Marion, Ohio-Nachurs Alpine Solutions is marking its 60th year of providing nutrients to American farmers. “Nachurs Alpine was a pioneer in this business and we’re still leading the way in terms of sales, product quality and support,” said George Berg, company CEO and president. Nachurs Alpine represents the company created by the 1998 merger of Nachurs Plant Food Co., founded in 1946, and Alpine Plant Foods. While the company’s primary business is formulating seed-safe starter fertilizer for corn production, it also provides liquid fertilizer solutions for soybeans and many fruit and vegetable crops, as well as liquid chemical products for industrial applications. Headquartered in Marion, Ohio, Nachurs Alpine also operates manufacturing facilities in Corydon, Ind., and Red Oak, Iowa. In Canada, it operates under the name Alpine Plant Food, based in New Hamburg, Ont.
All posts by traceybg@gmail.com
Corn forecast drops in October; soybeans, cotton up
Washington, D.C.-USDA’s National Agricultural Statistics Service on Oct. 12 forecast U.S. corn production at 10.9 billion bushels, down 2 percent from last month and 2005. Citing better-than-expected yields in the Eastern Cornbelt, along with reduced yield potential in the Central and Western Cornbelt due to summer heat and drought, NASS forecast average corn yields at 153.5 bushels/acre, down 1.2 bushels from September, but 5.6 bushels higher than last year and the second highest on record, trailing only 2004. NASS’s soybean production forecast for October came in at 3.19 billion bushels, up 3 percent from the September forecast and up 4 percent from the 2005 crop. If realized, this would be the highest production on record, NASS said, with average yields expected at 42.8 bu/a, up 1 bushel from the September forecast, but down 0.2 bushels from last year’s record high yield. U.S. cotton production was forecast at 20.7 million 480-pound bales, up 2 percent from last month, but down 14 percent from last year’s record high production. Average cotton yields were predicted at 774 pounds/acre, up 12 pounds from last month, but down 57 pounds from last year. Other highlights from the report included sorghum production at 301 million bushels, down 1 percent from last month and down 24 percent from last year; rice production at 192 million cwt, down 1 percent from the September forecast and down 14 percent from last year; sunflower production at 2.11 billion pounds, down 47 percent from 2005, but 3 percent above 2004; peanut production at 3.27 billion pounds, down 33 percent from last year, but up 2 percent from last month; canola production at 1.22 billion pounds, down 23 percent from 2005; dry edible bean production at 23.8 million cwt for 2006, up 2 percent from August, but 13 percent below last year; sugar beet production at 32.9 million tons, 2 percent above the September forecast and 20 percent above last year’s production; and tobacco production at 734 million pounds, down 1 percent from September, but 13 percent above 2005, the first year without quotas. All U.S. tobacco production is expected to be 17 percent below 2004, however, which was the last year tobacco was under the quota system.
Management Briefs
Agrotain International has announced the appointment of Ben Thompson as ag regional sales manager for the Florida region. He will also assist in the development of the company’s industrial business division. Thompson has 25 years of experience in the fertilizer industry, most recently as senior marketing manager – east region for Agriliance LLC. He can be reached at 1-847-431-0127, or via email at bthompson@agrotain.com.
Toepfer International announces the appointment of Todd Dysle as vice president – North American Fertilizers. He was most recently with Helm. He will be located in the company’s office in Tampa, and can be contacted at 813-832-8348; by fax at 813-835-5737; via email at DysleT@acti.de; or at 6101 Port Tampa Drive, P.O. Box 19248, Tampa, Fla. 33686.
CTL Transportation announces that Don Hendricks has joined the company as director of phosphate operations for two of the company’s Florida terminals. He will oversee total management and strategic planning for both the Tampa terminal and the Mulberry terminal, where he will be based. He has 16 years of experience in the transportation industry.
The Western Plant Health Association has elected new board members and officers for 2007. WPHA officers elected included Zoë Henderson of Dow AgroSciences as chairperson; Kent Johnson of Ag Production Co. as vice chairman; Barry Powell of CALAMCO as secretary/treasurer; and Bill Hume of DuPont and Steve Gillette of PotashCorp as executive committee members.
The following were elected for three-year terms on the WPHA board of directors: Neil Budge of Crompton Corp., Bill Hume of DuPont, Chris Simoni of J.R. Simplot Co., Steve Mansfield of H.J. Baker & Bros., Barry Powell of CALAMCO, Jack Wackerman of Haifa NutriTech, Tom Beardsley of Beardsley & Son, Barbara LeVake of Trical, Gordon Miller of Western Farm Service, and Chris Moudry of Basin Fertilizer and Chemical Co.
This year’s Integrity Award went to Alice Inderbitzin of CALAMCO, based in Stockton. The WPHA Outstanding Member award was given to Jay Yost of Independent Agribusiness Professionals, based in Fresno.
Market Watch
AMMONIA
U.S. Gulf/Tampa: The markets were relatively quiet last week, with no new changes to major benchmarks. Sources were noting the increased gas prices, which closed on NYMEX at $7.132/mmBtu on Oct. 19. On the NOLA barge markets, sources surmised that a new trade would likely require a price somewhere within the $280-$290/st FOB range.
Mosaic is still assessing the damage to the Faustina ammonia plant. The phosphates granulation plant is now running at normal rates using ammonia from the company’s storage tank and from the pipeline. There is currently no estimate of when the ammonia plant will come back onstream, but more should be known early the week of Oct. 23. Mosaic said the reactor still needs to be examined for damage for a complete assessment, and there are safety issues as it is a low-oxygen environment.
