All posts by webster@kennedyinfo.com

New transportation bill clarifies industry-supported HOS exemption; TFI, ARA voice support

Featured, News

Congress on June 29 approved the conference report on the Moving Ahead for Progress in the 21st Century Act, a two-year reauthorization of the Surface Transportation Bill. The current highway bill was set to expire on June 30.

The new legislation was applauded by The Fertilizer Institute(TFI), the Agricultural Retailers Association (ARA), the National Council of Farmer Cooperatives (NCFC), and the Agricultural and Food Transporters Conference (AFTC) for including several industry-supported provisions, including one that clarifies the agricultural hours of service (HOS) exemption.

According to the trade groups, the provisions will resolve questions regarding the applicability of the HOS exemption to all farm supplies, including movement from distribution point to retailers as well as across state lines where both states have adopted the exemption.

“The agricultural exemption to the HOS rule is a crucial tool for transporters of agricultural products during the busiest times of the year,” said AFTC Chairman John Whittington. “Including this provision into law will allow us the certainty we need to continue to service our customers in an efficient and timely manner.”

The HOS exemption had come into question in 2009 when the Federal Motor Carrier Safety Administration (FMCSA) issued an interpretation of the regulations that resulted in transportation restrictions for certain farm supplies. The new legislation amends aspects of the Motor Carrier Safety Improvement Act, which served as the basis for FMCSA’s 2009 interpretation, to clarify the applicability of exemptions for agricultural products.

“We commend the Congress for its action on this critical piece of legislation,” said TFI President Ford B. West. “Fertilizer is an essential component of farm productivity and the timely delivery of nutrients to our customers is of the upmost importance.”

All four groups applauded Reps. Sam Graves (R-Mo.) and Blaine Luetkemeyer (R-Mo.), as well as Sens. Amy Klobuchar (D-Minn.) and Pat Roberts (R-Kan.), for introducing the legislation, saying the final outcome was the result of bipartisan leadership.

“The passage of this important bill by Congress will help ensure that agricultural retailers are able to supply farmers with the products they need, in the most efficient manner, during busy times of the year,” said Daren Coppock, ARA president and CEO. “We appreciate the leadership demonstrated by the conferees on this critical issue for the agriculture industry.”

Added Chuck Conner, president and CEO of NCFC, “Congresses action today will help provide producers and their cooperatives with the certainty and clarity they need to move forward with planning for this fall. I would like to applaud the leadership shown by the conferees in reaching an agreement on this legislation vital to maintaining transportation infrastructure across the country.”

CHS adds to Brazilian fertilizer assets

Brazil, Featured, News

CHS Inc. has announced that it has purchased a 50 percent stake in Andali, a provider of fertilizer storage and blending services based in Paranagua, Brazil.

"CHS strategic investment in Andali supports our global fertilizer growth aspiration," said Stefano Rettore, senior vice president, CHS South America. "CHS will have secure, long-term access to fertilizer capacity for current and future demand allowing us to serve rapidly developing corn and soybean production."

This investment will allow Andali to further develop its industrial capacity on a national scale with improved and expanded services and efficiencies.

Rafael Vaccari Goncalves, recently appointed CEO of Andali, welcomed the CHS investment. "Andali and CHS share common values. With this investment Andali is going to be well-positioned to deliver high quality fertilizer services to customers throughout Brazil," said Vaccari Goncalves.

CHS currently has a service agreement with Andali, part of its extensive supply chain capabilities. "CHS sources fertilizer from 20 countries and has the global expertise, connections and customer focus to expand fertilizer sales in this important geography," said Rettore.

In May, CHS announced it had purchased 25 percent ownership of TCN, a Brazilian logistics company and also signed a long-term agreement with TCN, securing export terminal access at the Port of Itaqui, Sao Luis, Brazil.

