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Management Briefs – September 13, 2010

Management Briefs

Viterra Inc. on Sept. 9 said it is initiating a change to its legal services function in recognition of its global market position. As a result, Ray Dean, senior vice president, general counsel/corporate secretary, will step down, effective immediately, to pursue other interests. Viterra will undertake a global search for a new leader.

In addition, Viterra will formally integrate its financial products group within Agri-Products under the leadership of Doug Wonnacott, Agri-Products senior vice president. Financial products will become an integrated product line within the company’s service offering to Western Canadian grain and livestock producers, complementing its portfolio of seed, fertilizer, crop protection products, equipment, feed, and forage product offerings. This integration will result in the elimination of the senior vice president of financial products position previously held by George Prosk.

“Over the past several months, we as a management team have been challenging ourselves and our teams to enhance our model of operational excellence based on our long-standing principles of efficiency, integration, growth, and value creation. These changes support those principles. I would like to thank Mr. Prosk and Mr. Dean for their important contributions to Viterra over the years and wish them well as they pursue their next career opportunity,” said Mayo Schmidt, Viterra president and CEO.

CF Industries Holdings Inc. announced that Anthony Nocchiero, senior vice president and chief financial officer, will retire from the company as of Sept. 20, 2010. “Tony Nocchiero has made very significant contributions to CF Industries during his tenure as CFO, particularly with respect to the acquisition of Terra Industries, the related major financing transactions, and the subsequent integration of the two companies,” said Stephen Wilson, CF chairman and CEO. “Tony intends to spend more time with his family and focus his professional energy on opportunities for board service. I appreciate his dedication to CF Industries, and we all wish him and his family the best in the coming years.” CF has initiated a search that will consider both internal and external candidates for the CFO position. Wilson, who served as CF’s CFO from 1991 to 2003, commented further that, “The integration with Terra is proceeding very well, and business prospects for the fall and next spring are excellent. We expect our strong industry position to help us retain a highly qualified individual to succeed Tony.”

Yoel Nitzani joined Haifa Chemicals as commercial manager in the marketing and sales department. He will be responsible for the management of sales for the Haifa group and will directly supervise the sales offices in Southern Europe, Latin America, and Africa. He will report to the vice president of marketing and sales, and is a member of the Haifa broadened management team. Nitzani has several years of specialty fertilizer experience. During the past 15 years, he has served as general manager of Gat Fertilquidos (a liquid fertilizer company in Southern Spain) and Impronta (specialty fertilizers in Italy), and managing director of FCPCerea (Fertilizer Co. of Northern Italy). He holds a Master’s degree in soil science and an MBA.

The Fertilizer Institute has appointed Lara Beal Moody to the new position of director of stewardship programs. Prior to joining TFI, Moody served as the program manager for the Agricultural Waste Management Laboratory at Iowa State University (ISU). In her position with TFI, Moody will be responsible for developing and directing the Institute’s stakeholder outreach programs to promote nutrient stewardship at the field level. Specifically, she will promote the 4R Nutrient Stewardship System, which promotes the use of the right nutrient source at the right rate, at the right time, and in the right place.

At ISU, Moody managed a 25-member team that prepared information for research reports, journals, conferences, newsletters, and extension media; presented before local, regional, national, and international meetings; and coordinated and managed educational meetings, field days, and conferences for industry stakeholders while interacting with U.S. Department of Agriculture and U.S. Environmental Protection Agency personnel, as well as representatives of state agencies and commodity group leaders. Moody is a registered professional engineer, having received a BS in agricultural engineering and an MS in biosystems engineering from the University of Tennessee.

Market Watch

Ammonia, Ammonium Nitrate, Ammonium Sulfate, Asia, Black Sea, California, Central Florida, China, Correction, Eastern Cornbelt, India, Market Watch, Middle East, Nitrogen Solutions, Pacific N.W., Phosphate, Potash, Sri Lanka, Sulfur, Tampa, U.S. Exports, U.S. Gulf, Urea, Vancouver, Western Canada, Western Cornbelt

AMMONIA

U.S. Gulf/Tampa: The market remained quiet last week, with no new business reported.

Eastern Cornbelt: The Eastern Cornbelt ammonia market firmed to $560-$580/st FOB regional terminals for prompt or spring tons. Sources quoted dealer pricing firmly at the $575/st level FOB spot Illinois locations for confirmed sales last week.

Western Cornbelt: The ammonia market had reportedly inched up to $560-$580/st FOB regional terminals for very limited prompt tons, with several sources saying they expect numbers in the $600s/st FOB in the near term. A Missouri source quoted delivered ammonia at the $580/st level last week, which he said netted back to $510/st FOB Oklahoma production points.

California: Anhydrous ammonia was unchanged at $520-$525/st truck-DEL in California, with aqua ammonia pricing unchanged at $142/st FOB.

Pacific Northwest: Delivered ammonia remained in the $530-$555/st range in the Pacific Northwest, depending on location.

Western Canada: Anhydrous ammonia pricing remained at $612-$656/mt DEL in Western Canada, with the low in Manitoba and the higher numbers in Alberta.

Black Sea: Ukrainian producers are all up and running, say Asian sources. Even with the increased supply, sources say the asking price keeps moving up.

The price range between what buyers are willing to pay and producers accept is narrowing. Just two weeks ago, the spread was about $15/mt. Now, it is down to $10/mt.

While no one is saying the asking price of $390/mt FOB has been reached, sources say the only material available is above $380/mt FOB.

Sources say that some deals at $400/mt FOB and more were concluded, but that the quantities were very small and usually used to top off other larger and cheaper deals. Few are willing to accept a general price range based on these smaller sales.

One trader did note that it would be unfair to at least not mention that these higher-priced deals did take place.

For now, however, the price range most can agree on is $380-$390/mt FOB.

Middle East: Sales out of Iran are pushing the price up better than deals from Arab producers. At the same time, the most recent tender showed a softening in the regional market.

Mitsui bought a large cargo from Iran at $370/mt FOB. This came on the heels of Transammonia settling with FACT/India at $372/mt CFR for an estimated netback of $342-$345/mt FOB.

Traders were perplexed at the Trammo price. The offers from Arab Gulf producers were at least $40/mt higher. Sources said the producers’ offers were more indicative of where the market was going.

The Iranian sale adds fuel to the sentiment that the price should be closer to $400/mt FOB than somewhere in the mid-$300s/mt FOB.

Besides strong demand, sources say the continued shutdown of the Pardis I plant in Iran is adding to higher prices.

