J.R. Simplot Company, headquartered in Boise, Idaho, has announced the promotion of Steve Green to the role of Director, Wholesale Specialty Business Unit. Green has more than 27 years of experience in developing and marketing specialty products, and will be tasked with establishing and leading a team of sales and service professionals to promote Simplot’s growing line of specialty products. The newly formed Specialty Business Unit will report through Mark Auchampach as a part of the broader Wholesale Sales Division within Simplot AgriBusiness, and will operate under the goal of providing more value-added solutions for Simplot’s customers. As part of its effort to enhance its diversified product offerings, Simplot recently announced the launch of its new line of phosphate-based starter and foliar liquid fertilizers.
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Sylvite – Management Brief
Peter Marovich and the staff at Sylvite’s Lakeland/Bartow Florida warehouse locations announced that Gary Garcia will be joining Sylvite on July 1, 2012, as specialties sales manager in the U.S. He will report direct to Marovich.
Garcia has sold products into the turf, horticulture, landscape, consumer retail, specialty agriculture, and arboricultural markets throughout his career, building annual sales volumes in excess of $2.5 million, with a strong emphasis on enhanced efficiency fertilizer. He was president of The Homestead Nitrogen Corp. and general manager of The Homestead Company, which introduced the slow-release nitrogen products Nutralene, Nitroform, and Meth-X 40. He also served as northeastern U.S. regional sales manager for that company for 14 years.
Garcia also worked with Lebanon Turf Products to introduce another Homestead product, MESA, which Lebanon purchased in 2004 after Garcia developed a market for the product in Canada and the U.S. South. Garcia’s further work experience included serving as an independent representative for several companies, including Sylvite, through which he sold Sazolene MU and UF products. He was also involved in the development of Sigma Diagnostics, a division of Sigma Chemical in St. Louis.
“Gary’s extensive knowledge of the turf market and his familiarity to Sylvite will be a great asset to Sylvite and our loyal customer base,” Sylvite said.
Potash defendants may appeal to U.S. Supreme Court
Chicago — The defendants in the Minn-Chem Inc. v. Agrium Inc. case told Green Markets last week that they are weighing their options and may appeal the recent 8-0 decision by the U.S. Court of Appeals for the 7th Circuit (GM July 2, p. 1) to send a potash antitrust case against major global producers back to the U.S. District Court for the Northern District of Illinois, Eastern Division. The defendants may ask the Supreme Court to hear their case, but it is not an automatic appeal; they can decline to hear it. The defendants – Potash Corp. of Saskatchewan Inc., The Mosaic Co., Agrium Inc., Uralkali, Belaruskali, Silvinit, and IPC – are accused of price-fixing. The plaintiffs in the class action suit are U.S. potash buyers, who alleged that the defendants, which produce 71 percent of the world’s potash, initiated a cartel that beginning in mid-2003 drove prices up some 600 percent by 2008.
County considers zoning change for Helena
Madison, Neb. — Madison County commissioners are grappling with the idea of whether they should change a zoning requirement pertaining to how close fertilizer storage facilities should be to neighboring communities. Under consideration is changing the county’s setback from 1,320 feet to 300 feet. Homeowners, however, are strongly opposed to the idea of building a fertilizer plant in their back yards. Helena Chemical, Memphis, has expressed interest in building a $5 million facility in the area, providing that the setback rules change. Lee Klein, chairman for the Madison County board of commissioners, told Green Markets that people are emotional when it comes to fertilizer production, and that it’s difficult to change their perception. Klein added that residents don’t have anything to worry about because the proposed fertilizer plant would be heavily regulated by the EPA. Last month, the commission postponed the zoning issue to June 19; however, at least 80 residents appeared at the Madison County Courthouse, with those in favor of changing the zoning laws and reducing the setbacks arguing that failure to do so would push potential fertilizer business to other counties. Those opposed were residents of the Warnerville township (near Norfolk), who are saying that they don’t want chemicals and industry close to their homes.
Iowa issues voluntary AA tank guidelines
Ames, Iowa — The Iowa Department of Agriculture and Land Stewardship reports that a new set of voluntary guidelines for plumbing multi-tank anhydrous ammonia systems has been recently developed by a coalition of state government, academia, and industry representatives. Each year in Iowa approximately a billion pounds of nitrogen is applied as anhydrous ammonia. As equipment has gotten larger, many dealers are now using multi-tank systems with two anhydrous ammonia tanks mounted on a single wagon running gear. With anhydrous ammonia under pressure, safety is always a concern when plumbing and working around application equipment. "Plumbing for a multi-tank system presents unique challenges," according to Mark Hanna, Iowa State University Extension ag engineer. "Valve location and selection are important decisions impacting safe use. As an example, valves meant to provide excess-flow protection should not be oversized." The guidelines, including sketches of suggested plumbing configurations, can be viewed by going to http://www.agriculture.state.ia.us/feedAndFertilizer/pdfs/VoluntaryGuideline%20PlumbingTwoNH3Tanks2012.pdf). The guidelines are voluntary, but dealers and applicators with multiple-tank systems are encouraged to consider the recommendations as equipment is readied for the fall application season.
