unit) FOB for UAN-28, although supplies were described as tight in early April.

Western Cornbelt:

The UAN-32 market remained at $325-$345/st ($10.16-$10.78/unit) FOB for prompt tons in the Western Cornbelt, with the low at St. Louis and the high at Hastings, Neb. Reference pricing for May-June shipment remained at $340/st ($10.63/unit) FOB Fort Dodge, Iowa, and $345/st ($10.78/unit) FOB Sergeant Bluff.

California:

The UAN-32 market was pegged at $350-$370/st ($10.94-$11.56/unit FOB port terminals in California, with rail-DEL offers quoted at $365-$385/st ($11.41-$12.03/unit) on a spot basis for tons pulled through June.

Pacific Northwest:

The UAN-32 market remained at $385/st ($12.03/unit) FOB Pasco, Wash., and Umatilla, Ore., and $390/st ($12.19/unit) FOB Central Ferry, Wash. Sources reported limited DEL pricing at $430/st ($13.44/unit) in eastern Oregon and Washington, but some suppliers had reportedly pulled rail-DEL offers until June.

Western Canada:

The Western Canada UAN-28 market was pegged at C$425-$430/mt (C$15.18-$15.36/unit) DEL for limited offers, with the low reported in Saskatchewan.

Morocco Greenlights $1.3Bn Nigeria Fertilizer JV

Ammonia, Featured, Morocco, News, Nigeria, Phosphate

Morocco’s Official Gazette this week published a government decree that allows state-controlled OCP SA to take a 50 percent stake in Basic Chemicals Platform Nigeria Ltd., a joint-venture company established to oversee the development of a $1.3 billion industrial platform to produce ammonia and fertilizers in Nigeria’s Akwa Ibom State, Bloomberg reported.

The joint venture company was set up by OCP and Nigeria Agriculture Investment Co., a unit of the West African country’s sovereign wealth fund, Nigeria Sovereign Investment Authority (NSIA). OCP and NSIA on March 2 inked a Shareholders Agreement for the creation of the joint venture company (GM March 5, p. 1).

The proposed multipurpose industrial platform will utilize Nigerian gas and Moroccan phosphate to produce 750,000 mt/y of ammonia under a first phase development and 1 million mt of phosphate fertilizers annually from 2025, said OCP in a statement last month.

Among several other agreements signed in early March between the Moroccan fertilizers group and Nigerian companies was a Framework Agreement with Mobil Producing Nigeria (MPN), the Nigerian National Petroleum Corporation (NNPC), the Gas Aggregation Company Nigeria (GACN), and the NSIA on gas supply for the industrial platform.

In a separate development this week, Akwa Ibom State governor Udom Emmanuel, as part of his Easter Message last weekend, said work would soon start on the new Ibom deep seaport in the state, according to a This Day Live report. Nigeria’s Federal Executive Council (FEC) approved the license two months ago for the port, which will serve the proposed ammonia and fertilizer plant, among other developments in the state.

Ammonium Nitrate

Ammonium Nitrate, Market Watch, U.S. Exports, U.S. Gulf, U.S. Imports, Western Cornbelt

U.S. Gulf:

NOLA ammonium nitrate barges continued to be called $375-$400/st FOB.

U.S. Imports:

July-February ammonium nitrate imports softened 49.3 percent year-over-year, to 150,727 st from 297,080 st. Totals were up 82.5 percent in February, however, to 34,863 st from 19,101 st.

U.S. Exports:

February ammonium nitrate exports softened 11.3 percent, to 26,608 st from the year-ago 29,986 st. July-February exports lifted 55.6 percent, however, to 465,174 st from the year-ago 298,941 st.

Western Cornbelt:

Ammonium nitrate pricing remained at $425/st FOB on a spot basis in Missouri in early April.

CHS Reports 2Q Loss on Energy Performance; Ag, Nitrogen Shine

Earnings, News

CHS Inc., St. Paul, reported a $38.2 million net loss attributable to CHS for the second-quarter ending Feb. 28, 2021, compared to the year-ago net income of $125.4 million, saying that improved results for its Ag and Nitrogen Production segments could not overcome lingering COVID-19 impacts to the cooperative’s Energy business. Total revenues were $8.3 billion versus the year-ago $6.6 billion, a 26.1 percent increase.

“Improved trade relations between the U.S. and foreign trade partners, combined with our operating efficiency initiatives, led to record grain and oilseed volume increases and continued price gains, significantly improving our Ag segment earnings over the prior year,” said Jay Debertin, CHS President and CEO.

“Additionally, favorable growing conditions and overall strength in agriculture helped drive demand for crop inputs, including crop nutrients and crop protection products and services. Our Energy segment, while showing improvement over the previous quarter, continues to experience unfavorable refined fuels market conditions related to the COVID-19 pandemic and exceptionally higher costs for renewable energy credits. These factors resulted in volume and margin declines that significantly reduced earnings compared to the prior year,” he continued.

