Registrants who tuned in March 1 to the Green Markets 2011 Agriculture & Fertilizer Outlook webinar heard the latest projections about 2011 crop acreage, crop prices, and fertilizer supply and demand. The interactive event, the sixth annual spring outlook conference sponsored by Green Markets, allowed registrants to hear, by means of telephone or computer, three industry experts talk about a range of issues, augmented with more than 60 graphs and slides.

Dr. Gerald Bange, chairman of the World Agricultural Outlook Board for USDA, kicked off the event with a look at the USDA’s most recent acreage estimates for major crops in 2011/12. Bange said USDA is estimating U.S. corn acreage for 2011/12 at 92 million acres, up 4.3 percent from the 2010/11 crop year. Soybeans were projected at 78 million acres, up 0.8 percent from last year, while U.S. wheat production for 2011/12 was estimated at 57 million acres, up 6.3 percent from the previous year.

Bange said all cotton acres are estimated at a whopping 13 million acres in the U.S., up more than 18 percent from the 2010/11 crop year, while U.S. rice acreage is projected to plummet 20.9 percent to 2.88 million acres for 2011/12. Conservation Reserve Program (CRP) acreage for 2011/12 is currently estimated at 31.9 million, up 1.6 percent from the prior year.

Bange compared current retail prices in Illinois with those of one year ago for anhydrous ammonia, urea, DAP, and potash, noting increases across the board ranging from 20-50 percent. He also offered graphs detailing projected net returns for corn, soybeans, and wheat in 2011. In a series of slides detailing supply and demand figures, Bange also mapped out projected prices, stocks-to-use ratios, and ending stocks for corn, soybeans, wheat, and cotton.

Tom Blue, senior fertilizer industry consultant for Blue, Johnson and Associates, said fertilizer use in the U.S. will be up in fiscal year 2011, and total nutrient consumption will approach the volumes achieved in FY2007.

“In absolute terms, we see no basic, inherent shortages of N, P, and K supply capability for both the domestic and international market,” Blue said. “The principal issues are, as always, supply at what price, and is it/will it be at the right place at the right time.”

Blue offered detailed 2011 demand estimates in the U.S. for ammonia, UAN-32, ammonium nitrate, ammonium sulfate, DAP, MAP, 10-34-0, and potash. In a graph tracking the fertilizer and crop price relationship, Blue said 2011 is looking very similar to the banner year of 2008.

Looking ahead, Blue observed several trends in U.S. fertilizer markets, including an ongoing shift from DAP to MAP; growing demand in the Midwest for applied sulfur and capacity additions planned to meet that demand; and continued growth in North American potash capacity “well beyond what increased demand for potash will be in North America.”

Blue addressed as well the recent political upheavals in Northern Africa and their potential impact on regional commodity imports and exports. He also talked about the expansion of the world money supply, and whether firming commodity markets are sustainable or if another crash is in store.

That theme was picked up by Richard Brock, president of Brock Associates, an agricultural marketing advisory service and publisher of The Brock Report. Brock warned of the “managed money explosion” and the influence of index funds on commodity markets. While noting that current bullish attitudes are much the same as they were in 2007/08, Brock cautioned that “every single bull market in commodities has been followed by a bear market. It’s not a question of if, but when and how much.”

Brock contrasted his company’s 2011 acreage estimates with USDA’s, and also offered detailed projections on global stocks-to-use ratios, 2011 crop budgets, and U.S. farm production expenses and i

The government of Trinidad and Tobago has awarded Methanol Holdings Trinidad Ltd. (MHTL) the contract to build an anhydrous ammonia and downstream derivative project at an estimated US$1.9 billion. According to the Trinidad press, the project will produce 1,850 mt/d of anhydrous ammonia to be used to make downstream products, likely urea and melamine.

Colonial Life Insurance Co. (CLICO) owns a majority stake in MHTL. However, due to its financial downfall a few years ago (GM Feb. 23, 2009), it is now managed by the Trinidad government.

MHTL is already the majority owner of a $1.5 billion ammonia-urea nitrate-melamine complex (AUM) in the country. It was completed in late 2009. AUM comprises seven plants generating 1.5 million mt/y of UAN-32 and 60,000 mt/y of granular melamine. Helm Fertilizer Corp., which also has an equity stake in AUM, handles the offtake from AUM. AUM also has the capacity to produce 1,850 mt/d of anhydrous ammonia; however, most of that goes into UAN production.

The plant is expected to take three years to build and use some 2,500-3,500 workers during this process, with some 450 permanent jobs created when the plant is online.

The government said it went out for bids on the plant in August 2010, inviting seven companies that had previously expressed an interest to submit bids. Those included, along with MHTL, Yara Trinidad Ltd., PCS Nitrogen Ltd., Point Lisas Nitrogen Ltd., Union Estate Fertiliser Ltd., More Ammonia and Energy Allied International Trinidad Development Co. Of these, the government said three came back with proposals, MHTL, Yara, and Energy Allied.

International Raw Materials Ltd. (IRM) is in the process of moving out of the Port of Sacramento, where it has stored fluid grade ammonium sulfate for the last two years. The company leased a 4,000-5,000 st storage bin at that location.

An IRM source told Green Markets the move was prompted by the Sacramento Port Authority’s decision to cut back on the hours of operation at the port. “They didn’t have the business there to provide labor on a regular basis,” he said.

IRM stressed that it is not exiting the ammonium sulfate market in California, and will continue to store regular and fluid grade ammonium sulfate at its Chico warehouse, which is less than 100 miles from Sacramento. IRM also leases a 45,000 st terminal for UAN storage at the Port of Stockton (GM Oct. 5, 2009).

Headquartered in Philadelphia, IRM has been in business for more than 30 years, marketing liquid and dry fertilizer products throughout the western U.S. and western Canada. According to its Web site, IRM has distribution assets in key strategic locations around the world, and the company sources its products from a variety of producers, including ammonium sulfate products from Canadian mining companies Teck Resources Ltd. and Sherritt International Corp., and UAN-32 from Dyno Nobel and CF Industries.

In addition to its Chico and Stockton locations, IRM also has California terminals at Modesto and Edison. The company has some 17 warehouse locations in the Pacific Northwest, along with seven throughout Western Canada.

Other ammonium sulfate wholesale suppliers in the California market include Yara North America Inc., the J.R. Simplot Co., and Agrium Inc.