Eastern Cornbelt: Anhydrous ammonia remained at $340-$350/st FOB regional terminals, with one Ohio source speculating that fall application volumes in his territory will be down considerably from expectations due to frequent rain delays.
Western Cornbelt: An expected increase in corn acreage for 2007 had dealers feeling optimistic about fall movement of ammonia in the region. Applications last week remained limited, however, as dealers wait for soil temperatures to fall below the 50-degree mark at a four-inch depth. Ammonia pricing remained at $325-$345/st FOB regional terminals, with most dealer quotes reported at the $330-$335/st FOB mark or higher. Reference levels ranged from $340-$360/st FOB in the region.
California: Anhydrous ammonia remained at $395-$400/st DEL, with minimal change expected in the near term.
Pacific Northwest: Delivered anhydrous ammonia remained at $335-$345/st in Montana, and roughly $345-$365/st in Washington and Idaho. Forward contract ammonia for November was reportedly being offered at $345/st FOB Washington terminals.
Western Canada: Anhydrous ammonia was pegged at $444-$479/mt DEL in the region as of Oct. 18, down roughly $18/mt from last report.
Black Sea: Prices remained stable. Sources report no spot business last week, and ongoing turnarounds in the area have conspired to keep prices at the $240-$242/mt FOB range. At this time industry watchers are looking for buying trends in the States. With last week’s price not moving in the U.S. Gulf, sources say there is nothing to push the Yuzhnyy price.
Middle East: Industry observers note that there is probably a lot of truth to statements by producers that they are sold out for the rest of the year. Normally, said one source, everyone discounts claims from the producers that the market is tight. This time, however, buyers tend to agree with the sellers on this point. Observers point to the steady business into India as an underlying factor in this strength.
The price remains firmly pegged at $245/mt FOB, largely based on business with FACT/India earlier this month and a cargo picked up by Transammonia at that same price for loading the end of November.
Korea: A major user may be coming back online. Capro Corp. has reached an agreement with its workers to end a strike. The conclusion of the work stoppage means Capro will once again take ammonia. Those purchases, however, will stop again mid-November when the plant goes into a turnaround.
Other buyers in the country are expected to step up the buying window as well. Sources say Dongbu is stepping up its need for ammonia, and Namhae is said to be in talks for a November delivery.
India: Transfert has sold 7,500 mt ex Malaysia to PPL for November shipment. The price is to be decided in line with the latest Indian imports.
UREA
U.S. Gulf: Most sources last week were singing the same song. Granular barges hit bottom at $195/st FOB and bounced – the only question was how high. Major importers were reported to have quickly snapped up barges in the $195-$200/st FOB range, and prices continued to move up as the week progressed. By week’s end, most were calling prompt granular barges as high as $205/st FOB. Others were calling forward barges into November and December $210/st FOB.
Why the rebound? Sources explained that once prices dipped down in the $190s/st FOB, major importers saw an opportunity to enter the market and snap up barges to meet their commitments. This would allow them to supply product with these lower priced tons and divert other imports into other higher-priced markets.
The threat of diverted tons was also listed as one reason for price increases. Buyers could no longer rely on a huge wave of imports coming in, as if there was any way possible, importers would send their cargoes to another destination.
While some insisted that most of the buying was simply traders buying up available tons in order to forego imports, others said that terminals are indeed starting to refill. However, there was quite a bit of disagreement on whether end-users were really that enticed right now. Some claimed buyers were too scared to fill up right now, even less so in the midst of a price spike.
Eastern Cornbelt: Granular urea was commonly quoted at $255-$260/st FOB to dealers, with the low out of Ohio, Illinois, and Mississippi river terminals on a spot basis.
Western Cornbelt: Granular urea remained at $250-$260/st FOB in the region, with the upper end reported by an Iowa source for a recent spot quote. Delivered urea was quoted as low as $250/st in Iowa and Nebraska at mid-month.
California: Granular urea was steady at $310-$320/st FOB and $320-$330/st DEL in the state.
Pacific Northwest: Urea supplies were described as tight in some areas of the region, with reports that several suppliers had pulled out of the market until vessel tons arrive at the end of the month. The market remained at $265-$275/st DEL, with the low for railed tons and the upper end for truck-delivered product. One source said the incoming vessel tonnage will likely be priced at $285/st DEL based on a $265/st FOB terminal basis.
The Montana urea market was quoted at $250-$260/st DEL last week. One supplier was offering forward contract urea for November at $260-$265/st DEL in Montana, $280/st DEL in Washington, Oregon, Idaho, and Utah, and $285/st DEL in Wyoming.
Western Canada: Granular urea was quoted at $325-$345/mt DEL in the region, a $10/mt drop from September pricing.
India: No sooner had the ink dried on the notices that MMTC would buy 880,000 mt from its tender, than the company went back into the market and snagged another 400,000 mt or so. The subsequent purchases – all done at levels equal to the tender prices – came from Middle East producers and traders representing sources around the world.
Besides the 25,000 mt MITCO/Malaysia sold through MTSP in the tender, another 25,000 mt was optioned immediately. Then MMTC and MTSP – its Singapore-based subsidiary – came to an agreement for another 50,000 mt from MITCO, for a total of 100,000 mt of granular from the Southeast Asian country.
Keytrade snared tons from Libya, and Transammonia is loading tons in China.