Second-quarter Ag income was $14 million on revenue of $6.94 billion, up from a year-ago loss of $20.8 million and $5.12 billion, respectively. Nitrogen Production, which represents the CHS stake in CF Nitrogen, saw income of $11.2 million versus $5.7 million, with the company citing higher urea prices for the uptick.

Energy posted a second-quarter loss of $54.7 million on revenue of $1.37 billion, compared to the year-ago positive $138.9 million and $1.46 billion, respectively.

CHS reported six-month net income of $31.4 million on revenues of $17 billion, down from the year-ago $303.3 million and $14.2 billion, respectively.

Six-month Ag income was $97 million on revenue of $14.4 billion, compared to the year-ago loss of $34.7 million and $10.8 billion, respectively. Six-month Nitrogen Production income, however, was down at $15.6 million from $22.2 million.

Energy posted a six-month loss of $121.9 million on revenue of $2.63 billion, down from the year-ago income of $301.1 million and revenue of $3.36 billion.

Another Class-Action Antitrust Claim Lodged Against Crop Input Companies

Featured, News, Specialty

Another class-action antitrust claim has been lodged in federal court against Bayer AG, Corteva Inc., BASF Corp, Syngenta Corp., Nutrien Ag Solutions, Growmark Inc., and other crop input producers and wholesalers/retailers, alleging that these companies are violating state and federal antitrust laws through a coordinated boycott of e-commerce sales platforms like Farmers Business Network (FBN). Other companies targeted by the complaint include Cargill Inc., Winfield United, Univar Solutions Inc., CHS Inc., Tenkoz Inc., Federated Co-operatives Ltd., and the J.R. Simplot Co. subsidiary Pinnacle Agriculture.

The new case was filed by four Rupert, Idaho-based farmers – B&H Farming, Tyche Ag, Ceres Ag LLC and Cedar Draw LLC – on behalf of themselves and others similarly situated, in the U.S. District Court for the District of Idaho on March 15. A very similar complaint – Piper v. Bayer CropScience LP – was filed by a farmer’s widow in Illinois in January (GM Jan. 15, p. 1).

Like the Piper case, the Idaho complaint alleges that the existing distribution process for crop inputs maintains “supracompetitive” prices by “denying farmers accurate product information, including pricing information, which would allow them to make better-informed purchasing decisions.” Also like Piper, the complaint noted that farmers are the least profitable level of the American food supply chain and are drowning in hundreds of billions of dollars of operating debt that is forcing them into bankruptcy at a record pace.

Again like Piper, the complaint noted that seed corn prices have risen 300 percent over the last 20 years, while corn yields have increased only 33-35 percent.

“…even as farmers are paying monopoly prices for a diminishing selection of seed strains produced by handful of giant corporations, they also are paying monopoly prices for fertilizers and pesticides, often to the same corporations,” said the complaint. “Since 2017, the Big Six seed and agrichemical companies have shrunk to four, after Dow merged with DuPont and Bayer purchased Monsanto. The top four producers of nitrogen fertilizer controlled 34 percent of the market in 1977, but by 2015 had increased their share to more than two-thirds.”

Plaintiffs also accused seed producers of seed relabeling, taking seeds that have been on the market under a given brand name for some time and repackaging the seeds under a new brand name so that they can be sold at a new, higher price, even though the seeds are the same.

While the initial focus of the complaint started out with the seed and crop protection companies, the plaintiffs argue that they audit wholesalers and retailers to make sure that they are not selling to FBN and other e-commerce sites.

“What we found was that the price differences farmers were experiencing in the market were horrendous,” the complaint cites FBN Co-Founder Charles Baron as saying. “You could have chemical prices being seven times each other between two farms and certain products, and seed prices varying 100 percent within a state. This is caused by a lack of transparency.”

Earlier, FBN had told Green Markets that it is not a party to the Piper case and would therefore have no comment. Also regarding Piper, BASF said it strongly disagreed with the allegations in the lawsuit and intends to defend itself vigorously. Nutrien denied all allegations but declined to comment further on “the potential litigation.”

Canada’s Competition Bureau launched an investigation into allegations that a number of manufacturers and wholesalers of seeds and crop protection products have anti-competitively refused to supply or restricted supply to FBN (GM Feb. 14, 2020). It is also investigating whether some of these entities may have engaged in coordinated behavior against FBN. According to the Bureau, the manufacturers and wholesalers under investigation include BASF, Bayer-Monsanto, Cargill, Corteva, Federated Coop, Univar Solutions, and Winfield.

In addition, the U.S. Justice Department is “monitoring” the Canadian probe as it weighs whether to launch one of its own, and the U.S. Federal Trade Commission is also investigating, according to the complaint.