The plant was closed last month after an explosion disrupted the natural gas supply line. At the time, the company said repairs would be done quickly and the plant would be back online soon. Now, say sources, the plant is slated to be down for another month.

Ironically, just a few months ago the Arab producers were complaining that the Iranians were undercutting their efforts to move up the price. Now, with the only public deal from an Arab source showing a lower price, it is the Iranians leading the way to higher prices.

One Asian trader said that the Trammo deal to FACT took away the last of the low-cost ammonia from the area. Others were not so sure.

A sale of 5,000 mt to Gresik/Indonesia by Trammo at $410/mt CFR has an estimated netback of $360-$370/mt FOB. The deal comes on the heels of a 10,000 mt deal at $400/mt CFR – with a netback of about $350/mt FOB.

These deals came at or just after the sale to FACT. Sources say Trammo was clearing out some positions in the early sales.

Reportedly, the 15,000 mt to Gresik will be loaded at the same time as the cargo to FACT.

Arab producers, naturally, disagree, and say the high end needs to be closer to $400/mt FOB and that the FACT numbers should be discounted completely.

Despite what the producers are asking for, sources say nothing has been done above the $370/mt FOB level yet. All that has happened is that the low end of the price range has moved up to $360/mt FOB.

Asia: Transammonia sold a cargo of 5,000 mt to Gresik/Indonesia for $410/mt CFR. This is a $10/mt increase from a deal settled a couple of weeks ago at $400/mt CFR.

The netback on the material is put at $370/mt FOB, or at par with the most recent Iranian deal with Mitsui.

In total, Trammo is slated to deliver 15,000 mt to Gresik in the next couple of weeks. Sources say Gresik will continue to look for tons to supplement the material it gets from Kaltim.

Only occasionally will Gresik be able to get material from other Indonesian producers. The joint ventures run by Mitsui and Mitsubishi are exclusively for export and cannot help Gresik. Sources say occasionally PIM or Pusri will have a cargo for sale, but not on a regular basis.

The Gresik demand is estimated at twice what local suppliers can offer. That means, said one trader, that a lot of people will be watching the sales to Gresik for additional clues about where the market will be moving.

For now, the only direction for prices seems to be up.

Demand throughout the region remains strong.

Industrial buyers from South Korea and Taiwan continue to ask suppliers not only for full cargoes, but the “plus 10 percent” portion of their contracts. Suppliers are said to be hard pressed to fulfill those wishes.

India: All DAP producers and industrial ammonia buyers appear to be running at top form, say sources. Nothing seems to be standing in the way of increased demand for ammonia imports.

UREA

U.S.Gulf: Urea barges shot up last week, with most saying
the week began at $315-$320/st FOB and then moved up to
$330-$335/st or higher.

Sources listed several reasons for the higher prices – river closings in mid-October, higher international prices, and higher wheat and grain prices. However, others said when it all came down to it, it may have simply been supply and demand. Buyers came forward and there were not that many floating barges left on the river. Sources add, however, that a good lineup of vessels is due into NOLA in late September and early October. Others noted that urea has been in demand because it has continued to be a better value per unit of nitrogen compared to ammonia and UAN.

New prill trades were called $320-$325/st FOB.

Eastern Cornbelt: Granular urea pricing had firmed to $350-$360/st FOB in the region. One supplier was referencing a solid $360/st FOB for cash tons in Illinois and Ohio, with forward contract urea in the $360-$370/st range for October through December.

Western Cornbelt: Granular urea had reportedly firmed to $355-$360/st FOB river points, with Iowa sources quoting inland warehouses in the $360-$375/st FOB range last week. One supplier was referencing cash market tons FOB St. Louis at the $360/st FOB level as of Sept. 9, with forward contract tons at $360-$370/st FOB for October through December.

California: Granular urea was steady at $385-$395/st FOB in California.

Pacific Northwest: Granular urea pricing had reportedly firmed to $360-$380/st FOB and $375-$400/st DEL in the region.

Western Canada: Urea pricing was steady at $436-$441/mt DEL in Manitoba and Saskatchewan, with Alberta pricing quoted in the $446-$461/mt DEL range.

India: Once again, eyes are turning to India for a way out of a quiet market. Sources in Asia say an Indian buyer is expected to step up and call a tender soon. One trader suggested the call may come as early as the TFI World Conference gathering this week. If that happens, he said, at least the participants will have something other than the rising price of ammonia to talk about.

Right now, the Indian government seems to be evaluating the urea stockpiles. Estimates of how much urea is in warehouses and the supply pipeline range from none to enough for a couple of months.

As always, politics plays as large a role in import orders as the actual reserves on hand do.

Media reports say farmers in some areas are complaining to their local government leaders that the local stockpiles are insufficient for the rest of the season. These politicians, in turn, are complaining to the national government.

So far this year the importing bodies have been successful in keeping the price below the $310/mt CFR target set by the government. The subsidy plan in place will only allow subsidy payments for urea that costs $310/mt CFR or less. Anything above that level is unsubsidized, leaving the holder of the material to absorb the difference between the imported cost and the lower maximum level farmers can be charged.

The current subsidy plan is based on the nutrient content instead of specific fertilizer. For example, the subsidy on urea is based on its N content, not the fact that it is urea.

Indian media now report that the government is looking to revamp the subsidy plan beginning in the new fiscal year that starts in March 2011.

The arrangement will take domestic urea out of the subsidy plan.

Currently all urea – imported and domestic – is included in the Nutrient Based Subsidy (NBS) plan. Now, an official from the Fertilizer Department said domestic urea will be provided subsidies separate from the NBS.

One media report said the urea industry is upset with the government over delays in regulations that would have allowed private importation of urea.

The suggested removal of domestic urea from the NBS is now confusing even more people in the industry as to how much will be subsidized, and how.

Black Sea: Once again, Fedcominvest is reportedly buying up cargoes as soon as tonnage is made available.

Sources say chances are Fedcom is moving to either cover deals already made with Latin American buyers, or to position itself as the main holder of Yuzhnyy urea once these same buyers come knocking on the door.

Sources say producers keep asking $290/mt FOB, and there are rumors that $290/mt FOB has been breached. One Asian trader said, however, that the higher-priced tons coming out of Yuzhnyy are more likely to be top-off tons rather than full cargoes.

Yet no one can deny that inquiries are coming in fast and strong from areas around the globe.

Rising prices in the Middle East and China mean higher pricing ideas from Yuzhnyy, said one trader.

