All posts by mickeybarb@charter.net

Crops/Weather

Eastern Cornbelt:

A band of lake-effect snow led to a winter weather advisory for parts of northeast Illinois on Feb. 11, with forecasts warning of 2-4 inches of snow and gusty winds. Much colder temperatures moved in after the precipitation, with weekend wind chills expected to drop to the negative 20s and highs staying in the single digits.

The cold front was also impacting central Illinois, with wind chill forecasts calling for lows down to -14 on Feb. 12.

A storm at midweek brought up to two inches of snow to central Indiana and freezing rain to southern areas of the state, while snowfall ranged from 1-3 inches in parts of central and southern Ohio to three or more inches in northern Ohio. Temperatures were expected to drop sharply in both states over the weekend.

Western Cornbelt:

Wind chill advisories were in effect across Iowa and Nebraska at midweek, with weekend lows expected to drop to -35 in Des Moines. More snow was also in the forecast, with parts of northern and northwestern Nebraska looking at an additional 3-6 inches of accumulation on Feb. 12.

Ice storm warnings were issued for parts of southern Missouri during the week, while central and northern areas of the state were bracing for subzero lows by the weekend. More winter precipitation was on tap for parts of Missouri through the weekend and into next week.

Northern Plains:

Frigid temperatures enveloped the Northern Plains during the second week of February, with wind chill warnings in effect for all three states at midweek.

Lows dropped to -14 in eastern South Dakota during the week, with wind chills falling to a negative 30-40. The cold front has some staying power, as well. The high in Sioux Falls, S.D., on Feb. 14 is expected to top out at -6 degrees, with weekend lows across South Dakota dropping to the negative 20s in many locations.

Wind chills in northern Minnesota and North Dakota also dropped to the negative 40s as the week progressed, with actual temperatures on Feb. 14 expected to fall to -30 in northern areas of both states.

Northeast:

Winter weather conditions moved through the Northeast during the second week of February, with 2-6 inches of snow reported across southern and central New England at midweek. New England temperatures also struggled to climb out of the 20s as the week advanced, with lows dropping to zero in northern New England.

Snow, sleet, and rain was also reported across much of New York, Pennsylvania, and the Mid-Atlantic region during the week, with 1-3 inches of snow accumulation reported in central Pennsylvania at midweek. Forecasts warned of 2-4 inches of snowfall in the Baltimore area by the end of the week.

Eastern Canada:

Cold, snowy weather was reported across Eastern Canada during the second week of February. In Western Canada, actual temperatures dropped to -40 C at midweek on the central Prairies, with wind chills falling even lower.

Environment Canada on Feb. 7 issued an Extreme Cold Warning for parts of Ontario, with wind chills falling to -40 C in some locations and up to 20 cm of lake-effect snow expected near the west end of Lake Ontario.

While Quebec escaped the worst of the cold weather and heavy snowfall, a powerful winter storm on Feb. 7-8 brought heavy snow to the Maritimes, with up to 40-50 cm of accumulation reported near Halifax and across some sections of Newfoundland.

“Winter has graced us with her presence, but it is late enough in the winter and with little significant snowfall, our expectations are another early spring,” said one regional contact. “Perhaps not as early as last year, but it certainly will be earlier if current trends continue.”

Transportation

U.S. Gulf:

Construction activities prompted a navigation shutdown through Industrial Lock on Feb. 8 spanning 7:00 a.m. to 5:30 p.m. Lengthy delays continued to be reported on Feb. 10, with tows noted queueing more than 50 hours to pass.

Repairs to the Port Allen Lock guidewall damaged in a January barge collision prompted ongoing towing restrictions during the week. Westbound vessels traveling with more than one barge were required to lock with an assist vessel, while tows passing without an assist boat were limited to one barge per turn. Eastbound tows longer than 650 feet were required to utilize an assist vessel. Wait times were generally reported in the 10-24 hour range for the week.

Towing restrictions at Algiers Lock remained in effect for the week. Vessels with tow configurations wider than 60 feet were limited to 600-foot lengths, while tows running shy of 60-foot widths were permitted lengths up to 700 feet. Sources described the restrictions as essentially capping tows to four standard barges or two 30,000 mt tankers per turn. Algiers Lock dolphin repair scheduled for Feb. 22 was projected to halt travel from 7:00 a.m. to 6:00 p.m.