All in all, said sources, MMTC will be responsible for importing 1.3 million mt of urea by the end of January.
Once the MMTC shipments are done, sources say India will be quiet for a while. Buyers are not expected to be back in the market until March, when the whole process will begin again. Next year, however, sources expect to see more buying on the international market.
Sources report that a number of older urea plants are slated to be shut down, with few replacement facilities coming on line.
One Asian trader, however, noted that new plants coming online will be more energy efficient and productive than the ones closing. Just how much these new plants will replace the production that will be lost with the older plant closings is still up in the air.
What is clear to industry watchers across the globe is that India will take more tons than it did this year and will probably keep increasing its take for the next 4-5 years.
Pakistan: Always a player of interest in the past, TCP will most likely just end up being a footnote in the final deals of 2006. Sources say industry observers have been downgrading Pakistan’s need on a regular basis. Earlier this year the fourth quarter purchase was estimated at 300-400,000 mt. By last week that number has been knocked down to 100-150,000 mt.
Sources expect to see TCP come in early November with a tender announcement. While it is expected to only be looking for prills, sources say Black Sea reserves will be more than adequate to handle all orders without a problem.
Middle East: Producers are now calling the market at $240/mt FOB for both prills and granular. The only problem is that no one is willing to buy at that level. Sources say the real message being sent with that pricing idea is that the order books are full and that if anyone needs something right away, the price is $240/mt FOB.
The tightness in the market is not disputed. Following the MMTC tender, the Indian buyer came back to Qafco and Sabic and bought more tons. Qafco sold a total of 75,000 mt as part of the tender and in subsequent talks. Sabic also secured more tons than what were awarded from the tender.
All told, the order books are said to be full well into December.
The consensus on pricing is the same as it was following the MMTC tender. Prills are pegged at $231/mt FOB and granular at $225-228/mt FOB. Sources point out that even those levels are not workable to other major buyers unless the producers are willing to accept a two-tier pricing system.
Observers note that if the $228/mt FOB number is used, then the price to the United States would be much higher than the Americans are willing to take. Therefore, say Asian traders, the netback has to be less than the netback to India. One trader noted the Middle East producers were ready to push for the higher prices when India came to the market because India needed product and needed it quickly. The producers asked for $225-$228/mt FOB because they figured they could get away with it. And they were proven right.
The efforts to push the price higher had a ripple effect on other business. ASSC/Iran scrapped its tender rather than pay more than it was expecting.
Black Sea: If anyone wants an example of how the urea market has changed, one needs look no further than the price of Black Sea urea. In the past, if more than 2 million mt were snapped up in four months, the Black Sea price would move dramatically upward. Now, however, every time an Indian buyer concludes a tender, the price goes down. The recent MMTC tender and post-tender talks confirmed that trend.
Despite reported business of $210-$213/mt FOB last week for top-off tons, sources say the netback of around $206/mt FOB from the MMTC tender is about the peak in prices for large quantities.
The only problem with shipping that sub-$210/mt FOB material is that the KIP has not yet been lowered. Rumors were circulating that the price had indeed been lowered to $203/mt FOB. Sources reported late last week that while the $203/mt FOB price was recommended and approved at lower levels, the government has yet to make that decision final.
As Green Markets went to press, the KIP remained at $211/mt FOB.
Sources report at least one, and possibly two, ships are waiting for the KIP to be lowered so loading can proceed. If the government delays longer, said one trader, the lineup of expectant ships will grow and add to the congestion and confusion at Yuzhnyy.
The single biggest change, said one source, was India’s willingness to take granular or prills. With that option on the table, suddenly the limited prilled market had to compete with the global glut of granular.
As the price seems to remain centered at $210/mt FOB, buyers from Latin America are said to be foregoing Yuzhnyy for Baltic ports. Reportedly, Brazilian buyers have done well by taking tons from this area.
China: Chinese material is just not moving the way people thought it would. Part of the delay in large shipments heading offshore is the seeming inability of BCIC/Bangladesh to decide how many tons it wants to buy.
Sources report that while many trading houses had made arrangements to take Chinese tons once the export tax was lowered to the current 15 percent, opportunities to actually find a home for the tons have been limited.
Some cargoes are being sent to India under the IPL and MMTC tenders. At least one and possibly two cargoes have been sent to the United States.
Beyond that, there has been little business for exporters.
International traders say the price from China has not been as highly competitive as some had hoped it would be. With the product in the low $220s/mt FOB bagged, producers are just as willing to look at small domestic sales as they are foreign deals.
One trader noted the producers have enough money in their pockets and a strong belief the 2007 domestic season will be strong to stiffen them against efforts to lower their prices.
While some in the industry doubt the producers are really that well off, they do agree that at its current price level, Chinese urea is just barely competitive in the global market.
The conventional wisdom going into the third quarter was that the export duty would be lowered from 30 percent to 15 percent until the beginning of the year. Now, say sources, a multiplicity of options seems to be on the table for next year.
One option is for the export duty to go back to 30 percent. Backers of this idea say it is the most politically and economically sensible move to make. Beijing wants to make sure the country’s farmers not only have enough urea for the spring application season, but that they perceive the government is doing all it can to ensure moderately-priced product is plentiful.
To get to the point that farmers believe their interests are being looked after, the central government discouraged exports by imposing a 30 percent duty on all exported urea. This tax drove up the price so much that Chinese product was not competitive at any level during the prime Chinese domestic application seasons.
Another school of thought is that domestic reserves are sufficiently high and global prices sufficiently low that the 15 percent duty could remain in effect into the first quarter.