For now, sources say the deals above $290/mt FOB do not reflect the whole market. Sources are comfortable calling the market $285-$290/mt FOB.

Middle East: Producers see no reason to lower their pricing expectations.

Even though none of the companies running tenders in India gave awards to Middle East producers, tons from the area are playing a dominant role in the Indian urea industry.

Analysis from Indian sources says 62 percent of the tons entering India in July came from Oman.

This is not surprising given the awards issued to Transammonia over the summer. Trammo seems to be supplying cargoes from Oman, with whom it has a long-term selling agreement.

Other tons from the Arab Gulf are not coming from Arab producers, but rather Iran.

Oman and Iran were willing to offer prices to Indian buyers that allowed the buyers to stay under the $310/mt CFR limit set by the Indian government. Meanwhile, the Arab producers were pushing prices into the mid $300s/mt FOB.

The last Indian tender had Arab offers at $315-$318/mt FOB. Producers now say the price should be closer to $370/mt FOB.

With prices that high, the Indian government has to keep turning away from the Middle East suppliers.

Egypt concluded a cargo late last week at $350/mt FOB. Sources speculate the material is going to Europe.

Sources say nailing down the producers as to their reserves is difficult. Industry watchers do agree, however, that there are a lot of operating contracts covering most of the Arab production.

The Egyptian business provides a good indicator of the upper end of the market. It can often get a better netback on its tons from customers in Europe and northern Africa.

The lower end of the Middle East range has to come from the offers made in the last Indian tender. One trader said even rounding up to $320/mt FOB still creates an unusually large gap between the Arab Gulf and Egypt.

The regional price range is now pegged at $320-$350/mt FOB.

Correction: The year-ago price for Caribbean granular urea on page 4 of the issue dated Sept. 6, 2010, should have read $259/mt FOB.

China: Sources report the market in China is moving ever upward. Late last week, sources confirmed prills selling at $295/mt FOB and granular at $330/mt FOB. The price rise comes as more Chinese tons are being offered in international tenders.

The first indication of how many excess tons were available came in the IPL tender that gave almost all its awards to companies offering Chinese material. The just-closed Sri Lankan tender also seems to be dominated by Chinese product.

The tons that leave port after Sept. 15 will either have to have been sitting in a bonded warehouse or be part of a larger order for a nominated vessel to escape the higher export duty.

From Sept. 16 through Oct. 15, the export duty on urea will be 110 percent. Beginning Oct. 16, the rate drops back to 7 percent.

Sri Lanka: An agriculture ministry tender for two cargoes of 12,000 mt of bagged urea closed Sept. 9.

Sources said all the offered tons are from China, with prices indicative of the current Chinese market.

Validity for the tender was until Sept. 17. Some of the offering companies, however, picked quicker dates for the validity of their offers. For example, the validity of Valency’s offer is Sept. 17. Transammonia’s, however, expires a day earlier.

Sri Lanka Agriculture Ministry Urea Tender
US$/mt delivered to port US$/mt CIF delivered to warehouse
Company FOB CFR 180 Days 270 Days 360 Days Sight 180 Days 270 Days Notes
Valency 303.00 338.00 344.00 349.99 One lot
Transammonia 370.00 Two lots
Emirates Trade 369.97 376.97 400.57 407.97 414.27 Two lots
Incitec Pivot 379.00 Two lots
Swiss Singapore 359.20 374.20 379.20 386.20
369.10 384.10 389.10 396.10
Ameropa 345.00 382.21 393.19
350.00 387.21 397.09
Samsung 380.00 399.99 408.50 Two lots
Mid Gulf 390.00 400.00 412.00 452.00 Two lots

NITROGEN SOLUTIONS

U.S. Gulf: New trades were hard to find. Most were putting the market at $235-$240/st FOB ($7.34-$7.50/unit), with others saying the next sale might be in the $260-$270/st FOB range.

Eastern Cornbelt: UAN-32 had reportedly moved up to $275-$285/st ($8.59-$8.91/unit) FOB regional terminals, depending on location. One supplier was referencing forward contract tons at $8.95-$9.15/unit FOB Illinois and Indiana terminals for October through February.

Western Cornbelt: The UAN-32 market in the Western Cornbelt was up to $270-$275/st ($8.44-$8.59/unit) FOB spot river locations for limited prompt tons, with new dealer reference levels as high as $295/st ($9.22/unit) FOB out of some river terminals in Missouri. An Iowa source quoted spring prepay at the $285/st ($8.91/unit) FOB level last week.

California: UAN-32 remained at $270-$285/st ($8.44-$8.91/unit) FOB California terminals to the dealer, with the low from Yara FOB Stockton. Company sources said an increase is likely in the near term. Simplot was referenced at the $290/st ($9.06/unit) level FOB Helm and El Centro, and $285/st ($8.91/unit) FOB Stockton. Aug. 13 reference prices from Agrium included $283/st ($8.84/unit) FOB Sacramento, $305/st ($9.53/unit) truck-DEL in Central California, and $310/st ($9.69/unit) truck-DEL in Northern California.

Pacific Northwest: Sources quoted UAN-32 at $290-$295/st ($9.06-$9.22/unit) DEL in the Pacific Northwest region, which was up from last report. One regional supplier moved its postings up on Aug. 25 to $295/st ($9.22/unit) DEL in eastern Oregon and Washington.

Western Canada: UAN-28 remained at $261-$276/mt ($9.32-$9.86/unit) DEL in the region, with the low end in Manitoba and the higher numbers to dealers in Alberta.

AMMONIUM NITRATE

U.S. Gulf: The last done business is referenced at $255-$260/st FOB; however, sources are now saying the next round of business may be closer to $270/st FOB.

Western Cornbelt: Ammonium nitrate remained at $290-$305/st FOB, with the low in Iowa and the upper end in Missouri.

California: No market was reported for ammonium nitrate in California. CAN-17 was unchanged at $242-$255/st FOB in the state.

Pacific Northwest: Ammonium nitrate was pegged at $340-$355/st DEL in the region. No current pricing was reported for CAN-27.

AMMONIUM SULFATE

Eastern Cornbelt: Granular ammonium sulfate was quoted at $190-$200/st FOB in the region.

Western Cornbelt: Granular ammonium sulfate was pegged at $190-$200/st FOB regional terminals.

California: Ammonium sulfate remained at $220-$247/st FOB, with the low for standard and fluid grade and the upper end for granular product in desert locations. Effective Aug. 23, IRM moved its fluid grade ammonium sulfate postings up to $220/st FOB Sacramento and $225/st FOB Chico, Calif.