Sources described ongoing repairs to the Rigolets Bridge, located in the East Canal, projected to run through March 12. The work limited access to the Pearl River to three openings per day. Vessels were green-lighted to pass the structure at 5:30 a.m., 1:30 p.m., and 9:30 p.m.

Sources reported thick fog halting overnight movements throughout the Gulf and Canals on Feb. 8. Forecasts predicted a repeat of overnight slowdowns continuing through Feb. 11.

Delays at Algiers Lock were noted up to six hours for the week, while intermittent 12-hour waits were reported through the Colorado Locks system. Brazos Lock delays were quoted up to 23.5 hours.

Mississippi River:

Dike work planned at Mile 770 on the lower Mississippi River will reportedly block southbound movements daily from 7:00 a.m. to 6:00 p.m. in late February.

Main chamber work kicked off on Feb. 1 at the upper river’s Lock 27, completely blocking movements through the chamber. Detours were available through the smaller auxiliary unit, with delays quoted up to 43 hours for the week. Work at the site is set to run through Feb. 18.

Upper river locks that are currently closed for the winter are tentatively scheduled to begin opening to spring navigation on March 15. Locks 13-19 will be the first to resume navigation, while Lock 25 will restart lockages as early as March 31, weather permitting.

Illinois River:

Reported “arctic” conditions and rapidly worsening ice floes on the Illinois Waterway led to severe towing restrictions during the week. Cold weather that is expected to persist for 10-14 days prompted cuts to barge counts. As a precautionary measure, some shippers reportedly suspended travel altogether until conditions improve.

The icy conditions on Feb. 8 prompted width restrictions at Marseilles Lock, Starved Rock Lock, Peoria Lock, and LaGrange Lock, limiting tows to 89 feet, or about six barges per tow.

Overnight transit stoppages were reported at Mile 47 for dredging operations on Feb. 10-16. Traffic was noted passing unobstructed during daytime hours.

Demolition of Utica Bridge, located at Mile 230, was postponed from Feb. 11 due to cold weather. A new date for the project has not yet been announced. Area travel was anticipated to be unavailable for at least 24 hours while work is underway.

Wickets remained up at both Peoria Lock and LaGrange Lock. Wait times at Peoria Lock were noted up to nine hours, while 25-hour delays were observed through LaGrange during the week.

Ohio River:

The primary chamber at Meldahl Lock is slated to reopen on Feb. 12 after shutting on Feb. 1 for fill valve repairs. An additional machinery gate repair project previously on the books for Feb. 22 through April 30 was rescheduled for April 12 through June 12. Sources predicted substantial delays while the project is underway.

The secondary chamber at Markland Lock is closed through Oct. 29 due to structural miter gate damage, sources said. Tows have continued to lock through the primary chamber, with minimal delays reported. The chamber was offline through the majority of 2020.

Auxiliary chamber closures at Smithland Lock were reported to begin on Feb. 1. The project will see consecutive 30-day shutdowns of the lock’s two secondary chambers, scheduled to conclude on approximately April 1. Transit will remain available via the main chamber, with minimal delays expected.

New Cumberland Lock is set to see a secondary lock chamber closure from March 8 through June 10. Sources said an emergency secondary chamber closure at Greenup Lock halted movements on Feb. 9-15. The main chamber remained available for passage, with delays noted up to seven hours on Feb. 10.

The primary chamber Greenup Lock was previously slated to shut from Feb. 11 through March 11. Sources expected the main chamber project to begin following the conclusion of auxiliary chamber work. A second auxiliary chamber shutdown is tentatively scheduled to run from March 11 through April 11.

The Cannelton Lock main chamber is scheduled to shut from June 21 through Nov. 19. Sources are expecting considerable delays.

Falling water levels prompted Olmsted Lock operators to begin raising wickets on Feb. 10. Once fully raised, traffic was expected to reroute through the lock chamber, ending a period of lockless travel reported one week earlier.

The Tennessee River’s Watts Bar Lock returned to normal navigation on Feb. 5 following a weeklong stretch of daily four-hour shutdowns. Kentucky Lock passages were typically quoted in the 3-7 hour range for the week.