Compass Minerals to Sell North America Micronutrient Assets to Koch Agronomic

Featured, News, Specialty

Compass Minerals, Overland Park, Kan., said on April 8 it has entered into a definitive agreement to sell certain of its North America micronutrient assets to Koch Agronomic Services LLC, a subsidiary of Koch Industries Inc., Wichita, for approximately $60.25 million, payable at closing and subject to a closing inventory adjustment. Compass Minerals will sell substantially all assets related to the company’s Wolf Trax®, Rocket Seeds®, and Hydro Bullet™ micronutrient product lines to Koch.

“Today’s announcement, combined with the previously announced sale of our South America specialty plant nutrition business, highlights our strategic focus on strengthening our balance sheet and maximizing the productivity of our core operations,” said Kevin S. Crutchfield, President and CEO. “We look forward to continuing to drive value for all stakeholders while producing and marketing an array of raw and manufactured materials supporting the transportation, agricultural, chemical, food, and animal nutrition sectors.”

“At Koch, we strive to provide solutions to make every ton of nutrient applied more efficient than it is today, and this agreement allows us to offer a platform of innovative solutions for nutrients beyond nitrogen,” said Steve Coulter, Koch Senior Vice President. “We look forward to continuing the growth of these products and supporting our customers’ micronutrients needs.”

The sales agreement includes intellectual property, inventory, customer and marketing materials, and research and development projects already in progress for those product lines. The transaction is expected to close second-quarter 2021, subject to customary closing conditions.

While Compass introduced Rocket Seeds and Hydro Bullet to the market in recent years, it bought Wolf Trax in 2014 from a privately-held micronutrient company based in Winnipeg, Manitoba, for C$95 million (GM April 7, 2014).

Compass recently announced the sale of its South American plant nutrition business to ICL Group, Tel Aviv, for $418 million (GM March 26, p. 1). Still on the market is the company’s South American chemicals and water treatment assets.

Compass will now focus on its core salt and sulfate of potash (SOP) businesses, noting that it has three location-advantaged salt mines in North America and the U.K., a number of North American production and packaging facilities, and solar evaporation operations on the Great Salt Lake that produce the majority of the company’s SOP, marketed as Protassium+®.

Bill Introduced to Reform HOS, ELD Requirements

News, News Briefs, Transportation, U.S.

Sens. John Hoeven (R-N.D.) and Michael Bennet (D-Colo.) on March 29 reintroduced the Modernizing Agricultural Transportation Act, bipartisan legislation to reform the Hours of Service (HOS) and Electronic Logging Device (ELD) regulations at the U.S. Department of Transportation (DOT).

The bill would establish a working group at DOT comprised of representatives from the transportation and agriculture industries, transportation safety representatives, and the U.S. Department of Agriculture (USDA) to consider the impact of existing HOS and ELD rules on the commercial transport of livestock, insects, and agricultural commodities, and to develop guidelines on reforming these rules.

Within 120 days of receiving the working group’s report, the bill would require the DOT to propose regulatory changes to the HOS and ELD regulations, taking into account the group’s findings and recommendations. In addition, the bill would delay enforcement of the ELD rule until the required reforms are formally proposed by the DOT.

The impact of HOS and ELD rules on the transportation of fertilizer or other crop inputs is not included in the language of the bill, according to Richard Gupton, Senior Vice President for Public Policy and Counsel at the Agricultural Retailers Association (ARA).

“We’ve worked to provide needed certainty and flexibility to our agricultural haulers under the HOS and ELD regulations so that they can get their products to market safely and efficiently,” said Sen. Hoeven. “This legislation builds on our efforts, establishing a process to address unnecessary burdens under these regulations and advance reforms based on the input of agriculture producers, while also ensuring roadway safety is maintained.”

This bill follows Sen. Hoeven’s successful efforts through the appropriations process to secure delays of the ELD rule in Fiscal Years 2018-2021. Cosponsors of the bill include Sens. Steve Daines (R-Mont.), Tina Smith (D-Minn.), Mike Rounds (R-S.D.), Mike Crapo (R-Idaho), James Risch (R-Idaho), Joni Ernst (R-Iowa), Mike Braun (R-Ind.), and Roger Marshall (R-Kan.).

“It is important that we maintain safe roads while also recognizing the unique flexibility needed to move Colorado’s agricultural products to markets,” said Sen. Bennet. “I look forward to working with Senator Hoeven and our colleagues to give farmers and ranchers a seat at the table as we push for more sensible rules around the transportation of agricultural goods.”

The bill is supported by numerous farm groups, including the National Pork Producers Council, National Cattlemen’s Beef Association, Livestock Marketing Association, American Farm Bureau Federation, the National Association of State Departments of Agriculture, American Sheep Industry Association, the National Turkey Federation, and the National Aquaculture Association.