Pacific Northwest: Granular ammonium sulfate was quoted at $245/st FOB and $250/st DEL in the region, reflecting a sizable increase from last report. Effective Aug. 23, IRM moved its granular and regular grade ammonium sulfate postings up to $245/st FOB and $250/st rail- or truck-DEL in Oregon, Washington, Idaho, and Montana. The company’s fluid grade ammonium sulfate postings moved on that date to $215/st FOB and $220/st rail- or truck-DEL in the region.

Effective Sept. 13, Agrium was slated to firm its ammonium sulfate postings to $245/st FOB in Washington, Idaho, Oregon, Utah, and Nevada, and $250/st DEL in those same states plus Montana and Wyoming.

Western Canada: Granular ammonium sulfate was quoted at $290-$295/mt DEL in the region, with dealer reference prices roughly $5/mt higher.

PHOSPHATES

Central Florida: Inventories in Central Florida simply do not exist, which makes it difficult to do buys and sales.

The big question for the industry was the lost production Mosaic will have after closing its South Fort Meade Mine. The mine produces about 5 million/st of rock a year, which would amount to about 3 million/st of phosphate product a year.

Although the NOLA DAP barge market was on a huge market upswing, mostly from dealers in the Cornbelt, that was not happening in Central Florida. The biggest problem was that no new DAP was being made available for sale on a prompt basis. Mosaic and CF were loading trains only under contract, and had nothing left to sell on the market. If they did, the price would probably move up $10/st FOB or more.

A Central Florida trader said he passed on buying two railcars of DAP, which was selling for $465/st FOB. He had sold the same two railcars earlier at $430/st FOB. Another trader sold two railcars at the current market price of $465/st FOB.

The Central Florida DAP price range became flat at $465/st FOB last week, a change from the previous week’s $465-$473/st FOB. Neither Mosaic nor CF had anything available for prompt delivery this month, and probably will not for October either. CF’s posted prices were $470/st FOB for DAP and $495/st FOB for MAP, a $25/st FOB premium. Mosaic had no posted prices, and was loading railcars for customers under contract and charging the market rate. PCS was making sales at “competitive prices.” Agrifos was asking from $495/st FOB for DAP and $515/st FOB for MAP for truck sales, and railcars were about $5/st FOB less.

U.S. Gulf: Fasten your seatbelts and hang on tight – the NOLA DAP barge market was wild last week. With inventories in short supply and farmers putting phosphate on their fields, dealers were in the market looking for enough to meet their customers’ needs.

By Monday, the prices moved up to $485/st FOB. By Wednesday, prices were moving up rapidly – $490/st FOB, $495/st FOB, and so on. As of last Thursday afternoon, sellers were asking $500/st FOB, which was the highest price since the big run-up two years ago.

Large producers were wondering what the break price would be – when farmers stop buying. If the price gets too high and farmers do stop buying, the market would come to a screeching halt. That has not happened yet.

The domestic market, and especially the NOLA DAP barge market, competes against the export market. Lately, the export market has fallen because the price was too low and the domestic market was too high. Assuming the $500/st FOB happens, the export market would have to rise to at least $550/mt FOB. Last week, the range was set at only $502/mt FOB Tampa, a far cry from the $550/mt FOB needed to be competitive.

For farmers and some dealers, the good news was warehouses were lagging behind on the price rise, because the product still in the bins had been purchased at significantly lower prices. In general, most of the warehouses were still charging between $495/st FOB and $520/st FOB. For those who have the option to purchase in September or October, the decision will be difficult. Once the new product is sold to farmers or dealers, the price will be higher.

Farmers in the Cornbelt and wheat farmers were as concerned about taxes as they were about getting their needs filled. After what appears to be a really good year, they will have more income and they need to spend money to put fertilizer down on the fields now, to help reduce total income and record the fertilizer as a business expense before the end of the year.

Corn prices remained high, along with wheat and soybeans. The Russian ban on wheat exports has hit the market hard. Last week, corn was selling at $4.65/bushel for December 2010 on the futures boards, while wheat was bringing $7.19/bushel for July 2011, and soybeans were $10.37/bushel for November 2010. At those prices farmers simply cannot afford to skimp on fertilizer – and won’t.

Based on sales last week, the NOLA DAP barge price range jumped up from $475/st FOB the previous week to $480-$498/st FOB last week. Asking prices were $500/st FOB late last week and will probably be higher this week, say sources. Activity at the TFI World Conference could firm the market.

Eastern Cornbelt: DAP had reportedly firmed to $515-$525/st FOB, with MAP $10-$15/st higher. One supplier firmed its DAP postings on Sept. 10 to $525/st FOB Peoria, Ill., and $530/st FOB Cincinnati, Ohio. The DAP barge market firmed rapidly last week, with inventories in short supply. Barge prices moved from $480/st FOB the Gulf as the Labor Day weekend began to $498/st FOB by Sept. 9.

10-34-0 remained at $365-$385/st FOB in the region.

Western Cornbelt: Sources said DAP pricing had firmed to $515-$520/st or higher FOB most river points. MAP was hard to find and pricing covered a broad range, from $530/st FOB spot river locations to $550/st FOB inland warehouses in Iowa. One Missouri source put the market in his location at $520/st FOB for DAP and $530/st FOB for MAP, while DAP pricing out of the Catoosa, Okla., market was pegged in the $510-$520/st FOB range.

One supplier reposted DAP on Sept. 10 at $525/st FOB St. Louis, Mo., and $530/st FOB Inola, Okla., and Pine Bend, Minn., with MAP moving to $555/st FOB Inola and Pine Bend. Forward contract prices for DAP at St. Louis ranged from $515-$520/st for October through January.

California: The DAP and MAP markets were quoted at $550-$570/st FOB or DEL, up $30-$35/st from last report, with the low reflecting Sept. 13 postings from Agrium. Simplot was slated to move its postings up to the $570/st FOB or DEL mark on Sept. 10.

16-20-0 was pegged at $349-$369/st FOB, with the upper end reflecting Simplot’s Sept. 10 reference price. The company’s postings in the desert firmed on that date to $399/st FOB.

10-34-0 was pegged at $380-$400/st FOB in the state, also up from last report.

Phosphoric acid pricing as of Sept. 1 firmed to $8.75/unit DEL for both super phosphoric acid (SPA) and merchant grade acid (MGA). Simplot was also referencing MGA at $8.95/unit FOB in the state as of Sept. 1. Agrium’s postings for SPA and MGA moved on Sept. 1 to $875/st rail-DEL in Arizona and California.