And another group seems to be talking about a year-round duty of 20 percent.
Stay tuned.
Bangladesh: Yes they will, and no they won’t. The back and forth on the BCIC tender has many traders just throwing up their arms in bewilderment and disgust. Reports are now circulating that BCIC will scrap its most recent tender even though the country desperately needs material.
Kinder voices say the delay and potential scrapping are due to a possible shift in government following the January parliamentary elections. Less kind sources just say BCIC cannot get its act together enough to accept current pricing levels without upsetting a few well-placed individuals.
The latest report is that Bangladesh is about 600,000 mt short of material and complaints against BCIC are already being heard.
A regular feature of the BCIC urea tenders are offers from “non-traditional” sources who offer material at prices far below the current market. These companies are awarded the tenders and then are unable to fulfill the agreement because they cannot find tons from any supplier at prices low enough to cover the deal. The company defaults on the deal, and then BCIC is forced to add the missing tons to its next tender. The cycle repeats itself regularly.
At the same time, the government has been reluctantly doling out the cash necessary to make purchases once a secure deal is finalized.
So far this semester BCIC has tendered for about 600,000 mt, but has only awarded and set up payments for about 100,000 mt.
BCIC claims it is following government procedures and is required to take the lowest offer. One observer noted that while this argument may be technically true, it is apparent there are people in the BCIC bureaucracy who are afraid to tell the leadership of the company and its political masters that there are times when they must bite the bullet and pay the going rate to “traditional” urea suppliers rather than to companies that have a track record of non-compliance, even if their prices are the lowest.
Production resumed at the Zia Fertilizer Factory of Bangladesh Chemical Industries Corp (BCIC) at Ashuganj in southeastern Bangladesh Oct. 15 after nine days of closure. The factory was inoperative since Oct. 7 after an explosion at the compressor tube of the ammonia plant. The factory can produce 1,600 mt/d of urea.
NITROGEN SOLUTIONS
U.S. Gulf: Like urea, sources report that UAN barges have hit bottom and bounced. However, there was more of a disagreement as to where the range was last week. While some were calling product in the high $140s/st FOB late in the week, others said they started the week in the low $140s/st FOB, putting the overall range somewhere between $141-$148/st FOB. Sellers were reportedly quoting $150/st FOB by the end of the week, and sources reported that CF had raised its price to $155/st FOB.
Eastern Cornbelt: UAN-28 was unchanged at $160-$168/st ($5.71-$6.00/unit) FOB regional terminals. An Indiana source quoted truck-DEL product at $171/st ($6.11/unit), which he said backed up to $163/st ($5.82/unit) FOB the terminal.
Western Cornbelt: UAN-32 remained at $179-$185/st ($5.59-$5.78/unit) FOB most regional terminals to dealers, with reference pricing quoted in a range of $190-$200/st ($5.94-$6.25/unit) FOB range.
California: UAN-32 was unchanged at $205-$215/st ($6.41-$6.72/unit) FOB and $220-$225/st ($6.88-$7.03/unit) DEL in the state.
Pacific Northwest: UAN-32 was quoted in a broad range at $203-$225/st ($6.34-$7.03/unit) DEL in the region, with the low for railed tons on a spot basis and the upper end for truck-delivered product.
Western Canada: UAN-28 pricing moved on Oct. 18 to $207-$220/mt ($7.39-$7.86/unit) DEL in the region, down roughly $2-$6/mt from last report.
Correction: The dates for Oct. 16, 2006 prices and year ago prices were not lined up properly under the Nitrogen Solutions section in the right hand column on P. 4 in the issue dated Oct. 16. As is the normal case, current prices were on the left and year-ago on the right.
AMMONIUM NITRATE
U.S. Gulf: Compared to urea and UAN, AN was stagnant, still holding to the $190-$195/st FOB price range.
Western Cornbelt: Ammonium nitrate was steady at $245-$250/st FOB in the region.
California: No market was reported for ammonium nitrate in the state. CAN-17 remained at $205-$210/st FOB.
Pacific Northwest: Ammonium nitrate remained at $275-$280/st rail-DEL in Idaho and Washington. CAN-17 was unchanged at $215-$220/st DEL.
AMMONIUM SULFATE
Eastern Cornbelt: Granular ammonium sulfate remained at $155-$160/st FOB in the region.
Western Cornbelt: Granular ammonium sulfate was unchanged at $155-$160/st FOB.
California: Regional sources reported a slight drop in ammonium sulfate pricing. The market was now quoted at $170-$180/st FOB or DEL in the region, with the low for standard or coarse and the upper numbers for granular.
Pacific Northwest: Ammonium sulfate remained at $170-$180/st DEL in the region.
Western Canada: Granular ammonium sulfate was down $10/mt from last report, with new pricing quoted at $260/mt DEL in the region.
PHOSPHATE
Central Florida: DAP sales out of Central Florida were on the increase for producers last week, while prices have fallen during the past couple of weeks. Although Central Florida DAP prices have come down during the past few weeks, they were still out of whack with prices on the river system. Normally, Central Florida prices are between $10/st FOB and $14/st FOB lower than the Gulf market, but last week they were still a couple of dollars higher on the low end of the two ranges. A trader said that business in Central Florida will continue to be suppressed unless the Central Florida price is reduced.
