Members of Ostrander Farmers’ Co-op, Ostrander, Minn., have voted to merge with CHS Inc., and combine operations with the CHS Grand Meadow, Minn. business. The group began operations Sept. 10, 2012, with plans to complete the merger in the next 30-60 days.

“We are confident this decision brings expanded opportunities for our members,” said Rick Jahn, president of Ostrander’s board of directors. “Our customers will continue to have the quality products and services they’ve come to expect with the added advantage of strong CHS connections to global supplies and markets.”

“The business opportunity is a strategic move for both companies,” said John McEnroe, executive vice president, CHS Country Operations. “And it aligns well with the CHS commitment to helping our farmer-owners grow their businesses.”

Serving area farmers for more than a century, Ostrander Farmers’ Co-op offers agronomy and feed, as well as grain marketing and handling services at four locations in Minnesota and Iowa. CHS said patrons of Ostrander should expect a smooth transition with a continuity of services as the company moves to operate under the CHS name.

“Our geographies and services match up well, making the combination a plus for both companies with efficiencies and enhanced services,” said Deke Stejskal, general manager at Grand Meadow.

CHS Inc. announced on Sept. 11 that it will serve as the exclusive off-take company for urea fertilizer produced by the Summit Texas Clean Energy Project LLC (TCEP) plant at Penwell, Texas. CHS will also be a minor investor in the project, which is anticipated to begin construction this fall. The TCEP plant is expected to generate up to 700,000 st/y of urea.

Cheryl Schmura, CHS vice president, crop nutrients, said CHS was selected for the contract because of its tight link to local retailers and growers, market strength, and logistical expertise, including rail and truck capabilities to move high tonnage safely and efficiently. Headquartered in St. Paul, Minn., CHS is the nation’s largest farmer-owned cooperative, and is among the largest U.S. importers of agricultural grade urea.

"The ability to source high-quality, domestically produced urea will help enhance and streamline our operations while providing consistent supply to customers throughout the region," said Schmura. "As a farmer-owned cooperative, CHS is committed to increasing value for our owners and customers through partnerships that optimize our supply chain efficiencies and that fit our business aspiration of global commodities expansion.”

The TCEP plant is a “NowGen” Integrated Gasification Combined Cycle facility that will incorporate carbon capture and storage technology in a first-of-its-kind commercial clean coal power plant. Developed by Seattle-based Summit Power Group, the TCEP plant received a $450 million award in 2010 from the U.S. Department of Energy’s Clean Coal Power Initiative program.

The 400 megawatt facility will capture 90 percent of its carbon dioxide, or approximately 3 million tons of CO2 per year, which will be used for enhanced oil recovery in the West Texas Permian Basin. The plant’s location at Penwell is about 15 miles west of Odessa, Texas.

Jimmy Sanders Inc., one of the largest family-owned agricultural input supply and distribution businesses in the Mid-South region, announced on Sept. 11 that it has formed a strategic partnership with Pinnacle Agriculture Holdings LLC and affiliates of Apollo Global Management LLC, a leading global alternative investment manager, to pursue the development of a national agricultural input distribution network.

“We are excited about the ongoing growth potential for Jimmy Sanders and we plan to continue our successful strategy of opportunistically acquiring and developing strategic agricultural distribution assets,” said Mike Sanders, president, CEO, and board chairman of Jimmy Sanders. “My family and I are enthusiastic about this partnership and the ability to further enhance the company’s distribution network while maintaining the culture and grower-focused approach the Jimmy Sanders brand has come to represent over the past six decades.”

In a Sept. 10 letter to Jimmy Sanders employees, Mike Sanders said the business had received “a substantial equity investment” from Apollo, which he referred to as an “investment firm known for successfully partnering with businesses like ours.” No other financial details of the partnership were disclosed, but Sanders said Jimmy Sanders “could not have picked a better partner to help us transition into the next phase of our growth.”

Rumors of a deal between Jimmy Sanders and Pinnacle have been circulating for some time. Pinnacle was formed earlier this year by Apollo, the investment firm that purchased United Agri Products North America in 2003 from ConAgra Foods Inc. for approximately $600 million, and then formed UAP Holding Corp, which it sold to Agrium Inc. in 2007 for $2.65 billion.

Pinnacle is headed by UAP veterans Kenny Cordell and Dean Williams, and the company’s mission, according to its website, is to “create a best-in-class input provider in the U.S.” by acquiring strong retail businesses, attracting world-class talent, and using “key technology to become the American Farmer’s most trusted and efficient source of crop inputs.” The website says Pinnacle hopes to become a top five retail supplier in the U.S. by 2017, with a strong presence in all major agricultural regions in the country.

