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N.J. adopts toughest regs in the country on lawn fertilizer

The New Jersey legislature on Monday Dec. 13 voted to establish the nation’s most restrictive controls on lawn fertilizer, mandating product types and when to and when not to fertilize as a means of reducing nutrient runoff into the endangered Barnegat Bay and other waterways. Republican Gov. Chris Christie said earlier he would sign the bill as part of several measures he has ordered to clean up the Bay.

In the works for a year or more, the New Jersey regulations will have a widespread effect on those who produce, sell, and use fertilizer, prescribing what can be used and when, and setting up fines for retailers, consumers, and professional applicators who violate the rules.

Actually, there are no laws in any part of the country to match New Jersey’s only Florida comes close. But that state’s restrictions are fragmented, varying from municipality to municipality. Except for a few provisions, the New Jersey restrictions take effect a year after signing.

The key requirements impose strict limits on nitrogen and require that at least 20 percent of nitrogen in fertilizer be the slow-release type to prevent it from easily washing into waterways. Phosphorus is banned except for specific purposes.

Lawn fertilizing with phosphorus or nitrogen to turf is prohibited before March 1 or after Nov. 15, or at any time when the ground is frozen. Professional applicators must be certified or trained if applying under a certified applicator. The New Jersey Agriculture Experiment Station, along with the Department of Environmental Protection, is directed to develop a public education program that includes nutrient pollution, best management practices for fertilizer use, soil testing, interpretation of label instructions, and proper use and calibration of application equipment.

Press coverage indicated that opposition by fertilizer interests was one of the hang-ups that delayed passage. But one of the biggest, Scotts Miracle-Gro of Marysville, Ohio, said that wasn’t the case. According to spokesman Lance Latham, Scotts overall was not opposed to the bill. “We feel there were a couple of issues that we would have liked to see changed, but overall we support it,” Latham commented. “We’ve been very engaged there and we are always interested in enhancing the environment.” As far as meeting the restrictions on phosphorus and nitrogen content, Latham said Scotts has already changed many of its products to meet new limits nationwide. One of them, he said, is a no-phosphorus fertilizer available across the country.

The New Jersey Retail Management Assn. (NJRMA) told Green Markets its efforts were directed toward a bill that protects the environment as well as business. “We got very close in conversations with sponsors and the environmentalists to an agreement everybody can support,” NJRMA President John Holub said. He said slow-release was one of the issues his group worked on.

The lawn fertilizer legislation was the No. 1 item in Gov. Christie’s plan for restoring health to Barnegat Bay. Other provisions that could affect agriculture include requiring post-construction soil restoration to mitigate soil compaction and reduce nutrient runoff, using state money and other funds to purchase priority sensitive lands in the bay’s watershed, and establishing a special area management plan in conjunction with the Barnegat Bay Partnership to improve coordination among jurisdictions in the Barnegat Bay watershed.

Tiny Minnesota town assesses what happened during ammonia release

The concerns expressed by parents in Randolph, Minn., over evacuating students from school likely were high on the agenda at the action review held last week to go over how the community handled the release of 100 to 200 gallons of anhydrous ammonia Dec. 8 (GM Dec. 13, p. 13) from a delivery operation at a local farm input business.

“During occurrences like this we’re going to get questions and concerns about the overall operations,” David Gisch, Dakota County emergency preparedness coordinator, told Green Markets. Gisch said he hadn’t heard personally from the parents, but reports were that a handful of parents sent e-mails to the school asking why students experienced potential chemical exposure during the process.

“You’re going to have a few upset parents who couldn’t get in touch with the students,” Gisch conceded, saying that the students probably could have been sheltered in place at the school, but that was the decision of the fire department. “It was fortunate that there were no fatalities. Unfortunate that we had 54 transported to hospital, but of those there were no major problems. We learned a valuable lesson and will incorporate these lessons into our planning for any future events.”

“The ammonia was actually coming in through the air intake in the school,” Randolph-Hampton Fire Chief Jim Heiman told the press. “They could smell it inside the school. We made the decision it was probably better to evacuate the school.”

At River Country Co-op, where the release occurred during delivery of 8,000 gallons of anhydrous, Manager Bob Rahman, who was dealing at the same time with a 10-inch snowstorm, explained the release this way: “We have two tanks; one was in repair and the other was intended for the load. There was a valve between the two tanks that was closed and was blocked out and the driver accidentally opened the valve and the ammonia came out the piping.” He estimated that between 100 and 200 gallons were released, but “we’ll probably never know how much it was exactly.”