Business in the Northeast and Middle Atlantic regions slowed to a trickle out of warehouses last week. However, parts of the Midwest served by rail from Florida still had some life left. Rain in southern Ohio has delayed planting of the wheat crop, which was expected, at least hopefully, to begin this week. Once the wheat has gone in, farmers will begin laying down DAP and potash for the spring corn crop, and that could continue into mid-November. Still, DAP railcars would have to be loaded this week in order to be of use in that area. What traders and producers both hope will happen is dealers will empty their bins and will need to restock for the spring season.
The explosion at Mosaic’s Faustina plant in Louisiana two weeks ago will not have an immediate impact on DAP sales out of Central Florida. The granulation plant was up and running last week, but the ammonia plant was still undergoing inspection to determine the extent of damage and no restart date had been set. For the immediate future, the granulation plant will use ammonia from the storage tank, but if that runs out and the ammonia plant is not back up and running, phosphate production could suffer.
Statistics issued by TFI last week showed a sharp reduction in production in September. One of the reasons was a turnaround conducted that month at Mosaic’s Riverview plant, which was off-line for about two weeks. In addition, the company switched its system to SAP, and the final two days of production from all of its production plants was not included in the September report. That production will be included in the October report. Other producers were also said to have slightly reduced production, based on sulfur consumption.
The Central Florida DAP price range was $218-$219/st FOB, down slightly from $218-$221/st FOB the previous week. Customers who place large orders get the lowest prices, but sources said no discounts were available at the low end of the price range. Mosaic discounts MAP $4/st from the price of DAP, while CF has no price difference. PotashCorp’s Central Florida reference price was still at $245/st FOB. In Texas, Agrifos’ truck prices were $255/st FOB for DAP or MAP.
U.S. Gulf: The higher price of wheat apparently helped spark activity along the river systems last week, and with more farmers turning to wheat, the prices of corn and soybeans were likely to follow suit. Sales for wheat crops were the primary stimuli for those who had increased sales. The best prices for DAP barges were for those in place in the upper river areas, which brought as much as $220/st FOB, but sources said those available barges were virtually gone by the end of last week. Most dealers had filled their bins in early July, and only began running low-to-empty last week. With heavy demand from farmers, they were in a rush to restock while the season was still in swing.
The areas that still had market potential as of last week were the Mississippi River north of Cario, the Illinois and Ohio rivers, and parts of the Arkansas River. Most of the warehouses at Inola and Catoosa ran out of phosphates last week, and most will not receive new supplies until sometime this week. Again, wheat was the biggest motivator for those heavier volume of sales. Sources said that could be an indication of what is to come during the next few weeks in other regions.
Mosaic’s Faustina granulation plant was back up and running last week, but the ammonia plant was still being inspected to determine the extent of the damage from the explosion. The doors to the ammonia plant were damaged in the blast, and a complete assessment was being conducted because of the safety issues related to the low oxygen environment. Meanwhile, the granulation plant was using ammonia from the storage tank and some from the pipeline.
NOLA DAP barges prices appeared to stabilize last week, after having fallen the previous couple of weeks. The gulf’s NOLA DAP barge price range last week was $216-$220/st FOB, compared to $215-$220/st FOB the previous week. The depletion of in-place, upriver barges last week may mean the higher end of this week’s range will be difficult to get this week, but most sales toward the end of last week in other areas had increased to $218/st FOB from the $216/st FOB price paid at the beginning of last week, so next week, the range may be more narrow and, possibly, slightly higher.
Eastern Cornbelt: DAP was quoted in a broad range last week. The low was reported at $253/st FOB Cincinnati, Ohio, while Indiana sources pegged the high end of the range at $271/st FOB inland warehouses for single loads last week. MAP was quoted at $255-$267/st FOB in the region.
TSP was steady at $235-$245/st FOB, with upper numbers inland and the low on the river system. 10-34-0 was unchanged at $250-$260/st FOB in the region.
Western Cornbelt: Several dealers reported some field movement of phosphates and potash at mid-month. Brisk fall demand is expected in most areas, with sources citing rate cutbacks last year and higher corn prices and acreage estimates for 2007. One Iowa source said growers there are planning to increase corn acreage by 10 percent.
DAP and MAP remained at $255-$265/st FOB, with the low on the river and the upper end inland. An Iowa source quoted truck-delivered DAP at the $265-$267/st level last week. TSP out of the warehouse was $235-$245/st FOB, with the low again on the river and the high out of inland shipping points. 10-34-0 was quoted at $250-$255/st FOB in Nebraska and $255-$260/st FOB in Iowa.
California: MAP remained at $315-$320/st FOB warehouse or DEL, with the low for rail and the high for truck-DEL product. DAP was $5/st higher than MAP. 10-34-0 was up slightly to $250-$255/st FOB, and 16-20-0 was $235-$240/st FOB in the state.
Ortho-phosphoric acid was $5.40-$5.50/unit DEL, with super-phosphoric acid at $5.50-$5.60/unit DEL.
Pacific Northwest: DAP was steady at $312-$317/st DEL in the Pacific Northwest, with MAP quoted at $305-$310/st DEL. Montana prices were roughly $5/st less for both products, although new sales were few. 16-20-0 remained at $235-$245/st DEL, and 10-34-0 was pegged at $240-$245/st FOB and $250-$260/st DEL in the region.
Delivered phosphoric acid pricing remained at $5.50-$5.60/unit for super and $5.40-$5.50/unit DEL for merchant grade.
Western Canada: MAP was $380-$415/mt DEL in the region, with the low end of the range down slightly from September pricing.
