| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 37.90 | 39.41 | 98.98 |
| CF Industries | CF | 71.93 | 74.01 | 152.23 |
| Intrepid Potash | IPI | 25.53 | 27.19 | 56.47 |
| Mosaic | MOS | 42.76 | 43.80 | 137.04 |
| PotashCorp | POT | 93.51 | 90.90 | 216.43 |
| Terra Industries | TRA | 25.09 | 24.47 | 46.74 |
| Terra Nitrogen | TNH | 99.36 | 100.78 | 109.23 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 28.89 | 31.34 | 38.23 |
| Deere & Co. | DE | 35.67 | 40.37 | 62.33 |
| Scotts | SMG | 35.25 | 34.71 | 17.09 |
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SPOT BARGE PRICES
War of words escalates in Agrium-CF contest
Agrium Inc. on June 29 released a sharply-worded criticism directed at Steve Wilson, chairman and CEO of CF Industries Holdings Inc., and the CF board for their continued refusal to engage with Agrium in its offer to acquire CF.
“Following a successful stockholder referendum on Agrium’s offer and after we reached out to CF and its advisors, CF’s Chairman and CEO Steve Wilson told me that CF would not meet with Agrium,” said Mike Wilson, Agrium’s President and CEO. “Contradicting recent public comments that CF is prepared to engage, he stated to me that ‘there is no reason to meet because nothing has changed.’ Steve Wilson said he called since stockholders wanted him to engage with Agrium. I do not consider returning my phone calls to say that CF refuses to meet to be engagement and I don’t think CF stockholders will either.”
Agrium reported on June 23 that CF stockholders had tendered approximately 30.14 million CF shares, or 62 percent of the total outstanding CF shares, into its offer of $40 in cash plus one Agrium share per CF share as of the offer’s expiration date at 12:00 midnight, June 22. Agrium subsequently extended the expiration date of the offer until 12:00 midnight, New York City time, July 22, 2009.
Referring to the “compelling majority of CF shares” that were tendered by CF stockholders in support of the Agrium offer, Agrium’s Wilson said “it is striking that CF would dismiss the results of the tender offer and refuse to make any effort to elicit additional value for their stockholders by engaging with us and demonstrating new value.
“As we explicitly stated publicly and directly to CF stockholders, tendering shares into our offer is an unambiguous message to CF’s board in support of a transaction with Agrium,” Wilson continued. “The simple fact is CF stockholders responded, and CF is ignoring them. A majority of CF’s long-term holders sold off their position some time ago and the large majority of the remaining stockholders clearly support an Agrium/CF combination.”
Agrium said it remains committed to acquiring CF and is actively considering “all available options to give the owners of CF the voice in the company they are entitled to.” Stated Wilson: “We promised CF’s stockholders that if we received a compelling majority in our June 22 tender offer we would press CF to engage with us to negotiate a mutually beneficial combination. We have reached out to the Chairman of CF’s board and have been rebuffed.”
CF CEO Stephen Wilson told The Wall Street Journal on June 26 that CF would consider a deal if it was a “compelling offer.”
Wilson said the shareholders tendered, not because they support the current offer, but that they want an event to occur. CF’s position is that nothing new has happened regarding price and that its shareholders really want a higher price. As previously reported, RiskMetrics, the advisory firm, said many CF shareholders are eyeing an offer of $90-$100. CF has indicated $100 or above might be a good number ?Çô at least one that Agrium could afford and still make the deal work.
House bill major topic at chemical security meeting; proposed AN rules due out this fall
A possible change to the nation’s chemical security laws was the major topic at the three-day 2009 Chemical Sector Security Summit held in Baltimore last week, where some 400 attendees gathered to discuss a wide array of topics. The Fertilizer Institute, the Agricultural Retailers Association, and the Society of Chemical Manufacturers and Affiliates (SOCMA), along with several other chemical associations, participated in the meeting.
Front and center was the recent party line (18-11) passage of the Chemical Facility Anti-Terrorism Act of 2009 (HR 2868) by the House Homeland Security Committee (GM June 29, p. 1). Clyde Miller, BASF director, corporate security, who moderated one of the panels, termed the bill the “Son of CFATS.” CFATS, the current Chemical Facility Anti-Terrorist Standards, was enacted in 2007 and is set to expire in October.
The industry supports the current CFATS, as does President Obama, who has endorsed its extension for another year. The “son,” however, brings with it mandated inherently safer technologies (IST) provisions and the allowance of lawsuits by uninjured plaintiffs. Even though the new bill contains an economic hardship exemption, industry wants to nip the bill in the bud so it will not have to prove its hardship to government bureaucrats.
William Allmond IV, SOCMA vice president, government relations, told a press conference that CFATS is focused on the hardening of facilities on the outside and inside, not environmental impacts. He said those and workplace issues are handled by EPA and OSHA.
While the comments over IST were pretty intense, Allmond was hopeful that the original CFATS will stay in place. He said only one House committee has approved the bill and the Senate hasn’t begun writing one. With health care and all the other issues before Congress, extending the current bill would be an easy option with only about four months left to go. He also credited President Obama for supporting a one year extension as taking the wind out of the momentum for the new bill.