Pacific Northwest: Effective Sept. 13, Agrium’s MAP postings will firm to $560/st DEL in Montana; $565/st DEL in southern Idaho, Utah, Nevada, and Oregon’s Malheur County; and $565/st FOB and $570/st DEL in Washington, northern Idaho, and Oregon excluding Malheur County. Those postings were up $15/st from Agrium’s Sept. 3 reference levels, and $40/st higher than Aug. 18 postings. Since July 1, Agrium’s MAP postings have firmed $95/st in the region.

Simplot was slated to move its DAP and MAP postings up $35/st on Sept. 10. New postings include $555/st DEL in Montana, $560/st DEL in Idaho, and $565/st DEL in Washington, Oregon, and Nevada. 16-20-0 postings from the company firmed on Sept. 10 to $366/st DEL, up $20/st from the previous level.

Simplot’s phosphoric acid postings firmed on Sept. 1 to $8.75/unit DEL for both SPA and MGA in the region. Agrium’s SPA and MGA postings firmed as well on that date, to $875/st rail-DEL in Idaho, Montana, Nevada, Oregon, Utah, and Washington.

10-34-0 was quoted at $390-$395/st FOB in the region.

Western Canada: MAP had firmed $35/mt from last report. Sources quoted the dealer market at $657-$662/mt DEL in Manitoba, $662-$672/mt DEL in Saskatchewan, and $667-$692/mt DEL in Alberta, depending on location.

10-34-0 was pegged at $500-$513/mt DEL in the region last week, up $20/mt from last report.

U.S. Export: The export DAP market was not competitive
with the domestic market, and those who had anything available
were sending to the NOLA DAP barges market instead.

One source said he would have to charge or be offered $530/mt FOB, but he probably would not do the deal at that price. To match the NOLA DAP price of $500/st FOB, which was probable this week, an offshore buyer would have to offer about $550/mt FOB to match the domestic price.

A source said a small amount was added to a vessel, but no price was available. None of the major exporters of phosphate made any sales last week. As a result, the range that was set several weeks ago, $502/mt FOB, did not change.

POTASH

Eastern Cornbelt: Sources quoted potash at $410/st FOB regional warehouses on the low end, with most saying brokered sales at the $390/st FOB level had dried up as producers trotted out still higher postings. PCS Sales on Sept. 7 announced new granular potash postings at the $440/st level FOB terminals in Illinois, Indiana, Wisconsin, and Ohio. In the Eastern U.S., PCS’s postings firmed to $447/st FOB Chesapeake, Va., and $450/st FOB Baltimore, Md.

Western Cornbelt: Potash pricing had firmed as well. Sources quoted the dealer market at $410-$417/st FOB, depending on grade, with the upper end reported in Missouri for white granular potash. Effective Sept. 7, PCS Sales upped its granular potash postings to $440/st FOB Ft. Dodge and Waterloo, Iowa, and St. Louis.

California: Potash was quoted in a broad range at $440-$487/st DEL in the state, depending on grade and supplier, with the upper end reflecting new reference levels from PCS Sales after a recent $50/st increase.

Potassium nitrate remained at $929-$996/st FOB, with the low for bulk tons and the upper end for bagged product. Sulfate of potash (SOP) was quoted at $620-$630/st FOB for bulk tons.

Pacific Northwest: Potash postings from one producer firmed $50/st in the region in early September, bringing reference levels to $448-$465/st FOB in the region for new sales. The low was quoted for 60 percent potash in Idaho, and the upper end for 62 percent in Washington. Delivered potash postings were quoted in the $460-$475/st range in the region, with the low for 60 percent and the upper end for 62 percent.

Postings from another potash producer remained at $425-$430/st FOB and $435-$440/st DEL in the region for 60 percent muriate.

Western Canada: Potash pricing was on the move in Western Canada. Effective Sept. 7, dealer prices moved up some $42/mt, with regional warehouses quoted in the $471-$502/mt FOB range, depending on grade and location. Sources tagged the market FOB Saskatchewan mines at $462-$471/mt FOB to Canadian customers, depending on grade and location. The low end of both ranges reflected pricing for 60 percent muriate, with the upper end for 62 percent.

SULFUR

Tampa: Supply and demand remained in balance last week, but supplies were tight. Sources said it was likely another price hike would happen for the fourth quarter, although few were ready to make a guess on how high it would go.

The price for prill was between $120/mt FOB and $125/mt FOB, which certainly beats the Tampa delivered price of $95/lt.

Refinery rates were running about 88.2 percent of capacity, an increase from the 87 percent the previous week, according to the U.S. Department of Energy.

Vancouver: One of the two docks used for handling and shipping sulfur at Vancouver was closed last week. When it reopens, the other will close for two weeks for maintenance. As of late last week, prices had not been affected.

The Week in Fertilizer Stocks

Fertilizer Stocks
Producer Symbol Price Week Ago Year Ago
Agrium AGU 73.22 70.62 50.93
CF Industries CF 94.06 92.71 88.08
Intrepid Potash IPI 24.58 23.02 24.65
Mosaic MOS 58.67 58.47 51.59
PotashCorp POT 149.49 145.95 91.04
Terra Nitrogen TNH 92.14 89.61 100.82
Distribution/Retail
Andersons Inc. ANDE 36.10 36.56 33.93
Deere & Co. DE 67.34 66.53 43.01
Scotts SMG 49.58 47.22 43.13

PotashCorp accuses BHP of highly unethical contact, stresses to customers it’s business as usual for N, P, & K

Featured, News

PotashCorp sent a letter to customers Aug. 30 accusing BHP Billiton of “inappropriate and highly unethical” contact. BHP is trying to buy PotashCorp for $130 per share, a price PotashCorp says is totally inadequate.

In the letter, PotashCorp President Stephen Dowdle said that the company recently learned that Chris Ryder, BHP director of potash marketing, has begun cold calling many of PotashCorp’s customers. “Since the purpose of BHP Billiton’s call clearly was not to solicit your potash order from BHP Billiton’s Jansen project – a multi-year greenfield project which BHP is not even proposing to take to its board of directors for approval until 2011 – we consider this contact to be inappropriate and highly unethical,” said Dowdle. “We can only assume that BHP Billiton’s purpose is to sow seeds of doubt and confusion about the future of PotashCorp by raising questions about our ability to do business across the nutrient spectrum as well as the future location and makeup of our sales organization.