U.S. Export: PhosChem made a small DAP sale into South America last week of 6,000 mt at a price said to be in the mid-$250/mt FOB range, which was within the previous week’s range. PhosChem was poised to make a sale into Pakistan late last week, and the deal should have been completed last Friday or early this week. The amount and price were not available.
PhosChem was also scheduled to ship two panamax-sized vessels in October and another two in November to China. The contract with the Chinese co-op calls for delivery of an additional 15 vessels before the end of March, which will help to keep producers’ inventories down during those normally slow months.
TFI released its export phosphate report for September last week. That month, India received 386,774 mt of DAP, Japan was a distant second at 37,000 mt, and Argentina was the third largest buyer at 27,150 mt. Total DAP exports for the month amounted to 556,785 mt, which was 33.1 percent less than for the same month a year earlier. For the calendar-year-to-date, India was by far the biggest customer with 1,870,227 mt, followed by China at 690,911 mt, and Mexico was the third biggest buyer at 354,191 mt. The total was 4,592,532 mt, which represented a 16.6 percent decrease for the same period in 2005.
TFI said Canada was the biggest buyer of MAP in September at 75,281 mt, while Argentina took 38,215 mt, and Australia was the third largest customer at 26,512 mt. The total for the month was 208,165 mt, or a 46.4 percent increase over the same month last year. For the calendar-year-to-date, TFI said Canada was the major buyer of MAP from the U.S. at 418,000 mt, Australia was next at 274,859 mt, and Argentina was third at 247,803 mt. Total MAP sales for the period amounted to 1,756,361 mt, a decrease of 22.3 percent compared to the same period in 2005.
The DAP export price range was unchanged last week at $253-$257/mt FOB.
POTASH
Eastern Cornbelt: Potash remained at $195-$200/st FOB regional warehouses, depending on grade and location. Agrium issued another pricing adjustment on Oct. 19; warehouse postings for 60 percent muriate of potash moved on that date to $204/st FOB Rock Island, Ill., $206/st FOB Danville, Ill., and $207/st FOB Dunkirk, Ind., Garrett, Ind., Seymour, Ind., Toledo, Ohio, and Saginaw, Mich. Rail-delivered postings moved on that date to $210/st in Ohio, Wisconsin, and Michigan, and $212/st in Indiana and Illinois.
Western Cornbelt: Potash remained at $193-$198/st FOB regional warehouses. Agrium reposted 60 percent muriate of potash on Oct. 19 at $204/st FOB Fort Madison, Iowa, Dubuque, Iowa, and Kansas City, Mo., and $207/st FOB Shakopee, Minn. Rail-delivered postings from the company moved on that date to $214/st in Iowa, Missouri, and Nebraska, $212/st in southern Minnesota, and $210/st in northern Minnesota.
California: Potash movement on almonds will begin in the near term in the Central Valley. Potash remained at $227-$233/st FOB, and potassium nitrate was unchanged at $485/st FOB for bulk and $540/st FOB for 50-pound bags. Sulfate of potash (SOP) pricing was steady as well at $343-$348/st FOB for granular and $331-$336/st FOB on standard/soluble.
Pacific Northwest: Potash remained at $210-$230/st DEL, depending on grade and location. Oct. 1 postings from Agrium ranged from $230-$242/st DEL in the region, with warehouse postings for coarse potash now at $230-$237/st, depending on location.
Western Canada: Coarse potash remained at $242-$257/mt FOB, with the low at plant sites and the higher end out of regional warehouses. Granular potash was pegged at $245/mt FOB the mine.
Carlsbad, N.M.: On Oct. 12 Intrepid Potash’s West Mine in Carlsbad, N.M. began a 30 day shutdown to perform shaft maintenance, repairs, and upgrades to the production shaft. This outage represents an extension of the budgeted 14-day outage in October. Intrepid has adequate finished red granular product inventory to cover both current orders and forecasted truck sales during the outage. Further, Intrepid has sufficient compactor feed to continue to run its compaction plant and produce product for its many customers during the shut-down. The facility is expected to return to normal production rates on or about Nov. 12, 2006.
SULFUR
Vancouver: Netbacks on sulfur out of Vancouver were actually lower for the third quarter than earlier thought, down to $40.88/mt FOB. Prices were expected to fall even further, perhaps another $13/mt FOB, as ocean freight rates were expected to draw close to $45/mt for the fourth quarter. If so, that price of about $28/mt from Vancouver would represent a two-year low. In addition, rail rates to Vancouver were expected to increase during the first quarter of 2007, in the form of not only higher basic rates, but also an increase in fuel surcharges.
Those decreases in Vancouver will also have a negative impact on railcar shipments from Canada to the U. S., and Canadian sulfur producers will likely lose money on their deals in the U. S. A few years ago when a similar situation developed, the Canadians were unable to export sulfur into the U. S. after they were slapped with dumping charges. However, that was not expected to happen this time. Still, sulfur will probably represent a negative on financial statements.
Tampa: In the U. S., sulfur supplies were said to be in balance last week, but phosphate producers were said to have taken less during September than previously believed, in part due to a turnaround at Mosaic’s Riverview processing plant in Florida.
MARKET NOTES
Pakistan: Four parties participated in the pre-bid meeting held Oct. 18 with the Privatization Commission regarding the sale of 90 percent of Hazara Phosphate Fertilizers Ltd. Those participating included Al-Tuwairqi Group of Companies, Karachi; Chanar Sugar Mills Ltd., Lahore; Regal Food Products Ltd UK facilitators; TN Associates, Islamabad; and Warble (Pvt) Ltd. (Allahdin Group of Companies), Lahore. HPFL produces 90,000 mt/y of granular SSP and 30,000 mt/y of sulfuric acid. The plant was rehabilitated and recommissioned in April 1999. The final bidding date is yet to be announced.