While the Democrats now hold a 60-40 edge in the Senate, Allmond and others cited the Senate’s lack of action on the issue. In addition, Sen. Joe Lieberman heads the Senate Homeland Security and Government Affairs Committee, and Allmond said Lieberman is more careful and cautious on the issue. It should be noted that TFI has also argued about the dangers of IST and its possibly dire impacts to the fertilizer industry. There are several farm state senators on the Democratic side of the aisle.
DHS Senior Intelligence Officer Daniel Cooler pretty much summed up why we have CFATS in the first place. He said that while DHS knows of no specific threat to the chemical industry, it does have intelligence that the industry is of interest to Al Qaeda. He said they are interested in any event that would be dramatic, economic, and cause mass casualties in an urban area.
DHS said proposed rules for ammonium nitrate regulation and record-keeping should be out this fall. They are expected to soon be handed over to the DHS Office of General Counsel for review, and will involve the recording of AN purchases and registration of buyers. One question to be answered is how DHS will handle the buyer background checks. Will buyers be compared to a list of terrorists, a list of criminals, or both?
USDA report shows more corn and soybeans in 2009
USDA’s National Agricultural Statistics Service (NASS) raised some eyebrows on June 30 with the release of its latest Crop Production report, which put the U.S. corn crop at 87 million acres, the second highest acreage in more than 60 years and some 2 million acres higher than USDA’s March 2009 Prospective Plantings corn estimate.
That figure, up 1 million acres from 2008 and second only to 2007’s record crop, came as a surprise to many after the planting delays experienced during an extraordinarily wet spring in the Eastern Cornbelt. Despite those delays, USDA said, U.S. farmers were able to plant 97 percent of the intended corn acreage by early June, trailing the 10-year average of 98 percent by only one percentage point.
Following the report’s release on Tuesday, July corn dropped 35 cents to $3.42 per bushel, and the December corn price fell the maximum amount of 30 cents during Tuesday’s afternoon trading session, to $3.67 per bushel. The Wall Street Journal cited an analyst from J.P. Morgan who said the acreage increase “is sufficiently large to meaningfully recast the longer-term outlook for corn prices,” and another from Citigroup who predicted that corn prices will drop below $3 per bushel before the year is through if favorable weather produces good yields.
Not everyone was buying the new corn acreage estimates. One Nebraska dealer told Green Markets that he “has a lot of problems” with the USDA numbers, citing USDA’s estimate that corn acreage in the state jumped from 8.8 million in 2008 to 9.4 million this year. “There is no way we have that many extra acres, 600,000 acres,” he said. “Just doing the math, we didn’t have that kind of increase. It didn’t happen.”
The report also showed an upswing in planted soybean area in the U.S. to a record 77.5 million acres in 2009, 1.8 million acres higher than last year and 1.5 million acres above the March estimate. Compared with 2008, soybean planted area is up more than 200,000 acres in five states: Kansas, Mississippi, Missouri, North Dakota, and South Dakota. USDA said the largest decrease is in Nebraska, down 400,000 acres from 2008, as many farmers switched to corn this year. The report noted record high planted soybean acreage in Kansas, New York, North Dakota, and Pennsylvania.
Soybean prices also fell in the wake of the report’s release, with the November contract price dropping 22.8 cents on Tuesday, or 2.3 percent, to $9.61 per bushel.
All wheat planted area is estimated at 59.8 million acres, down 5 percent from 2008. USDA said the 2009 winter wheat planted area, at 43.4 million acres, is 6 percent below last year but up 1 percent from the previous estimate.
All cotton plantings for 2009 are estimated at 9.05 million acres, with upland cotton coming in at 8.91 million acres. Both figures are 4 percent below last year and the lowest since 1983. In Mississippi and Louisiana, producers planted the lowest upland acreages on record at 270,000 and 240,000 acres, respectively. The largest percentage decline is in California, however, where upland producers planted just 65,000 acres, 46 percent less than last year. USDA reported increases in upland cotton acreage from last year in Arizona, Georgia, Oklahoma, South Carolina, Tennessee, and Virginia.
Overall, U.S. farmers planted 320.9 million acres to principal crops in 2009, the report said. This is 3.9 million acres less than last year, but 3.9 million acres more than was indicated in the March 2009 Prospective Plantings report. The most significant acreage declines were in North Dakota, down 2.1 million, and Texas, down 570,000 acres.
NASS based its acreage estimates on surveys conducted during the first two weeks of June on approximately 11,000 segments of land and from a sample of approximately 73,500 farmers across the U.S. The Aug. 12 Crop Production report will contain the first 2009 estimates of corn and soybean yield and production.