“While we are disappointed that BHP Billiton would attempt to undermine our efforts to serve you, you should know that we remain 100 percent committed to being your partner and your go-to source for your fertilizer needs,” said Dowdle. “Delivering on our commitment to you has always been, and continues to be, our top priority.”

BHP had not returned inquiries at press time.

In related news last week, when asked if Agrium Inc. would be interested in any PotashCorp assets should they be sold after a BHP acquisition, Agrium President and CEO Michael Wilson said the company looks at any N, P, and K assets that might be for sale. Although this comment was hyped in the general media, most any major fertilizer company with access to capital would have said the same thing.

PotashCorp also responded to this news, issuing a statement saying, “BHP Billiton’s offer is wholly inadequate and it would be inappropriate to speculate as to how this process may unfold. We are focused on running the business in order to meet and exceed the needs of our valued potash, phosphate, and nitrogen customers. Delivering on our commitment to customers has always been, and continues to be, our top priority. It is business as usual at PotashCorp.”

Also last week, Sinochem, a Chinese state-owned enterprise, hired HSBC Holdings PLC to advise it on its options regarding PotashCorp, according to The Wall Street Journal. Despite PotashCorp’s assurances that other prospective buyers are out there, BHP says the pool is limited.

Canadian officials continue to closely watch the situation, as any significant change to PotashCorp could impact the amount of royalties received by the Province of Saskatchewan. Lower potash prices would mean lower royalties going into the province’s coffers.

In the meantime, BHP said last week that due to the low amount of business PotashCorp conducts in the European Union, it does not believe any regulatory approval will be necessary there.

While some analysts have targeted a price of $170-$180 per share for PotashCorp shares (GM Aug. 23, p. 1), a Reuters survey of some 4 percent of BHP shareholders indicates their view that $155 a share should be BHP’s top price. Reuters said an earlier survey of PotashCorp shareholders said the deal could happen at $162 a share, with an analyst survey coming in at $157 a share.

Shareholders will obviously be guided by price. However, Sanjay Khanna, writing for The Huffington Post, argues that if they consider reputation, environmental and labor issues, as well as the stability of the potash market, they will disqualify China, saying as a buyer, it is the worst case scenario. Khanna, who is the director of Resilient People, an organization concerned with environmental and climate change issues, also isn’t too thrilled with BHP, saying Vale S.A. would be a better pick. Vale, however, has taken itself out of the running.

Transportation board proposes new committee to focus on railroads and TIH chemicals

Featured, News

The Department of Transportation’s Surface Transportation Board (STB) last week announced that it has established a new committee to provide it with independent advice and policy suggestions on issues related to the common carrier obligation of railroads to transport toxic by inhalation hazard (TIH) chemicals such as anhydrous ammonia and chlorine. Specifically, the STB wants the committee to outline what is a railroad’s reasonable response to a shipper’s request that it transport TIH cargo.

The Toxic by Inhalation Hazard Common Carrier Transportation Advisory Committee (TIHCCTAC) will convene for a two-year period, during which the STB anticipates it will produce a report that will include a recommended policy statement regarding the railroad’s common carrier obligation to transport TIH chemicals. The STB recently posted a notice in the Federal Register seeking comments on the committee structure and nominations for committee members.

The STB said it seeks input from interested parties on a number of issues, including what the appropriate scope of the committee’s mandate should be; how that scope would affect the committee’s operation; how big the committee should be; and how the committee membership should be allocated among various stakeholder groups to achieve balance.

The STB held a number of hearings in 2008 to discuss the extent of the railroad’s common carrier obligation to haul hazardous materials, including TIH products. “A railroad may not refuse to provide service merely because to do so would be inconvenient or unprofitable,” the STB noted. It added, however, that the obligation is “not absolute, and service requests must be reasonable.”

“For many hazardous materials, including TIH, rail is the safest and most efficient mode of transportation,” the STB said in its recent Federal Register notice. “But, according to the railroads, the transportation of these materials subjects them to the potential for extremely high liability in the event of an accident.”

At one of the 2008 hearings, the American Association of Railroads (AAR) suggested that the STB adopt a policy statement that would require a TIH materials shipper to “indemnify and hold harmless the railroad against liability arising from a release of such materials in excess of (1) the maximum amount of insurance that the railroad carries for TIH transport, or (2) $500 million for Class I railroads, whichever is greater; and to provide reasonable assurances in the form of insurance or other means to support such indemnity.”

Other commentators at those hearings, particularly those representing TIH shippers, urged the STB to reject the AAR policy statement, and charged that the railroads were inflating rates to drive TIH shipments off the tracks.

“While the Board views the safe transportation of hazardous materials as crucial to this nation’s economic and national security, and the transportation by rail of hazardous materials as vital to our nation’s industrial production, the Board is an economic regulator, and, as such, seeks to address the economic component of TIH transport,” the Federal Register notice said. “It hopes to facilitate dialogue regarding and resolution of those economic concerns between and among TIH shippers and the railroads.”

The new committee will work toward this end, according to the STB. “The Board believes that an industry-derived solution to the question of what constitutes a reasonable response to a shipper’s request that a railroad transport TIH cargo might be a better and potentially more economically sustainable solution than a Board-imposed solution, though the latter remains a lawful alternative in the absence of industry-wide consensus,” the notice said.

“The TIHCCTAC will be tasked with producing a report and recommendations on how the Board should balance the common carrier obligation to transport this commodity with the risk of catastrophic liability in setting appropriate rail transportation liability terms for TIH cargo,” said the STB. “The TIHCCTAC’s focus and its solution … should revolve around the amount of economic responsibility for liability that railroads can reasonably ask TIH shippers to assume before the carrier will transport TIH cargo.”

The STB proposes that the new committee will meet monthly starting in the final quarter of 2010, and will consist of up to 27 voting members, including its chair, with seven representatives from the Class I and II railroads; three representatives from Class III railroads; five representatives from chlorine shippers; five representatives from anhydrous ammonia shippers; four representatives currently engaged in academia or policy analysis; two representatives with an insurance or underwriting background; and one representative from tank car owners, car lessors, or car manufacturers. In addition, three committee members will be from the STB in a non-voting capacity, and additional members from the Department of Homeland Security and Transportation may be chosen to serve in advisory, nonvoting capacities.

Comments regarding the proposed TIHCCTAC structure and scope must be received by 5 p.m. E.D.T., Friday, Sept. 24, 2010. Nominations for members must be received by 5 p.m. E.D.T., Monday, Oct. 25, 2010. Comments and nominations can be submitted to the STB either via its e-filing format at http://www.stb.dot.gov., or by mail at Surface Transportation Board, Attn: STB Ex Parte No. 698, 395 E Street, S.W., Washington, DC 20423-0001. Mailed responses should include an original and 10 copies.