The Week in Fertilizer Stocks
| Company | Symbol | Price | Week Ago | Year Ago |
| Producer | ||||
| Agrium | AGU | 28.77 | 26.79 | 20.15 |
| CF Industries | CF | 18.99 | 19.05 | 12.16 |
| Mosaic | MOS | 17.13 | 17.44 | 13.44 |
| PotashCorp | POT | 113.29 | 107.00 | 81.66 |
| Terra Industries | TRA | 8.94 | 8.70 | 5.14 |
| Terra Nitrogen | TNH | 26.42 | 26.37 | 20.45 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 38.30 | 36.03 | 14.59 |
| Lesco | LSCO | 9.09 | 8.29 | 16.26 |
| Scotts | SMG | 46.15 | 46.00 | 42.57 |
| UAP | UAPH | 23.73 | 23.67 | 18.36 |
SPOT BARGE PRICES
Iowa officials unveil anti-meth additive; product based on Yara-supplied calcium nitrate
Iowa has done the testing, found that its meth-inhibiting additive does the job, and is making it available right away to retailers to combine with anhydrous ammonia for farmers to use in the field. With the hoopla of a campaign rally, high-level state and federal officials, joined by industry representatives at a capitol press conference, declared that the additive – actually the commonly used fertilizer calcium nitrate – has completed a six-year, $1.2 million research effort and has been proven to deter thieves by rendering anhydrous virtually useless in making meth.
“The inhibitor can be obtained as soon as someone orders and receives their shipment,” Dale Woolery, spokesman for the governor’s drug control office, told Green Markets. “Our plan in Iowa is voluntary, and relies on injection at the local/retail level.” Agriculture retailers who participate will receive the formula for injecting calcium nitrate into ammonia, as well as a supply of the same Agribusiness Association of Iowa’s “STOP METH” signs that were displayed on a nurse tank for the press event.
Officials at the Oct. 9 gathering, which included Iowa Gov. Tom Vilsack, Secretary. of Agriculture Patty Judge, Sen. Tom Harkin (D-Iowa), agriculture committee chairman, and Rep. Leonard Boswell (D-Iowa), along with U.S. Drug Enforcement Administration representatives, also put to rest any idea that the additive may not be needed with recent successes restricting pseudoephedrine sales and the growing use of tank locks.
“Despite a 77 percent drop in Iowa’s meth labs, we know meth cooks continue to go to multiple pharmacies to get enough pseudoephedrine to produce the drug,” said Marvin Van Haaften, Iowa’s drug policy coordinator and Director of the Governor’s Office of Drug Control Policy. “There is no silver bullet to totally eliminate meth, but the new inhibitor will help get us closer.”
Industry officials also applauded the announcement as a breakthrough in the fight against methamphetamine. “We are extremely pleased with the results of research efforts by Iowa State in cooperation with federal, state and local law enforcement agencies and industry,” remarked Dave Coppess, Agricultural Retailers Assn. chairman and Heartland Co-op vice president of sales and marketing, who also attended the press conference. President and CEO Jack Eberspacher said ARA was proud to assist in securing federal funding for the research and “intends to continue to work closely with Congress and the Administration in securing grant funding to help the industry cover part of the costs of purchasing the new additive.”
The additive research started at Iowa State University and also involved an independent lab for structural and corrosion testing and field testing in vulnerable locations in the state. “We used three different sites,” reported Woolery, “and in every case theft attempts stopped almost immediately as word got out that it was ‘bad stuff.’ The original test site hasn’t been hit for about three years.” He said recently concluded Dept. of Transportation tests found no additional corrosion or stress cracking. Nurse tanks have already passed the tests, he added, but more structural testing will be done when funding is available in the near future.
These tests have also shown that calcium nitrate, a common greenhouse fertilizer already proven to be non-toxic and safe for food supplies, has no adverse impact on the environment or farm equipment, and when added to anhydrous reduces what meth makers get from methamphetamine to two percent or less. The inhibitor also reduces the purity of the drug.
Yara North America already has a foothold in Iowa as the primary supplier. Yara has supported the Iowa research from the start and is the largest distributor of calcium nitrate in North America, importing about 200,000 tons a year in liquid and dry form from factories in Norway. Yara also owns 50 percent of Merschman Fertilizer LLC, which the Iowa Dept. of Agriculture has identified for stocking the product. Merschman, headquartered at West Point, Iowa, has a storage and blending plant in Fort Madison and other facilities at Burlington and Fulton, Ill. Yara also has liquid calcium nitrate positioned in Wisconsin. According to the Ag Dept.’s John Whipple, “This compound will be merchandised like any other fertilizer material.” Whipple noted that “Price will be FOB at the Merschman or any other distributor location.” Whipple’s staff will also assist retailers needing help on introducing the inhibitor in NH3 tanks.
Jack Gale, Yara North American president, said his company is waiting on guidance from state agriculture and transportation officials, but expects the dealers will have a bigger job getting ready than the suppliers. One of the issues, he added, will be where the liquid will be injected at each dealer location. “We don’t know the scale or how much may be mandated, but we’re ready to build whatever distribution system is required,” Gale suggested.