Explosion halts NH3 production at Yara plant
Tertre, Belgium-An explosion at Yara International ASA’s Tertre plant in Belgium on June 27 is likely to halt ammonia production for a prolonged period, the company announced on June 29. Although two people were injured, their injuries were not critical. The explosion took place early Saturday morning, and Yara spokesman Asle Skredderberget said the plant suffered “substantial” damage in the blast. “It was enough damage that it will take a while to assess how it will affect operations ?Çô and for how long,” he told the Associated Press. “We’re talking months, not weeks.” The cause of the blast has not yet been determined, but an investigation is underway, included the impact on fertilizer production. The company was also assessing the possible consequences on the rest of the Tertre operation. The explosion was the second at a Yara facility in the last seven months. On Dec. 3, 2008, five people were injured after an explosion and fire at Yara’s Porsgrunn #3 NPK plant in Norway (GM Dec. 8, 2008). The Tertre plant has annual production volumes of 420,000 mt of ammonia and 920,000 mt of finished fertilizer products for markets in France, Germany, Belgium, and the Netherlands, as well as industrial chemicals for a range of European customers. It accounts for 5 percent of Yara’s total ammonia output, and 15 percent of its total fertilizer production.
Trigon Uranium seeks new identity as potash firm
Toronto-Trigon Uranium Corp. and Intercontinental Potash Corp. (ICP) said June 19 that they have entered into a non-binding letter of intent pursuant to which Trigon intends to make an offer to acquire all of the issued and outstanding common shares of ICP, a private Canadian company, by way of a share exchange. ICP is engaged in the exploration and development of potash properties. Trigon currently owns 15,000,000 common shares of ICP, approximately 37 percent of the company. Upon completing the deal, Trigon intends to change its name to Intercontinental Potash Corp. and continue to be listed on the TSXV in the mining issuer category, while ICP intends to change its name to ICP Corp. Citing the current market conditions for junior uranium exploration companies, Trigon believes it will fare better in the potash sector. ICP is seeking to commercialize polyhalite as a slow-release fertilizer from its Ochoa project in Lea County, N.M. Polyhalite is an evaporate mineral containing potassium, magnesium, sulfate, and calcium. ICP is also investigating other areas around the world for the possibility of exploring for and developing polyhalite, and plans to eventually produce and market the product as a multi-nutrient, slow-release, chloride-free fertilizer. ICP controls 100 percent of the Ochoa property, which consists of federal sub-surface potassium permits granted by the Bureau of Land Management comprising an area of 36,589 acres.
Belarus, Turkmenistan agree on potash project
Minsk-Belarus reports that it has agreed with Turkmenistan to help develop its Garlyk potassium salt fields. The Belarusian company Belgorkhimprom will act as the general contractor and provide technology and mineral processing equipment. Turkmen employees will be trained by Belarus. According to the Belarus government website, the planned production capacity will be 7 million mt of ore per year, including 1.4 million mt of potash fertilizers. The project has an estimated cost of nearly $1 billion.
Deer repellant/fertilizer available in 11 states
Reno-Itronics Inc. reports that its new deer repellant/fertilizer is now available in 11 states – Rhode Island, Pennsylvania, New York, New Jersey, Massachusetts, Maryland, Delaware, Alabama, Colorado, Utah, and Nevada. The registration process is underway in Virginia. “Our systemic product is effective, lasts for up to three months, and does no harm to the animals,” said Dr. John Whitney, company founder and president. “We are selling both a 20 gallon spray kit for plant and tree nurseries and landscape maintenance companies, and a one gallon spray kit for individuals. We remain confident that this breakthrough product has a huge potential market. Deer cause multi-billion dollar damage annually, including destroying suburban landscapes and spreading Lyme disease.”
Feds charge Detroit official in Synagro probe
Detroit, Mich.-Federal prosecutors have concluded their investigation of the Synagro sludge contract bribery case as it related to the Detroit city council. They brought charges against one of its members, who is president pro tem and also the wife of a Michigan congressman, but have hinted that others may still be on the hook. Monica Conyers subsequently pleaded guilty in U.S. District Court and according to local press reports has resigned from the council. “This conviction marks the conclusion of the government’s investigation of Ms. Conyers and the elected members of the Detroit City Council relating to the approval of the Synagro contract, though the investigation relating to the Synagro contract continues as it relates to others,” stated Terrance Berg, U.S. Attorney for the eastern district of Michigan. Berg, however, didn’t indicate if “others” might include 20 officials with Houston-based Synagro, whose Michigan vice president, James R. Rosendahl, pleaded guilty, and a contractor based in Detroit, Rayford Jackson, who entered a conditional plea on June 15. The sludge contract was rescinded in January in an agreement between Synagro CEO Robert C. Boucher Jr. and Detroit Mayor Ken Cockrel Jr., who had been asked by the city council a day after Rosendahl pleaded guilty to bribing city officials to end the $1.2 billion, 25-year contract. Synagro, which has been wholly owned by the international Carlyle Group since 2007, had been working for the Detroit Water and Sewage Dept. to modernize its treatment processes, which had been the source of complaints from residents, as well as the distribution and disposal of biosolid material. In her court plea, Ms. Conyers admitted to misusing her office for personal gain. Specifically, according to the records, Ms. Conyers and an aide received payments from persons who sought contracts, money, and/or favorable treatment from the city council or the pension fund. One example of this was in 2007, when Conyers admitted to receiving cash payments from Rayford Jackson knowing that the payments were made to influence her to vote in favor of the Synagro contract. The charge carries a maximum sentence of five years in federal prison and a fine of up to $250,000.