“We are thrilled to partner with the Jimmy Sanders organization and to work with a world-class team of executives who share our view towards the domestic agricultural landscape,” said Jordan Zaken, a senior partner at Apollo Management. “In partnership with the leadership team at Jimmy Sanders and the team of seasoned industry executives at Pinnacle, we will continue to pursue our strategy of developing a national footprint within the agricultural distribution industry.”

Founded in 1953, Jimmy Sanders is headquartered in Cleveland, Miss., and operates some 78 retail locations in Mississippi, Tennessee, Arkansas, Louisiana, Alabama, Georgia, Kentucky, and Texas. Jimmy Sanders’ operations include seed production and sales, agricultural chemical distribution, bulk handling of fertilizer, and precision agriculture services.

Sanders told employees that they “won’t notice major changes going forward” as a result of the partnership. “We will remain focused on continuing to grow into the leading distribution company across the south,” he said. “Our partners are excited about accelerating this growth and we’ve already discussed a number of high priority capital projects.”

While certain members of the Sanders family will no longer be involved in the business, Mike Sanders told employees that he, Michael Sanders Jr., and Jed Turner “will remained significantly invested in, and involved with, the company going forward.” Barry Knight, execut

In its Sept. 12 Crop Production report, USDA said U.S. corn production is forecast at 10.7 billion bushels, down less than 1 percent from the August forecast and down 13 percent from 2011. This represents the lowest production in the U.S. since 2006.

Based on conditions as of Sept. 1, corn yields are expected to average 122.8 bushels/acre, down 0.6 bushel from the August forecast and 24.4 bushels below the 2011 average. If realized, this will be the lowest average yield since 1995. Corn area harvested for grain is forecast at 87.4 million acres, unchanged from the August forecast but up 4 percent from 2011.

“The Sept. 1 corn objective yield data indicate the lowest number of ears per acre since 2005 for the combined 10 objective yield states (Iowa, Illinois, Indiana, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin),” the report said.

Referring to August weather conditions, USDA said “limited, early-month precipitation in portions of the Corn Belt was beneficial to late-planted fields, but did little to help drought-affected, mature corn.” USDA noted that “producers in some states chose to chop corn for silage or bale it for hay as it would provide better nutrition for livestock given crop conditions this year.”

USDA estimated soybean production at 2.63 billion bushels, down 2 percent from August and down 14 percent from last year. Based on Sept. 1 conditions, soybean yields are expected to average 35.3 bushels/acre, down 0.8 bushel from last month and down 6.2 bushels from last year.

Compared with last month, USDA’s yield forecasts for soybeans are lower or unchanged across the Great Plains and most of the Corn Belt “as lingering drought conditions continued to hamper yield expectations.” Soybean area for harvest in the U.S. is forecast at 74.6 million acres, unchanged from August but up 1 percent from last year.

All cotton production is forecast at 17.1 million 480-pound bales, down 3 percent from last month but up 10 percent from last year. Yield is expected to average 786 pounds/harvested acre, down 4 pounds from last year. Upland cotton production is forecast at 16.5 million 480-pound bales, up 12 percent from 2011. Pima cotton production, forecast at 657,000 bales, is down 23 percent from last year.

Rice production is forecast at 196 million cwt, up 3 percent from August and up 6 percent from last year. USDA said rice planted area is now estimated at 2.70 million acres, up 1 percent from the June estimate and up slightly from last year. Area for harvest is expected to total 2.68 million acres, up 1 percent from June and 2 percent higher than 2011.

Based on conditions as of Sept. 1, the average U.S. rice yield is forecast at a record high 7,334 pounds/acre, up 138 pounds from August and up 267 pounds from last year. Record high rice yields are forecast in Louisiana and Texas.

North Dakota Gov. Jack Dalrymple and leaders of CHS Inc. today announced that the company is taking steps toward construction of a more than $1 billion major nitrogen fertilizer manufacturing plant to be located at Spiritwood, N.D., which would provide the region’s farmers with enhanced supplies of crop nutrients essential to raising corn and other crops.

CHS has selected a site on 200-acres near Spiritwood and, following further due diligence, necessary approvals and a successful engineering study, would move forward with the construction of the plant. By selecting the site, CHS is able to conduct a preliminary front-end engineering and design study, which will then be used to determine feasibility of construction plans for the project, expected to cost between $1.1 billion and $1.4 billion. CHS is investing $10 million in this first feasibility phase.

“This potential for this type of project is great news for our farmers and for the entire state of North Dakota,” Dalrymple said. “The CHS plant will help us further reduce the flaring of natural gas in western North Dakota and it will provide our farmers with a reliable supply of locally produced fertilizers in place of imports from foreign countries. We will continue working to add value to our energy resources and to develop more locally produced agricultural inputs for North Dakota farmers.”