With approximately 26,000 anhydrous ammonia nurse tanks statewide, applying the inhibitor in Iowa may run between $62,000 and $1.2 million annually. State agriculture officials estimate that it will cost $24 per injection per nurse tank. But officials believe a more realistic approach would involve strategic injections on a seasonal basis in as few as 10 percent of the nurse tanks at a cost of around $120,000. For the time being, Iowa has no plans to spread the word about calcium nitrate nationwide. Dale Woolery said interest has been expressed by officials in New York, Illinois, and Canada, but added that he “cannot speak to anyone’s intent.”
Simplot expects mine expansion despite court decision
A federal district court’s Sept. 20 ruling that reinstated the Clinton administration’s 2001 ban on road construction in national forests should not block the J.R. Simplot Co.’s expansion of the Smoky Canyon Mine near the Idaho/Wyoming border, a Simplot spokesman said.
U.S. District Judge Elizabeth Laporte singled out the Simplot mine’s expansion into the 12,000 acre Sage Creek Roadless Area in overturning the Bush administration’s 2005 petition plan, under which states could develop their own plans for roadless areas and petition the U.S. Forest Service to implement them. By coincidence, Idaho Gov. Jim Risch announced his proposed changes to Forest Service management plans for 9.3 million acres of roadless areas in Idaho’s national forests the same day Laporte made her ruling. The Bureau of Land Management and Forest Service granted Simplot permits for exploratory drilling three years ago, and later upheld that decision following a series of public hearings.
Environmental groups have hailed Laporte’s decision, which they say – if it’s upheld – could halt Simplot’s Smoky Canyon mine expansion in the previously protected Sage Creek area, and block the extraction of more than four million tons of phosphate ore that would be used in fertilizer production at Simplot’s Pocatello processing plant.
Fred Zerza, a Simplot spokesman, disputes that. “Under either the Clinton or Bush roadless rules, we have a legal right to develop the Smoky Canyon property. Our existing right precedes the effective date of either of those rules,” Zerza said, noting the Forest Service and BLM upheld Simplot’s expansion plans despite appeals by environmental groups. “So, the bottom line is none of this as far as the courts’ decisions – and there are several out there and probably several more in the future – is an issue as far as expansion of the Smoky Canyon Mine is concerned. We just don’t anticipate any impact on the current process for Smoky Canyon.”
Simplot expects the mine expansion’s final Environmental Impact Statement will be issued in December or January as scheduled, Zerza said. “This is probably not the last litigation connected with this issue. We think it will be tied up in the courts in the foreseeable future, but again, that will not impact our right to proceed.”
Simplot feels Gov. Risch’s roadless decision was correct and appropriate, based on recommendations of land management officials and a great deal of local input, Zerza said. “So, we certainly concur with that decision. It’s refreshing to have a governor who doesn’t succumb to the demands of the preservationist community.” Risch told the Associated Press that Idaho plans to join other states in appealing Laporte’s decision.
Charles Ross, general manager of Agrium’s Conda phosphate operation near Soda Springs, said the federal court ruling is a “non issue” for Agrium in Caribou County. “Based on the ages of our leases and when they’re done here, I see this will have essentially no effect on us. If they were new leases, it might be different, but the deposit has been identified,” Ross said. Agrium shifted its phosphate mining operations from North Rasmussen Ridge to the Dry Valley slightly more than a year ago. Ross anticipates the Dry Valley mining will continue for another three to four years, when Agrium would return to North Rasmussen Ridge.
Mosaic reports minor explosion at Faustina plant
Plymouth, Minn.-The Mosaic Co. had a minor explosion at its Faustina, La., anhydrous ammonia plant on Wednesday evening, Oct. 11. No injuries resulted from the explosion, which is believed to have occurred in a vessel that contained hydrogen used in the conversion to ammonia. The combustion of hydrogen results in water – therefore, no toxic releases occurred, according to the company. Damage to the Faustina plant is estimated to be minimal, but the company has temporarily shut down its phosphate granulations operations to complete its investigation of the incident. It is not expected that this event will have a material impact on the company’s production operations at the facility.
Florida counties pushing phosphate EIS
Naples, Fla. -Three Florida counties – Charlotte, Lee, and Sarasota – have agreed to put up $500,000 each to attempt to get the U.S. Army Corps of Engineers and the U.S. Environmental Protection Agency to perform a regional environmental impact study on the effects of phosphate mining in the Peace River and Myakka River watersheds. Those counties were also attempting to get two other counties, Manatee and DeSoto, to pledge an equal amount, but DeSoto has said no and Manatee was asking why it was necessary, according to Mosaic spokesman David Townsend. The three counties will also ask the Florida Legislature to help fund the study. The last regional impact study was conducted in 1978, which was around the time the state began requiring phosphate companies to do remediation of mined phosphate lands. Townsend said the industry has significantly changed its methods of mining during that 28 year period. Townsend added that the company does not object to an area-wide environmental impact study, but said it should include all environmental impacts, such as development and agriculture, and not just phosphate mining. The southwestern area of Florida is one of the fastest growing regions in the country, and development in recent years has been extensive. He also said the state Department of Environmental Protection and the Southwest Florida Water Management District were already in the process of conducting a similar study, and the company was in the process of doing the same. Phosphate companies own about 95,000 acres in the area, which has not yet been permitted for mining. Currently, the Corps conducts studies on individual mining permit applications, but not on the entire area. The counties have already spent approximately $12 million fighting mining permits in the region, but Charlotte has spent the most by far.