More information can be obtained by calling Ronald Molteni, Office of the General Counsel, at 202-245-0267.

Commerce revises antidumping duties on Russian urea; opens door for review of antidumping duties on Ukraine AN

News, Urea

The Department of Commerce (DOC) International Trade Administration (ITA) last week reported that it has made changes to its margin calculations for the antidumping duty order imposed on solid urea imports from the Russian Federation. The urea covered by the order was produced by MCC EuroChem and involved a period of review from July 1, 2008, through June 30, 2009.

ITA said its new weighted-average margin on solid urea exported by EuroChem for the period of review is 21.79 percent, rather than the 20.92 percent dumping margin established in its preliminary finding. ITA also reported that it has revised the date of sale for U.S. transactions involving the subject merchandise to the actual date of contract, rather than the date of shipment.

ITA said it made the changes based on case briefs and rebuttal briefs received on June 30 and July 12, 2010, from EuroChem and the Ad Hoc Committee of Domestic Nitrogen Producers (Committee), whose urea-producing members include CF Industries Inc. and PCS Nitrogen. ITA held a public hearing on the case on July 13, 2010.

The DOC published its preliminary results for the case on April 15, 2010 (GM May 10, p. 10), in which it determined that EuroChem had sold solid urea in the U.S. market at less than normal value during the period of review. According to a Federal Register notice, the Committee requested the review on July 31, 2009, and the DOC published a notice on Aug. 25, 2009, saying that it was initiating such a review.

In 2008 (GM May 26, 2008), the DOC awarded EuroChem zero percent weighted-average margins on solid urea imports from the Russian Federation under a “new shipper review.” EuroChem successfully argued at that time that it had never been affiliated with any Russian exporter or producer who exported solid urea to the U.S. during the antidumping duty order period of investigation.

This claim was contested by the Committee, which argued that EuroChem was not eligible for a new-shipper review because its factories existed and produced urea during the period of investigation, and because it was affiliated with entities that were part of the non-market-economy entity that produced and exported subject merchandise during the period of investigation.

The ITA also reported recently that it was accepting requests for an administrative review of antidumping duties imposed on solid agricultural grade ammonium nitrate imports from the Ukraine for a period of review from Sept. 1, 2009, through Aug. 31, 2010. Interested parties must make their request no later than Sept. 30, 2010, and must specify individual producers or exporters and why the DOC should conduct such a review.

Each year during the anniversary month of the publication of past trade actions, interested parties may request DOC review of the previous trade action. September is listed as Ukraine AN’s anniversary month. Ukraine imports currently have a duty of 156.29 percent. Russian product has a duty of 253.9 percent, but only after the first 150,000 mt imported. TFI confirmed that there have been no AN imports from Ukraine or Russia for the 24-months ending in June 2010.

Six copies of the request should be submitted to the Assistant Secretary for Import Administration, International Trade Administration, Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230. The Department also asks parties to serve a copy of their requests to the Office of Antidumping/Countervailing Operations, Attention: Sheila Forbes, in room 3065 of the main Commerce Building. In addition, a copy of each request must be served on every party on the DOC’s service list.

In other news, the U.S. International Trade Commission (ITC) has scheduled an expedited five-year review concerning the antidumping duty order on potassium permanganate – a strong oxidizing agent – from China. The review will determine whether revocation of the antidumping duty order would be likely to lead to continuation or recurrence of material injury to domestic producers of the chemical within a reasonably foreseeable time. Comments from interested parties are due on or before Sept. 8, 2010.

The ITA in August (GM Aug. 2, p. 9) issued a countervailing duty order on certain potassium phosphate salts from China. The order was based on affirmative final determinations made by the DOC and the ITC in June (GM, June 7, p. 10) that China was providing countervailable subsidies to producers and exporters of the subject merchandise during a specific period of investigation, and that this merchandize is likely to be sold in the U.S. at less than fair market value. The investigation determined a subsidy rate of 109.11 percent ad valorem for Chinese producer/exporters, and percentage weighted average margins of 69.58 percent and 95.4 percent.

PHI says full production would have meant positive EBITDA; turnaround occurring ASAP

News

Phosphate Holdings Inc. (PHI) President Robert Jones told analysts Aug. 31 that had the company’s wholly-owned unit, Mississippi Phosphates Corp., been able to produce at planned levels, it would have achieved positive EBITDA of $2.3 million versus a negative EBITDA of $4.6 million. The company released results Aug. 26 (GM Aug. 30, p. 1).

Second-quarter acid production was put at 167,000 tons, or 66 percent, while DAP was 151,000 st, or 75 percent. Although PHI was able to produce some DAP as a result of purchasing about 30,000 tons of acid, the company explained the economics of bought acid at current prices as being at a cost of $126 per ton of DAP, versus only $46 for manufactured acid.

In addition to its acid woes, the company expensed $2.8 million in the second quarter on consulting and legal costs to aggressively address environmental issues raised by the U.S. Environmental Protection Agency and the State of Mississippi (GM June 21, p. 13). PHI said it is having constructive discussions and making meaningful progress on these issues.

While PHI is upbeat that it will make a profit in the third quarter, sulfuric acid plant problems will hang over its head until a planned turnaround for acid and DAP in November. Jones explained that this was the earliest it could take the turnaround due to necessary lead time for equipment and the contractor. Otherwise, it would do it sooner. “It is painful to see them underperforming in this market,” said Jones.

PHI said the second quarter was a “very tough quarter,” and that it absorbed much of the company’s liquidity cushion. As of June 30, 2010, PHI had a cash balance of about $3.1 million and borrowings under its revolving credit agreement of $8.1 million. However, it said it continues to aggressively manage its liquidity and believes that its current operations and available credit facilities should be adequate to meet the company’s financing needs for 2010.

PHI is projecting third-quarter DAP production at 155-165,000 st, which is above second quarter, but below capacity of about 200,000 st/y. It has not projected second-half production.

For the second half, PHI said preliminary results for July were very positive. PHI said the phosphate market is seeing tighter supplies and higher prices. It said the domestic market is currently seeing a $20 premium on DAP over export, and that those with tons are focusing on the domestic market.