On the Cumberland River, Cheatham Lock is scheduled for a main chamber shutdown from April 12 through June 21. The Corps expects to schedule four openings to pass waiting vessels while the project is underway.

Arkansas River:

Navigation resumed through Norrell Lock, located at Mile 10, at 6:00 p.m. on Feb. 6, ending a repair operation that began on Feb. 2.

Scotts Posts Historic 1Q Income; Ad to Appear During Super Bowl

Scotts Miracle-Gro Co., Marysville, Ohio, posted a first-quarter profit for the first time in history. The company historically records a loss for its first-quarter.

Scotts income from continuing operations of $25.2 million ($0.43 per diluted share) for the first-quarter ending Jan. 2, 2021, was up 135 percent over the year-ago loss of $71.3 million ($1.28 per share) for the quarter that ended Dec. 28, 2020. However, due to the company’s financial calendar, first-quarter 2021 included five more days than the year-ago quarter.

First-quarter sales were up 105 percent to $748.6 million from the year-ago $365.8 million.

“While we anticipated a strong start to fiscal 2021, both the U.S. Consumer and Hawthorne segments surpassed our expectations and put us on a good trajectory for the balance of the year,” said Jim Hagedorn, Scotts Chairman and CEO.

“In U.S. Consumer, we are working closely with our retail partners as they prepare for the upcoming growing season. And Hawthorne continues to demonstrate its best-in-class performance within its industry, working with retailers and growers to help drive their success,” he said.

U.S. Consumer profits were up 213 percent to $45.3 million from the year-ago loss of $40.1 million, while sales were up 147 percent, to $408.2 million from $165.5 million.

Hawthorne profits were up 223 percent, to $40.4 million from the year-ago $12.5 million, while sales were up 71 percent to $309.4 million from $180.7 million.

The company has boosted overall fiscal year sales growth projections to 1-6 percent from 0-5 percent. “Our strong start gives us renewed confidence in our full-year outlook although we remain sensitive to the challenges in the second half of the fiscal year against historic comparisons,” Hagedorn added.

“We now believe we have enough visibility, however, to raise our full-year sales growth outlook for Hawthorne to a range of 20 to 30 percent, compared with our previous outlook of 15 to 20 percent. Despite the historically strong start in U.S. Consumer, it remains too early in the season to adjust our outlook for that business,” he continued. U.S. Consumer sales guidance remains at 0 to minus 5.

Scotts reaffirmed fiscal year adjusted earnings per share projections of $8.00-$8.40.

Hagedorn said the company continues to strengthen its relationship with gardeners, including plans for its first commercial especially produced for the Super Bowl. It is expected to run during the second half of the Feb. 7 game. “That kind of reach, coupled with our data-driven and highly targeted approach to social media, is key in our efforts to retain the millions of new consumers who have entered our category over the past year.”

“We’ve been engaging with consumers throughout the winter, spending three times more in media last quarter than we have ever at this point in the year,” Hagedorn said in the company earnings call. “Keeping those consumers engaged and motivated is the goal of the Super Bowl initiative, which is part of an eight-week kickoff to the biggest lawn and garden season ever.”

Hagedorn added that first-quarter results were a bit tempered by increased marketing spending, as well as the impact of emerging input costs. However, the company said it is 75 percent locked in for the year with respect to input costs, and it is looking at building inventory over the second half to better fulfill customer needs.

“So as we are looking to build our own inventory, our forecast went up, which will require more urea, resin, and just internal distribution costs that we originally built into the forecast. Those are the areas where we’re seeing some pressure,” said Cory Miller, Vice President of Finance.

Southern Towing Acquires Devall

Southern Towing Co. (STC), Chicago, an affiliate of CC Industries, announced on Feb. 2 that it has acquired Devall Towing, Sulphur, La., from the Devall family. Founded in 1952, Devall is a towboat and barge operator for specialty chemicals along the Gulf Intracoastal Waterway and Lower Mississippi River. It operates a fleet of 36 towboats and 125 liquid tank barges.

