PCS Sales announced lower potash prices on Dec. 12. The company’s postings to U.S. customers FOB Saskatchewan mines moved on that date to $425/st for standard, $430/st for granular, and $437/st for soluble and white granular.

PCS’s warehouse postings for granular potash dropped on Dec. 12 to $470/st FOB in Illinois warehouses at Casey, Colfax, Danville, Marseilles, Seneca, and Springfield; Indiana warehouses at Burns Harbor, Delphi, Indianapolis, Jeffersonville, and Walton; Ohio warehouses at Crestline and Maumee; Iowa warehouses at Fort Dodge and Waterloo; and St. Louis, Mo.

Rumors had been circulating that at least one of the potash producers was planning to publish lower potash prices in mid-December. Midwest sources have been quoting warehouse potash pricing in the $485-$495/st FOB range for several weeks. PCS’s last official warehouse postings, effective July 21, 2012, ranged from $530-$540/st FOB, depending on location.

IPL closed its tender Dec. 8 with about 1.5 million mt offered. The lowest price was $404.45/mt CFR for 100,000 mt from Transglobe. Other offers were in the same neighborhood. An additional 550,000 mt were offered in the $406-$409/mt CFR range.

Sources reported over the weekend that IPL will make its counter-bid to the rest of the companies offering tons early this week. The most likely scenario is that IPL will start with the Transglobe price and then offer small adjustments based on the port of discharge.

The average price in this tender came in at $414/10/mt CFR as compared to the $416/mt CFR average for all the offers in the MMTC tender outside the Swiss Singapore offer of $389.50/mt CFR.

The Swiss Singapore offer left MMTC with the ability to issue an award for only 50,000 mt. The results of the IPL tender could lead to a much larger purchase that gets India closer to fulfilling its urea needs for the current year.

India still needs about 1 million mt to close out the year. If IPL can get several of the offering companies to accept the Transglobe number of $404.45/mt CFR, it will be close to meeting the country’s needs. If IPL does not take 800,000-1 million mt in this round, sources expect to see another tender called soon.

Yara International ASA has entered into an agreement to acquire Bunge’s fertilizer business in Brazil. The proposed transaction is valued at US$750 million, and will be subject to the approval of Brazilian competition authorities (CADE) and other customary approvals. Yara and Bunge have also agreed to enter into a long-term fertilizer supply agreement, enabling Bunge to continue supplying fertilizer to farmers as part of its grain origination activities and creating a framework for logistics and other commercial activities.

"I am pleased to announce this important move in Brazil, building further scale for Yara following previous acquisitions in 2000 and 2006. Brazil is a key growth market where there is significant further potential for acreage and yield increases. Today’s agreement also creates a strong platform for future growth opportunities within the Brazilian fertilizer industry," said Jørgen Ole Haslestad, President and Chief Executive Officer of Yara.

"Our talks with Bunge to reach this agreement have been conducted in a positive and constructive manner, and we look forward to expanding our cooperation with Bunge in our role as a key input supplier to Brazilian agribusiness," said Jørgen Ole Haslestad.

Bunge operates 22 blending units across Brazil, delivering 4.8 million mt of fertilizer products in 2011, with revenues of US$2,648 million and an adjusted EBITDA of US$77 million.

The $750 million enterprise value comprises a net operating capital value of $385 million and other assets valued at $365 million. The operating capital value is subject to post-closing adjustment.
Yara is targeting minimum annual synergies of $25 million within the following main categories, fully realized by 2014: supply chain synergies, comprising scale advantages in raw material sourcing and freight and port operations; enlarged downstream footprint for distribution of premium products; and operational and administrative synergies.
With this agreement, Yara said it reinforces its position as a significant fertilizer company in Brazil, with a well-anchored local commitment combined with global leadership in safe and reliable production and the largest fertilizer trade network globally. This positions Yara as a key enabler for competitive fertilizer supply to Brazil and future fertilizer growth opportunities in the country.

Ohio Valley Resources LLC (OVR), Fairfield, Ill., has selected Spencer County, Ind., as the home for its new $1 billion nitrogen fertilizer plant. The state-of-the-art facility will be located on approximately 150 acres in Spencer County north of Rockport.

In September, OVR announced it was considering the Spencer County site along with a location near Owensboro, Kentucky. Doug Wilson, President/CEO of Ohio Valley Resources, explained that the Spencer County site was chosen based on multiple factors. Foremost among these is the access to two interstate natural gas pipelines afforded by the site. The location also offers convenient rail and highway access, as well as the potential for river access. The welcoming attitude and support offered by the State of Indiana and Spencer County representatives likewise played an important role.