James Perkins, vice president of sales and marketing, said market fundamentals show continued strength. He cited several factors, first among them high corn prices – $4.40/bushel for December 2010 and $4.46/bushel for December 2011. Perkins also said a record-setting corn harvest will leave the ground depleted of fertilizer and in need of replenishment, adding that farmers will have plenty of money to spend on fertilizer.

In addition, an early harvest widens the window for fall application.

Also, there are still a large number of tons to be shipped to India during the rest of the year.

On the raw materials side, PHI noted the recent increase in Tampa anhydrous ammonia ?Çô from $380/mt to $425/mt DEL – adding that tight sulfur supplies may lead to those numbers going up in the fourth quarter by $25-$30/lt from the current $95/lt at Tampa.

Asked whether higher DAP prices would soon meet demand destruction, Jones cited high wheat and corn prices, saying as long as those are going up, there will be no demand resistance.

Growmark reports increased income; plant food stages strong comeback

News

Growmark reported net income of $81 million on sales of $6 billion for the year ending Aug. 31, 2010, versus the prior year’s net income of $75 million on sales of $6.1 billion (GM Sept. 7, 2009, p. 15). “Fiscal 2010 was another good year in a series of good years,” said Senior Vice President of Finance Jeff Solberg. “The result of this strong performance is a very strong balance sheet with a sound equity base built on a substantial layer of retained earnings, which minimizes the stock investment required of members, which is supplemented by a prudent level of long-term debt.”

Growmark said the plant food division staged a strong comeback after a relatively weak prior year. Operating gross income was the second highest on record and volumes rebounded significantly from 2009, as prices declined and product became more affordable for farmers.

“The late harvest in 2009 prevented the majority of fall tillage and plant food applications,” said Solberg. “Fortunately, April provided a window of opportunity to complete the extra field work. Our FS cooperatives proved their ability to move massive quantities of product to the field.”

Growmark said the crop protection division has been very strong the last three years, and the outlook is positive. The seed division generated another year of growth in seed corn units, while soybean seed sales units ended the year flat as compared to last year. However, the division has achieved solid profitability and will pay patronage for the fifth year in a row.

Growmark’s retail supply business segment enjoyed another good year, producing $1 billion in sales and $18 million in pretax income.

Growmark’s energy division had a very strong year, with volume increases in all products. Propane volume reached nearly 310 million gallons, an all-time record for the company, due to the wet harvest conditions of 2009.

Growmark’s retail grain business produced $800 million in sales and pretax income of $16 million in 2010. Its facility planning and supply division expanded its scope and offerings in 2010, with heavy demand for bulk seed installation and many new farm and commercial grain dryers. Growmark said grain bin sales and construction continues to be a strong business, along with sales of facility equipment products.

Growmark patronage to members will be an estimated $55 million, down from the prior year’s $62 million.

Simplot agrees to reduce phosphorus releases

News, Phosphate

The J.R. Simplot Co. and the U.S. Environmental Protection Agency (EPA) on Wednesday, Sept. 1, filed a consent decree amendment in U.S. District Court for the District of Idaho, in Boise, legally committing Simplot to a multimillion dollar investment in reducing phosphorus releases into the Portneuf River from its gypsum stack and phosphoric acid production plant near Pocatello, Idaho.

Simplot’s Don phosphate fertilizer complex is the river’s largest source of phosphorus, a nutrient that can cause rampant weed and algae growth during warmer months, robbing the water of life-supporting oxygen needed by fish, insects, and other aquatic life. EPA researchers said 80 percent – or about 1,200 pounds – of the phosphorus entering the river daily downstream of Batiste Road originates near Simplot’s Don Plant.

While the Simplot plant is not located on the Fort Hall Reservation, the Portneuf River flows through the property’s northeast section and north into “The Bottoms,” where most Shoshone-Bannock traditional and ceremonial activities occur, including fishing and the gathering of native plants.

The latest amendment expands a 2002 agreement between Simplot and EPA regarding cleanup actions at the complex, and provides the legal framework for Simplot to implement EPA’s 1998 Record of Decision (ROD) and 2010 Interim ROD Amendment (IRODA) for Simplot’s operable unit of the Eastern Michaud Flats Superfund Site.

The 1998 ROD added phosphoric acid as a contaminant of concern. Metals, arsenic, radionuclides, and other contaminants were previously listed.

The Simplot plant is on the Superfund site encompassing 2,475 acres. The adjacent FMC elemental phosphorus plant that closed in December 2001 and was later demolished was also located there. Both plants were constructed in the 1940s. The FMC property was 1,450 acres, while Simplot’s acreage totals 1,025.

Lori Cohen, deputy director of EPA’s Superfund cleanup office in Seattle, said the work Simplot has agreed to perform under the amendment will significantly reduce phosphorus discharges into the Portneuf River and better protect groundwater.

Many of the actions agreed to in the consent agreement are already being done by Simplot. Details of the consent decree were ironed out earlier this year when Simplot agreed to take additional measures to clean up the site and slow the flow of phosphorus into the river, which has struggled with pollution for decades.

EPA officials said Simplot’s efforts to reduce phosphorus discharges into the Portneuf River are getting results. Researchers said their latest data shows phosphorus concentrations in the river have declined by 50 percent, compared to peak levels recorded in 2006.

While the decline is encouraging, EPA officials caution the new data is an initial glimpse, and far from the long-term data needed to accurately assess efforts to clean up the river. “The reductions are much faster than what we expected to see,” said Kira Lynch, EPA remedial project manager for the site. “We’re hopeful that we’re going to keep seeing dramatic reductions.”

Last summer, Simplot constructed a large decant pond to capture and store process water to block it from penetrating the gypsum stack. Simplot officials estimate the company has spent more than $6 million in the past four years on the project.

Under the amendment, Simplot must:

  • Identify phosphorus in groundwater as a “contaminant of concern”;
  • Characterize all contamination sources at or near the phosphoric acid plant;
  • Control all phosphorus contamination sources to the extent practical;
  • Install a high-density polyethylene (HDPE) liner atop the gypsum stack to minimize process water infiltration through the gyp stack and into ground water; and
  • Continue to develop, operate, and maintain a ground water extraction system to address those areas where arsenic and phosphorus concentrations remain above cleanup standards or levels of concern.

Earlier this year, Simplot began installing the synthetic liner over the top of the massive pile of gypsum blamed as the main source for phosphorus leaking into the groundwater and then the river. The liner will be fitted over the top of the 200-acre waste pile the next four years.

The company’s amended clean-up plan also includes drilling monitoring and extraction wells to reduce the flow of contaminated groundwater, and replacing equipment identified as a risk.