STC said the acquisition expands its operations into specialty chemical products, adding that the combination of Devall’s long-standing customer relationships with STC’s upriver capabilities allows Devall and STC to provide integrated marine transportation solutions across the Gulf Intracoastal and U.S. inland waterways.

“The acquisition significantly enhances Southern Towing’s Gulf Coast capabilities,” said STC CEO Ed Grimm. “We look forward to growing our transportation capabilities, while continuing to provide superior service to the customers we are privileged to serve.”

Devall will continue to operate under the Devall brand as a new division of STC. The members of the management team will continue in their current roles.

“The Devall family and team are excited to partner with both Southern Towing and CCI,” said Kenny Devall, Devall Chief Operating Officer, who will continue to lead the company. “We believe that the cross-selling opportunities with Southern Towing are extremely compelling, and that CCI’s extensive experience and resources positions Devall for future growth.”

“Devall shares the same core values and vision that we have at STC and CCI,” said Bill Crown, CCI President and CEO. “We look forward to building on those shared values to further invest in and grow Devall and STC.”

Founded in 1958, STC is a major inland tank barge operator specializing in the transportation of anhydrous ammonia and bulk liquid fertilizer products, including UAN, throughout the Mississippi River System and the Gulf Intracoastal Waterway. It operates the largest fleet of anhydrous ammonia barges in the United States. It also provides towing services for other commodities, including refined petroleum, chemicals, coal, grain, and aggregates.

STC was acquired by CCI in 2019 (GM June 14, 2019) from investment firm Trive Capital, Dallas, and McComb Partners, the investment division of the San Antonio-based McCombs family.

CCI, Chicago, operates within Henry Crown and Co. as a holding company for the Crown family’s privately-held companies, which include Gillig Corp., Great Dane Trailers, J.L. Clark, Miracapo Pizza Co., Provisur Technologies, Riverside Rail, Selig Sealing Products Inc., and Trail King Industries.

Kropz Provides Phosphate Rock Updates

Junior phosphate rock miner Kropz SA (Pty), Century City, South Africa, said on Feb. 2 its Elandsfontein phosphate project in South Africa’s Western Cape Project continues on budget, has made significant progress, and remains on track for achieving the target date for production in fourth-quarter 2021.

Targeted capacity is 1 million mt/y (GM Oct. 25, 2019). Kropz said earthworks are largely complete and civil construction is advancing. Fabrication of structural steel, platework, and piping has commenced, and the first major mechanical equipment has been delivered to site.

On Feb. 4, Kropz gave an update on the Hinda project in the Republic of the Congo. The company said it has appointed Hatch Africa (Pty) Ltd., a global engineering and construction firm, to complete the updated feasibility study on Hinda. This follows the conclusion of the focused logistics study, completed by Hatch in September 2020.

The updated feasibility study will target a phased approach in line with the terms of the mining investment agreement, with initial production of 1 million mt/y of phosphate rock being exported from the existing port facility at Pointe-Noire, which is 50 km from Hinda. A second phase production ramp-up of 2 million mt/y will also be evaluated with export from a new port site, located north of Pointe-Noire. The updated feasibility study will be concluded by the end of September 2021.

Yara 4Q, FY 2020 Results Forecast; Shares Hit 52-Week High

Yara International ASA results due out Feb. 9 are expected to be better for the year than the quarter, according to the Bloomberg Consensus, the average estimate made by key analysts as of Feb. 1.

Analysts are projecting the company to have FY20 net income of $626.9 million on revenues of $11.84 billion, up from the year-ago $599 million and $12.94 billion, respectively. However, fourth-quarter net income averaged out at $168.5 million on revenues of $3.06 billion, down from the year-ago $199 million and $3.03 billion, respectively.

In other news last week, Yara shares hit a 52-week high on the OBX Oslo Exchange, trading at 404.80 kroner on Feb. 3. The previous high had been 403.80 kroner on Feb. 2. The stock, which has enjoyed a 14 percent increase year-to-date, had a 52-week low of 263.12 kroner on March 16, 2020.

According to Feb. 4 Bloomberg report, Citi has raised its target for Yara to 460 kroner, up from 420 kroner.