“We considered numerous sites before narrowing our search down to the Spencer County and Owensboro locations,” Wilson explained. “During the last several months, we have met with representatives of both communities and considered the potential pros and cons of our two best options. We greatly appreciate the cooperation of both communities but feel confident we have picked the best possible location for the new plant. We very much look forward to being part of the Spencer County community.”

OVR says its nitrogen fertilizer plant will be the first entirely new facility of its type to be constructed in America by a U.S.-based firm in more than a quarter-century. It will use the latest version of KBR’s Purifier Process and therefore will consume less energy than ammonia plants currently operating in the United States. It will feature state-of-the-art emission-control technologies that comply with current federal and state environmental regulations.

“There is a rapidly growing need for this type of facility,” Wilson said. “By providing a reliable source of emissions-control products to support a cleaner environment, we will play a key role in boosting domestic agricultural production. Best of all, we will rely on American workers using domestic sources of natural gas. We are extremely proud that our new plant will help to stabilize the supply and price of nitrogen fertilizers to serve the Eastern Corn Belt and thereby support the regional agricultural economy.”

The high-tech facility will produce approximately 2,420 tons per day of ammonia and 3,000 tons per day of urea ammonium nitrate (UAN) solution for fertilizer. Some of the ammonia production will serve the local utility markets for NOx control (known as selective catalytic reduction units or SCRs), which reduces emissions in coal-fired power plants and industrial facilities. In addition, the plant will produce 300 tons per day of diesel exhaust fluid (DEF), a urea solution used to reduce emissions in diesel engines.

Approximately 1,200 workers will be needed to construct the plant over a three-year period. Upon its projected completion in 2016, the facility will employ approximately 80 full-time workers.

Migl Feed and Grain, an agricultural supply company located in Hallettsville, Texas, will join the J. R. Simplot Company’s Grower Solutions network. “Our goal at Simplot Grower Solutions is to continue to grow our business by expanding our reach in strategic areas such as the Texas Gulf Coast as we focus on meeting customer needs,” said Dave Dufault, head of Simplot Grower Solutions retail stores. “Migl fits in very well.”

“We felt that Simplot Grower Solutions was the best fit for our community, our employees, and our customers. Their commitment to agriculture is well known throughout the industry,” said Frank Migl, owner of Migl Feed and Grain. They will remain focused on providing customers with a full line of crop nutrients, crop protection, seed, specialty products and agricultural technology.

“For over 75 years, the Simplot Company has played a significant role in various sectors of the global food and agriculture system and this long term commitment continues,” said Garrett Lofto, president of Simplot AgriBusiness. He added, “Migl Feed and Grain fits in very well with our existing Texas operations and we look forward to their employees joining our Simplot team.”

Simplot Grower Solutions has more than 250 crop advisors and more than 90 retail locations.

The J.R. Simplot Co., a privately held agribusiness firm headquartered in Boise, Idaho, has an integrated portfolio that includes phosphate mining, fertilizer manufacturing, farming, ranching, cattle production, food processing, food brands, and other enterprises related to agriculture. Simplot’s major operations are located in the U.S., Canada, Mexico, Australia, New Zealand, and China, with products marketed in more than 40 countries worldwide.

Pinnacle Agriculture Holdings LLC has announced that its subsidiary, Jimmy Sanders Inc. has acquired G&H Seed Co. Inc. and its related company Liq-Quick Fertilizer Co. Inc. Based in Crowley, Louisiana, G&H was founded in 1968 by Raymond and Kitty Hensgens. It now includes seven retail outlets plus a strong wholesale business servicing Texas, Arkansas, Missouri, Mississippi and Louisiana.

"We are excited about G&H Seed," states Kenny Cordell, CEO of Pinnacle. "This acquisition, along with JSI, creates a significant platform to launch Pinnacle and achieve national coverage."

Barry Knight, President of JSI, adds, "G&H will fit ideally with the Sanders’ culture and will help expand our retail footprint into South Louisiana."

Wayne Hensgens, G&H Seed Operations Manager and President of Liq-Quick Fertilizer Co., notes that, "The Pinnacle merger not only allows us to expand our operations but it gave us the best opportunity to keep our management team, staff and philosophy in place. That was essential in our decision because it allows us to continue to deliver the quality of service our customers are accustomed to while embracing the overall Pinnacle strategy, which is quite exciting."