One guilty in bomb attempt; another indicted
Amarillo and Sherman, Texas — A Saudi Arabian who lives in Lubbock, Texas, could be sentenced as early as Sept. 11 after being convicted by a federal jury of attempted use of a weapon of mass destruction in connection with his purchase of chemicals and equipment necessary to make an improvised explosive device (IED), and his research of potential U.S. targets, including persons and infrastructure. Federal agents who searched the Texas apartment of Khalid Aldawsari testified during Aldawsari’s trial that they found sulfuric acid and nitric acid, among other things. Aldawsari faces up to life in prison and a maximum fine of $250,000. According to court documents and evidence presented during trial, Aldawsari had been researching online how to construct an IED using several chemicals as ingredients. He had also acquired or taken a substantial step toward acquiring most of the ingredients and equipment necessary to construct an IED and had conducted online research of several potential U.S. targets, the affidavit alleges. In addition, he had allegedly described his desire for violent jihad and martyrdom in blog postings and a personal journal. The verdict was reached earlier this month in the Northern District of Texas. In the meantime, in Amarillo, Anson Chi of Plano, Texas, was indicted for attempting to blow up a natural gas pipeline. His explosive device blew up prematurely, critically injuring him. The indictment did not identify what chemicals were in the device. He was charged with possession of an unregistered firearm or explosive device. If convicted, Chi faces up to 10 years in federal prison.
Gas deal struck in Trinidad
Point Lisas — The government-owned National Gas Co., after a year of negotiations, has signed a 20-year sales contract to supply 100 million cubic feet per day of gas that will allow Methanol Holdings Trinidad Ltd. (MHTL) to proceed with its proposed AUM II nitrogen complex at Point Lisas, according to reports in the Trinidad press. Helm markets the fertilizer from MHTL’s AUM I (GM Aug. 24, 2009). However, ownership of MHTL remains an issue. The deal came in the midst of arbitration in London over company ownership. Previously, Clico, a Trinidad insurance company, held 56.53 percent of MHTL, with the remainder owned by Consolidated Energy Ltd., a group consisting of German firms Helm AG, Ferrostaal AG, and Proman. However, the government took over 49 percent of Clico when it spent $5 billion to bail out the company in 2009-2010. Now the government and the German firms are in arbitration, as the minority stakeholders say they were supposed to be allowed to buy the majority stake should Clico lose ownership. A decision is reportedly due later this summer.
Bidding for Eilat port postponed
Tel Aviv — Israel’s Finance Ministry has postponed for a month the bidding process for operating the Eilat port. The move was designed to give potential bidders more time after Israel Chemicals Ltd. (ICL) was the sole bidder in the process, which closed on July 5. The Finance Ministry came under intense criticism when it became apparent that ICL was the sole bidder. Labor party leader Shelly Yachimovitch charged that the Ofer family (which holds a majority stake in ICL) was in conflict of interest because of interests in Zim Shipping and a private dock owned by ICL at the Eilat port. The ICL bid is also viewed as problematic and will need regulatory approval if accepted. Israel’s Anti Trust Commission is likely to intervene, and either set conditions for ICL ownership of the southern port or disqualify the company altogether. The company was the only one to post the necessary guarantees. Three other bidders – Goldbond Group, Gadot Tankers and Terminals, and Papo Maritime – all informed the Government Corporations Authority that they were dropping out of the process. ICL has rejected criticism of its bid, saying it is the largest employer in southern Israel and intended to invest $125 million in upgrading the port at Eilat. The company termed the attempts to eliminate it from bidding “empty populism.” Eilat is Israel’s third largest port, and has been handling an increasing share of the burgeoning trade with the Far East. ICL ships some 2.5 million tons of potash and other chemicals via the Eilat port, and the importance of the port has continued to grow in recent years as sales to the Far East increase in importance. ICL accounts for nearly 20 percent of the port’s revenues. Shipments via Eilat are expected to continue to increase in the coming years. In addition, the government is planning a rail line to Eilat that would include a feeder line from Sdom at the Dead Sea specifically for shipping potash.
Gavilon to remain intact, eyes world headquarters, beefs up propane business
Gavilon Group LLC, which is in the process of being bought by Japanese company Marubeni Corp. (GM June 4, p. 1), told Green Markets last week that it expects to remain intact after the acquisition, and that the company is moving forward with plans to build its own world headquarters in downtown Omaha, Neb. The company also announced plans July 9 to expand its propane business.
Gavilon said the Marubeni deal, still before regulatory authorities, is expected to close in the late third quarter.