  4Q-19 4Q-20 Est. 2019 2020 Est.
Revenues        3,028 3,064 12,936 11,842
Operating Income 211 235 989 1,227
EBITDA 499 480 2,095 2,220
Adj. EBITDA 525 477 2,165 2,158
Net Income 199 169 599 627

*USD millions

Itafos – Management Brief

Itafos, Toronto, on Feb. 2 announced the appointment of David Brush as Chief Strategy Officer, effective Jan. 1, 2021. He has been serving as a consultant since Dec. 1, 2020. He will be responsible for strategy development and implementation, including related capital structuring and corporate development initiatives.

“We are pleased to bolster our management team by adding Dave’s experience and expertise in strategy, finance, and operations,” said Itafos CEO G. David Delaney. “Dave will be instrumental as we look to improve our capital structure and pursue growth opportunities in the agricultural sector.”

Itafos said Brush is a senior executive with over 30 years of experience in all aspects of global business operations, business development and strategic planning, financial management, personnel development, and general management. During his career, he has been involved in taking two companies public, led a significant number of M&A transactions, and managed billion dollar global business segments.

Prior to joining Itafos, he was founder and Managing Partner of Idris Capital, where he advised clients on M&A transactions and restructurings across a variety of sectors, including agriculture, fertilizer, packaging, building products, and consumer products. Previously, he also held senior roles at CPI Card Group Inc., Rexnord Corp., and Pactiv Corp., and began his career as a certified public accountant with PricewaterhouseCoopers. He holds a B.A. in Accounting from the University of Northern Iowa.

Arianne Phosphate – Management Brief

Arianne Phosphate, Saguenay, Quebec, a development-stage phosphate mining company advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, on Feb. 4 announced that it has appointed Ms. Pier-Elise Hebert-Tremblay as the CFO, effective immediately. She replaces Andrew Malashewsky, who had held the position since January 2019. The company thanked him for his time and efforts in the position.

“Pier-Elise has been involved with Arianne almost since its inception and advanced her way through the company, proving herself to be a very valuable member of the team,” said Brian Ostroff, Arianne CEO. “I have had the opportunity to work closely with Pier-Elise since my time as CEO and, as CFO, I have no doubt she will play an integral part in advancing Arianne’s efforts to secure financing and partners as it moves its Lac à Paul project towards development. With the recent significant upturn in the agricultural sector and increased interest in Arianne, the timing couldn’t be better.”

She served as Financial Controller of Arianne since 2010. She has been a member of the Certified Professional Accountants of Quebec and Canada since August 2011 and holds a bachelor’s degree in accounting and an MBA from the University of Quebec at Chicoutimi.

Bayer Reaches Agreement with Roundup Plaintiffs

Germany-based Bayer AG on Feb. 3 reported that it has reached a settlement to pay as much as $2 billion to manage and resolve potential future claims related to Roundup herbicide. Elements of the revised settlement, according to a Bayer statement, include the establishment of a fund to compensate qualified claimants during an initial four-year program; an advisory science panel whose findings would not be preclusive but can be used as evidence in potential future litigation involving class members; and a robust notice program.

“Plaintiffs’ class counsel are filing today a motion for preliminary approval of the class agreement with Judge Vince Chhabria of the U.S. District Court for the Northern District of California, who presides over the Monsanto Roundup™ multidistrict litigation,” the company said. “The class plan is intended to be one part of a holistic solution designed to provide further closure to the Monsanto Roundup™ litigation.”

Bayer said it was also taking additional steps to provide greater transparency and access to glyphosate studies, including seeking permission from the U.S. Environmental Protection Agency (EPA) to add a reference link on the labels for its glyphosate-based products that will provide consumers with access to scientific studies and information that the company has permission to disclose or are in the public domain.

Bayer, which took over Roundup as part of its 2018 acquisition of Monsanto Co. for $63 billion, announced last June that it had agreed to make a payment of $8.8-$9.6 billion to resolve approximately 75 percent of the then current Roundup cases (GM June 26, 2020). The settlement included an allowance expected to cover unresolved claims, and $1.25 billion to support a separate class agreement to address potential future litigation.

Bayer reported last fall (GM Sept. 18, 2020) that it had settled approximately 15,000 more U.S. lawsuits over Roundup, bringing the total number of resolved cases to 47,000 of an estimated 125,000 filed and unfiled Roundup claims.