Rahman denied telling the press that the business had insurance coverage that would pay the costs of the response and hospital expenses for the students. “I don’t know the ins and outs of the insurance if they are going to pay at all.”

Other press reports indicated that the state doesn’t conduct regular inspection of anhydrous ammonia tanks, but a spokesman for the Department of Agriculture said that wasn’t the case. “We are out inspecting these facilities every three to five years,” reported Mike Schommer. “The confusion is about routine inspection as opposed to regular inspections. We might conduct additional inspections as dictated by incidents or significant concerns.”

Transammonia unit to wind down business with Iran

Transammonia AG, Altendorf, Switzerland, issued a statement Dec. 13 announcing the decision of its subsidiary, Trammo Trading AG, that it will not enter into any new contracts with any company in Iran, and that subject to existing contractual obligations, business with Iran will be wound down as soon as possible.

“Transammonia AG is a Swiss company with headquarters in Altendorf, Switzerland. Its Swiss subsidiary, Trammo Trading AG, has from time to time transacted business with Iran. Neither Transammonia AG nor Trammo Trading AG has any employees or investments in Iran,” read the statement.

“Transammonia AG and Trammo Trading AG have always operated in full support of and in full compliance with applicable US, UN, EU, and Swiss laws and regulations.

“Earlier this year, Trammo Trading AG began evaluating its business with Iran in light of the activities of the Iranian government and the resulting changes in the international business climate and in EU, UN, and US sanctions regulations. Trammo Trading AG concluded that it would begin withdrawing from activities with Iran, subject to any existing contractual obligations. The wind down will be completed as early as possible, but no later than the end of the first half of 2011.

“As privately held companies, neither Transammonia AG nor Trammo Trading AG publicly announce their business decisions. The companies are making a public announcement now in order to correct misinformation contained in recent media coverage of this subject.

“In a separate statement issued to CNBC on Nov. 22, 2010, Transammonia, Inc., the parent company of Transammonia AG, confirmed that neither it nor any of its US subsidiaries is involved in or transacting any business with Iran.”

The Transammonia statement came after an episode of CNBC that highlighted the unit’s involvement in trade with Iran. In addition, the group United Against Nuclear Iran (UANI) had called on Transammonia to end its business with Iran. UANI praised Transammonia after it made its Dec. 13 statement. “It is unfortunate that private companies persist in hiding behind foreign subsidiaries to conduct business in Iran,” said Ambassador Mark Wallace, UANI President. “We applaud CNBC for shining a bright spotlight on Transammonia’s business in Iran and we applaud Transammonia’s quick decision to cease that business. Public pressure on companies like Transammonia that do business in Iran for short-term profit will always compel these companies to make the right decision and to end their business in Iran.”

The CNBC episode also shined the light on non-U.S. companies that trade ammonia with Iran, including Mitsui, Swiss Singapore, and Transglobal. It noted that a foreign subsidiary of Honeywell also used to trade with Iran, but has stopped those activities. It also reported that four U.S. companies Koch Industries Inc., CF Industries Holdings Inc., Southern Towing, and Kirby do not.

REMC expects 2011 EBITDA of $60 M; after reviewing offers, Rentech to keep cash cow

Rentech Inc., Los Angeles, expects its nitrogen-producing subsidiary, Rentech Energy Midwest Corp. (REMC) to see EBITDA of at least $60 million for the fiscal year ending Sept. 30, 2011, up from EBITDA of $32.1 million for the year ending Sept. 30, 2010.

“We are pleased that we have moved through recent lows of the fertilizer cycle with results for fiscal year 2010 that were in line with our expectations,” said D. Hunt Ramsbottom, Rentech president and CEO. “Over the last few months, we have witnessed a dramatic improvement in fertilizer margins that raises our expectation for REMC’s EBITDA to be at least $60 million for fiscal 2011.” The company projects at least $50 million in 2011 operating income.

Ramsbottom told analysts Dec. 15 that after reviewing offers for REMC this past fall, he thinks Rentech “will continue to own it.” He said conditions for REMC’s business continue to improve, and the outlook should be good for the foreseeable future. He said the company would evaluate offers from time to time, but would do the best for its shareholders which now appears to be to hold the company and build upon that asset. To date, REMC has acted as a cash cow, with its cash flow being funneled into Rentech’s alternative energy businesses.

Rentech said that more than 50 percent of REMC’s forecasted deliveries for fiscal year 2011 have already been contracted for sale at fixed prices, and the natural gas required to produce that product has been hedged to fix the products on the pre-sold tonnage. Rentech expects the low gas prices and the strength in demand and pricing for fertilizer to continue throughout the year, supporting its higher EBITDA estimates.