The company is looking to construct a new building to house its current 350 employees in Omaha, as it is outgrowing its current 48,000 square foot site in the downtown ConAgra complex. Gavilon is a spinoff of ConAgra Foods Inc.
Company-wide, Gavilon employs 2,000.
Key for any new headquarters would be a wide-open commodities trading floor and mezzanine that could be some 70,000 square feet. Due to this requirement, the company said it is more apt to build than buy. The company is currently looking at a low-rise design. However, the design, site selection, and building timeline have not been established.
Gavilon confirmed that it has been looking at a 1.45 acre green space, full-block site. Called World-Herald Square Plaza, it is the former home of The World-Herald Co.
Gavilon’s fertilizer trading business is based in Savannah, Ga.
In other news last week, Gavilon announced it has expanded its natural gas liquids (NGL) business and will market propane along all of the major U.S. propane pipelines, including TEPPCO and Dixie, with additional supply from refineries, terminals, and fractionators. Joining Gavilon to provide the company expertise in the top propane markets in the U.S. are John Bienkowski, Bill Connallon, Nick Di Risio, Pat Frey, John Lorgan, Jim Neumann, and Matt Ward.
"We are looking forward to expanding our NGL business with the addition of a seasoned marketing and operations team," said Jay Furman, head of Natural Gas Liquids Marketing at Gavilon. "These individuals are renowned for their customer service, reliability, and logistics expertise, as well as their relationships with a large array of customers, suppliers, and transportation providers.
"Our marketing team now has the ability to provide services to satisfy customer demand for propane and other natural gas liquids east of the Rocky Mountains," Furman added.
USDA lowers projected corn yield by 20 bushels/acre, cites extreme conditions
USDA lowered the projected U.S. corn yield to 146 bushels/acres in its July 11 World Agricultural Supply and Demand Estimates (WASDE) report, down 20 bushels from last month, reflecting the rapid decline in crop conditions since early June and the latest weather data.
The season average 2012/13 farm price for corn is projected at $5.40-$6.40 per bushel, up sharply from $4.20-$5.00 per bushel in June.
“Persistent and extreme June dryness across the central and eastern Corn Belt and extreme late June and early July heat from the central Plains to the Ohio River Valley have substantially lowered yield prospects across most of the major growing region,” the report said. Harvested area is also reduced slightly based on USDA’s June 29 Acreage report (GM July 2, p. 11).
USDA said reduced supplies and higher prices are expected to sharply lower 2012/13 corn usage, with the biggest reduction for feed and residual disappearance, projected down 650 million bushels. U.S. feed grain supplies for 2012/13 are projected sharply lower, with corn production prospects reduced 1.8 billion bushels from last month. Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol.
USDA said corn exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments.
Ending corn stocks for 2012/13 are projected at 1.2 billion bushels, down 698 million from last month’s projection.
The U.S. soybean crop was also feeling the pinch from drought, USDA said. Soybean production is projected at 3.050 billion bushels, down 155 million, as increased harvested area is more than offset by reduced yields. The soybean yield is projected at 40.5 bushels/acre, down 3.4 bushels from last month. “The drop reflects sharply declining crop conditions resulting from limited rainfall since early April, coupled with excessive heat across much of the producing area in late June and early July,” USDA said.
The U.S. season average soybean price is projected at $13.00-$15.00 per bushel, up $1.00 on both ends of the range.
Soybean supplies are 160 million bushels below last month’s forecast due to lower beginning stocks and reduced production. Soybean exports for 2012/13 are reduced 115 million bushels to 1.37 billion, reflecting lower U.S. supplies, although increased exports from South America and Canada partly offset reduced U.S. exports. Soybean ending stocks are projected at 130 million bushels, down 10 million.
USDA’s projected U.S. wheat supplies for 2012/13 were raised 5 million bushels, with higher estimated beginning stocks more than offsetting lower forecast production. Wheat production for 2012/13 was reduced 10 million bushels, with lower production of hard red winter wheat projected in Texas, Colorado, Oklahoma, and Montana. USDA said a 14-million-bushel reduction in winter wheat production is only partly offset by a higher spring wheat forecast.
The projected range for the 2012/13 season average farm price for all wheat was raised 60 cents on both ends to $6.20-$7.40 per bushel, supported by the sharply higher corn and soybean prices. This compares with the record $7.24 per bushel reported for 2011/12, USDA said.
Total U.S. wheat use for 2012/13 is projected 35 million bushels higher, while ending stocks are projected 30 million bushels lower.
U.S. rice production for 2012/13 was raised 4 percent to 191.0 million cwt, USDA said, due mostly to an increase in harvested area as indicated by USDA’s June 29 Acreage report. Harvested rice area for 2012/13 was raised 107,000 acres to 2.64 million, but USDA said this acreage figure is still the lowest since 1987/88.
The 2012/13 season