Governor Dalrymple and CHS President and CEO Carl Casale made the announcement during an event at the North Dakota Capitol. They were joined by Woody Barth, president of the North Dakota Farmers Union which has helped facilitate discussions.

“By pursuing this project, CHS would be making a significant, strategic investment that ensures consistent, domestic nitrogen fertilizer supply for our farmer-owners,” Casale said. “Today CHS imports fertilizer products from 19 countries. Developing additional domestic crop nutrients sources closer to our customers is critical to meeting increasing demand, improving our logistical and distribution expertise, and adding value for the farmers who count on us.”

“The ability to deliver a reliable supply of fertilizer products in North Dakota and the region is a win-win for family farmers and our farmer-owned cooperative system,” said Barth. “We are pleased that our organization’s initial market analysis and feasibility study for building a plant of this scope has allowed us to work closely with CHS, leading to today’s announcement.”

Preliminary plans call for construction of a plant to produce 2,200 tons of ammonia daily. It will be distributed as anhydrous ammonia, urea and UAN liquid fertilizer to farm supply retailers and farmers in the Dakotas and parts of Minnesota, Montana and Canada. The proposed North Dakota plant takes advantage of abundant regional natural gas feedstock. It could employ between 100 and 150 people, with a tentative start-up in the second half of 2016.

Casale said CHS is in discussions with Great River Energy and the Jamestown Stutsman Development Corporation (JSDC), who together own the Spiritwood property, to formalize project agreements related to the land and services to be provided by the power generation cooperative and JSDC. CHS will continue working with Governor Dalrymple’s office, the North Dakota Department of Commerce, JDSC, Jamestown city and Stutsman County officials, the North Dakota Farmers Union and Great River Energy to move the project forward. In addition, CHS has contracted with engineering firms CH2M Hill of Houston, Texas, and Kadrmas, Lee & Jackson of Bismarck, N.D., on site planning and related business and construction details.

The Scotts Miracle-Gro Company on Sept. 7 finalized settlement agreements with the U.S. Department of Justice (DOJ) and the U.S. Environmental Protection Agency (EPA) related to certain company products distributed and sold through 2009.

Following a Friday afternoon hearing in U.S. District Court in Columbus, Ohio, ScottsMiracle-Gro Chairman and CEO Jim Hagedorn said the DOJ’s investigation identified conduct that was not consistent with the company’s core values, but ultimately resulted in improvements to the company’s regulatory compliance programs.

"As we reach closure on these issues, it’s important for all of our stakeholders to know that we have learned a lot from these events and that new people and processes have been put in place to prevent them from happening again," Hagedorn said. "Our consumers are at the heart of our business, and I hope they’ll see that our openness, cooperation, and acceptance of responsibility are all a part of our commitment to provide products they can trust and rely upon."

In 2008, the company conducted a voluntary recall of its wild bird food products when it discovered that they had been treated with a pest control product not authorized for use on wild bird food. The company also voluntarily disclosed the matter to the government.

Later that same year, in an unrelated matter, the company recalled several additional lawn and garden products – which were safe to use as directed and did not harm consumers or the environment – after it was discovered by the EPA that a former associate had created fraudulent documentation that allowed them to be sold without proper approval from the agency. The former associate has pleaded guilty to federal crimes related to these activities and awaits sentencing. She has repeatedly acknowledged to law enforcement authorities that she acted alone.

On Friday, U.S. District Judge James L. Graham accepted the company’s plea agreement related to misdemeanor charges associated with product registration issues and wild bird food products. That agreement includes a fine of $4 million, with $500,000 in community service.

"While no one else in the company knew about the illegal activities of one of our associates, the company nonetheless bears the responsibility for her actions, and for that we apologize," Hagedorn said.

Separately, the company entered into a civil administrative agreement and agreed to pay a fine of $6.05 million related to some of the company’s product registration records. While the company stressed that the agreement neither admits nor denies the allegations, it believes concluding the matter is in the best interest of the company, its shareholders and its associates.

"In both the civil and criminal cases we have fully cooperated with the government and have accepted responsibility for these events," Hagedorn said. "This has been a difficult time for us and we are glad to have put it behind us. I want to thank our associates who committed themselves to resolving this matter and I also want to thank both the EPA and DOJ for the professional way in which they handled it."

ScottsMiracle-Gro has posted an open letter from Mr. Hagedorn on its website, www.scottsmiraclegro.com that provides additional context around both the criminal and civil matters and also addresses the company’s efforts to prevent a repeat occurrence.

In addition to the fines, the company also committed in the settlements to provide funding for several important environmental projects. It will provide $100,000 each to the Ohio Audubon’s Important Bird Area Program, the Ohio Department of Natural Resources’ Urban Forestry Program, the Columbus Metro-Parks Bird Habitat Enhancement Program, the Cornell University Ornithology Laboratory, and the Nat