Dan Cohrs, Rentech CFO and executive vice president, told analysts that ammonia prices are approaching $700/st and UAN is nearing $340/st in recent sales. He said for delivered tons this year, REMC saw ammonia prices average $375/st.

CF to produce sulfur-enhanced phosphate

Deerfield, Ill.-CF Industries Holdings Inc. said Dec. 15 that it has signed an agreement with Shell Oil Co. to use Shell’s Thiogro process technology to produce a superior sulfur-enhanced phosphate product. CF will implement the new production technology at its Plant City, Fla., facility. Changes to the complex will not require a meaningful capital investment, and the company expects to produce limited quantities of the new product by mid-year 2011. CF plans to market the product in the U.S. through its established channels ?Çô and through Keytrade AG ?Çô in Brazil and other Latin American markets where there is strong demand for fertilizers containing sulfur. CF is the first North American licensee of the process, and the first domestic manufacturer of the product. The product manufactured with this technology will be a sulfur-enhanced MAPS with a nutrient content of 11 percent nitrogen, 40 percent phosphorus, 0 percent potassium, and 12 percent sulfur. The process technology incorporates sulfur within the fertilizer granule, which allows the nutrient to be released over time in a form that is highly usable by plants. CF says benefits over competitive products include lower dust content and better blending and application characteristics. The process also has the unique feature of allowing the manufacturer to control and vary the mix of elemental (slow release) versus sulfate (immediate release) sulfur, resulting in agronomically superior sulfur-sulfate proportions. “There is a growing agronomic need for this kind of product,” said Stephen Wilson, CF president and CEO. “Alternative products, most made in Poland, China, and Russia, have not been available to growers consistently in our target markets. CF Industries identified the need and is now positioning itself to meet it with a high-quality product that is easy to handle. The product’s superior traits also present CF Industries with a higher margin opportunity over competitive MAP products.” Loh Seng Yee, general manager, Shell Thiogro, added, “We are delighted to work with CF Industries to bring this technology to the United States. CF Industries quickly recognized the value this sulfur-enhanced product would bring to their customers, and we are pleased that they will introduce this progressive fertilizer product to U.S. and international markets.”

GSLM employees spread holiday cheer

Ogden, Utah-Holiday volunteers from Great Salt Lake Minerals Corp. hosted a Christmas ice cream party for residents of the George E. Whalen Veterans Home Dec. 15 after delivering a truckload of $11,000 worth of food to the Catholic Community Center Services Joyce Hansen Hall Food Bank earlier and loading holiday food bags for more than 1,000 families. The company also contributed $1,000 each to the Cache County Community food bank in Logan and the Family Connection Center Food Bank in Layton. “GSL Minerals is like Santa. For the third year in a row they have worked with us to ensure that needy families in northern Utah have a wonderful Christmas meal,” said Marcie Valdez, director of the food bank and Northern Utah Community Services. “This donation and the generosity GSL Minerals has shown us all year exemplify Utah’s spirit of giving and community service.”

Honeywell plant expected to restart near-term

Hopewell, Va.-Sources with Honeywell confirmed last week that the company’s Hopewell, Va., facility, which produces caprolactam and ammonium sulfate fertilizer, will “be running in the very near term” after shutting down the week after Thanksgiving with mechanical problems. The company remained noncommittal about the actual start-up date and the issue plaguing the plant, but industry sources reported rumors that Dec. 23 is the target for a restart, and that issues with the facility’s sulfuric acid plant caused the shutdown. The Hopewell facility’s nameplate capacity for its Sulf-N ammonium sulfate fertilizer grades is 1.4 million mt/y. The outage has caused an already tight domestic ammonium sulfate market to tighten further, prompting some price increases from competing producers last week. Effective Dec. 16, Agrium’s granular ammonium sulfate posting firmed to $310/st DEL in North Dakota, Minnesota, and Wisconsin, up $35/st from the Nov. 24 list price. Effective Dec. 16, granular ammonium sulfate postings from DSM Chemicals firmed $30/st to $255/st DEL in Georgia, $260/st DEL in Florida, and $240/st FOB Augusta. Standard pricing from DSM was up also, to $210/st DEL in Florida.