LSB Industries Inc. today announced that its chemical business’ El Dorado, Arkansas facility has signed an agreement with Weatherly Inc. for the licensing, engineering, and procurement of major manufacturing equipment for a new 1,100 ton per day 65 percent strength nitric acid plant. The new plant is expected to be operational by mid-2015.

In addition, the company is currently negotiating a contract for the purchase of a plant to work in conjunction with the new nitric acid plant that further concentrates a portion of the output up to 98.5 percent strength.

The cost of the new nitric acid plant, the nitric acid concentrator plant and supporting facilities, including construction, is anticipated to total approximately $120 million, a significant portion of which is expected to be paid from insurance proceeds resulting from the May 15, 2012 event that damaged the El Dorado facility. The amount of insurance proceeds is not known at this time.

LSB also announced today the recommencement of operations at the El Dorado facility’s sulfuric acid plant. This represents the final phase of repair and production recovery at the facility following the May 15, 2012 event, other than the construction of the aforementioned new nitric acid plant and acid concentrator plant.

“All of the plants at the El Dorado facility are up and running, other than the DSN plant, which is being replaced by the new Weatherly nitric acid plant,” said Jack Golsen, LSB’s board chairman and CEO. “With the addition of a new nitric acid plant and concentrator, we believe that the El Dorado facility will be able to regain its position as a leading merchant marketer of concentrated nitric acid in the United States.”

As part of President Obama’s all-of-the-above energy strategy to promote domestic energy and mineral production, Secretary of the Interior Ken Salazar today issued a new Secretarial Order to facilitate the co-development of oil, natural gas and potash resources within the 500,000-acre Designated Potash Area (DPA) in southeast New Mexico.

“This comprehensive strategy will allow us to move beyond years of disagreement and litigation between the energy and potash industries and provides a balanced approach that will strengthen New Mexico’s economy,” Secretary Salazar said. “I want to thank the members of the Joint Industry Technical Committee for their efforts in working toward a solution to this longstanding issue.”

The final strategy, first released in draft form in July, would provide greater certainty to mineral lessees and allow for increased production in the oil-rich Permian Basin. At the same time, the Order offers more certainty for the orderly development of potash resources that are important to U.S. agriculture, including some deposits that are internationally unique and significant. The Secretarial Order reflects the collaborative work of leaders from the potash and oil and gas industries, as well as feedback from the public. The action supports the Administration’s goal of continuing to increase domestic oil and gas production, which has grown each year the President, has been in office. Domestic oil production last year was higher than any time in nearly a decade and natural gas production is at its highest level ever. Foreign oil imports now account for less than 50 percent of the oil consumed in America – the lowest level since 1995.

The DPA contains significant deposits of both potash – the common name for potassium bearing minerals, primarily used for fertilizer – and oil and gas in New Mexico, most of which is managed by the Bureau of Land Management (BLM). The DPA currently produces 75 percent of the potash mined in the United States and is also home to nearly 800 federal oil and gas leases. Co-development, or the safe and orderly concurrent development of oil, gas, and potash in the DPA, supports regional job creation and will increase the supplies of important energy and fertilizer resources.

“This Secretarial Order protects New Mexico jobs, ensuring the co-development of potash, oil, and gas," said U.S. Senator Jeff Bingaman. “I applaud Secretary Salazar and the potash and oil and gas communities for their coordinated efforts to resolve this issue.”

“I applaud Secretary Salazar, the BLM, and members from the oil, gas and potash industries for coming together on this matter after too many years of unproductive conflict,” said U.S. Senator Tom Udall. “The responsible co-development of these natural resources is key to job creation in our southeast region and the energy and food security of our nation.”

The Secretarial Order calls for the use of emerging technologies associated with horizontal drilling and production of oil and gas to help minimize impacts and surface disruption. The designation of Development Areas where oil and gas wells could be drilled from one or more Drilling Islands will reduce the number of roads, power lines and other facilities that can impact potash resources and the safety of potash miners. These techniques will result in more orderly development and greater recovery of potash and oil and gas resources.

The Secretarial Order also encourages regular, constructive discussion among the industries and the BLM and provides an industry forum to jointly address any concerns that arise in specific situations.

Salazar had met with the Potash/Oil and Gas Joint Industry Technical Committee (JITC) in Carlsbad, New Mexico on January 5, 2012, to support the ongoing dialogue between representatives of these industries, wh