Agrium prices offering of $500 M 30-yr. debentures

Calgary-Agrium Inc. said Dec. 15 that it has agreed to issue and sell $500 million aggregate principal amount of 6.125 percent debentures due Jan. 15, 2041. The debentures, registered under the multi-jurisdictional disclosure system in Canada and the U.S., will only be offered and sold in the U.S. Agrium intends to use the net proceeds from this offering to repay US$125-million aggregate principal amount of its 8.25 percent debentures due February 15, 2011, and a portion of its outstanding borrowings under its revolving credit facilities incurred in connection with the AWB Ltd. acquisition. The debentures will be unsecured and rank equally with Agrium’s existing senior unsecured debt. Agrium’s senior unsecured long-term debt is rated “Baa2” by Moody’s Investors Service, Inc., “BBB” by Standard & Poor’s Rating Services, and “BBB” by DBRS Limited. Agrium expects the new issue to be assigned the same ratings. The joint book-running managers for the offering are BNP Paribas Securities, RBC Capital Markets, and Scotia Capital. On Nov. 12, 2010, Agrium filed an amendment to its short form universal shelf prospectus to increase the maximum amount of securities that may be offered thereunder from $1 billion to $2 billion.

USDA updates ending stocks, price projections

Washington-The USDA’s Dec. 9 World Agricultural Supply and Demand Estimates (WASDE) report said U.S. wheat ending stocks for 2010/11 are projected 10 million bushels higher this month, reflecting lower domestic use. Total exports were unchanged, and the projected marketing-year average price received by producers was narrowed to $5.30-$5.70 per bushel. The report said U.S. feed grain supplies for 2010/11 were virtually unchanged. U.S. corn imports were raised 5 million bushels and U.S. corn ending stocks raised accordingly with record production reported for Canada. The projected marketing-year average price received by U.S. corn producers was unchanged this month at $4.80-$5.60 per bushel. The report said farm prices for barley and oats were both projected slightly lower based on prices received by producers to date. Total U.S. oilseed production for 2010/11 was projected at 101.7 million tons, down slightly, and soybean exports were increased 20 million bushels to 1.59 billion, reflecting record export commitments (shipments plus outstanding sales) through November. With projected crush unchanged, soybean ending stocks for 2010/11 were projected at 165 million bushels, down 20 million from last month. The U.S. season-average soybean price range for 2010/11 was projected at $10.70-$12.20 per bushel, unchanged from last month. The report’s U.S. 2010/11 cotton estimates included slightly lower production and higher domestic mill use, resulting in a decrease of 200,000 bales in ending stocks compared with last month. Production was reduced 150,000 bales, as lower production in Texas was partially offset by an increase in the Southeast. Ending stocks are now forecast at 1.9 million bales, or 10 percent of total use. The forecast average price received by cotton producers of 76-86 cents per pound was up 2 cents on the lower end of the range from last report. No changes were made to the U.S. 2010/11 all rice supply and use projections. The all rice season-average farm price was forecast at $12.00-$13.00 per cwt, down 10 cents on both ends of the range.

TFI weighs in on nutrient trading proposal

Washington-The Fertilizer Institute (TFI) advocates a go-slow approach to nutrient trading programs for farmers, such as the trading market outlined in a study by the University of Maryland’s Center for Integrative Environmental Research (CIER). The study, Multiple Ecosystem Markets in Maryland, suggests that this approach would have a double environmental benefit by reducing fertilizer runoff into the Chesapeake Bay and combating climate change by keeping carbon dioxide out of the atmosphere. The nutrient trading would operate alongside markets that sell carbon dioxide credits. Farmers who reduce pollutants below a set level would earn credits that would be sold to other operators, such as sewage and water treatment plants having difficulty meeting environmental targets. TFI responded that the organization supports science-based nutrient trading programs with an acceptable framework geared to minimizing agriculture impacts. “Such trading programs should have well-defined water quality goals resulting from specific environmental indicators of success,” offered TFI spokeswoman Kathy Mathers. “Nutrient trading schemes that encourage idling existing crop or grazing lands or mandating arbitrary inflexible nutrient inputs and passively assume an environmental benefit would be less attractive to farmers and would not be agronomically or scientifically sound,” Mathers emphasized. Actually, noted CIER Director Matthias Ruth, everybody can and should win from these markets. “This could represent an extra revenue stream for farmers, as well as an incentive to use the best nutrient practices that can help clean up the bay and fight climate change,” Ruth insisted. “Taking these conservation steps costs the farmers money, and at the very least a reimbursement for their investment is well-deserved.” Maryland is one of a handful of states considering whether to create these multiple markets. One key question for policymakers is whether farmers who achieve reductions in watershed pollution while also capturing CO2 should be able to sell credits in both markets and, in effect, get dual payments for single action.