Northern Plains corn growers eyeing world-class N plant

Featured, News, Northern Plains

Northern Plains corn growers are eyeing the construction of a world-scale, $1 billion nitrogen plant, with the possibility of using natural gas, which is currently being wasted.

Corn growers in the tri-state area of North Dakota, South Dakota and Minnesota say they have become weary of being at the end of the line in the fertilizer chain. They’ve been looking at this problem for quite some time and now believe their own fertilizer plant is the answer.

Darin Anderson, president of the North Dakota Corn Growers Association (NDCGA) explained the situation this way: “In the tri-state area there’s only one nitrogen facility. As of right now if the plant went down we’d be in a pinch.” Anderson recalled last spring when the plant in Beulah in North Dakota had a fire and local prices went from $800 to $1,100 a ton for anhydrous ammonia.

“Because we don’t have a very large supply, any disruption can cause a lot of volatility and we are hoping to reduce that. We’ve been looking at this for a long time and our feasibility study has been completed and it was positive to the point we voted to go ahead with our plans. We’re working on the production mix and then moving into planning the design and are narrowing down the location as we speak.” Anderson added that the panel is looking into more than one nitrogen product from the plant.

Tom Lilja, NDCGA executive director added that the problem has been building over the years. “Actually this area has been at the end of the line for fertilizer distribution and there’s a bit of a hole up here and we feel this could potentially solve the problem,” Lilja remarked. He said Anderson and his steering committee have been looking into the problem for some time and have now decided to move from assessing the feasibility into the business planning stage that could result in a world-scale nitrogen fertilizer plant.

The committee made up of growers along with input from fertilizer industry consultants has voted to proceed on this course recognizing that nitrogen fertilizer usage in the Northern Plains is likely to continue to increase in the next several decades, and a fertilizer production facility located where the fertilizer is consumed will result in transportation advantages while addressing the need for a stable local supply. Two of those on the committee include Larry Mackie of Mackie International Inc. and Don Pottinger, former fertilizer industry CEO, currently with his own independent consulting company.

Researchers also have their eye on an abundant source of natural gas which presently is being burned off or flared in oil well operations in the state. Presently some 30 percent of the natural gas produced in North Dakota is burned as waste. The committee agreed however that the resource still needs a lot of development. Presently research is being carried out under a grant at North Dakota State University to determine the feasibility of collecting the natural gas and converting it to ammonia.

Meanwhile, the steering committee has been looking at other advantages including direct ownership in which farmers would be offered ownership in the facility; a more secure supply since a majority of the country’s nitrogen fertilizer needs are now imported; and a benefit to the economy from a facility which would require a skilled workforce resulting in well-paid, long term jobs.

Study calls for tribes to remove politics from business decisions

News, Western

An Idaho State University study authored by Dr. Neil Tocher recommends that the Shoshone-Bannock Tribes in particular and Native American tribes in general adopt success factors to enhance mutually beneficial economic collaboration with non-tribal entities. The study was commissioned by the Power County Development Authority.

In his study, Tocher, an ISU business professor, concluded tribes must take three critical steps to operate profitable and sustainable economies, stressing the need to keep politics out of business decisions. To do so, Tocher recommends that a governance system be created for Indian-owned enterprises distinguishing business managers from political forces and monitoring the performance of the managers. That would entail setting up a semi-autonomous business development company run by professional managers who would report to a board of directors and be free from tribal council oversight.

Tocher also advocates that a dispute resolution system be created insulated from political interference with tribal councils not allowed to intervene in disputes between tribal and non-tribal entities.

Also, competent, reliable bureaucracies need to be created to provide basic services such as fire and police protection, tax collection, and fish and game management, he states.

Other key success factors include presence of valuable natural resource deposits on reservation land, proximity to large cities, willingness of tribal authorities to work on government projects, technical knowhow of tribal members and tribal sovereignty.

In his report, Tocher said: “The overlap of the tribal council and business council may interfere with the development of new businesses on the reservation due to political pressures.”

As previously reported, the Shoshone-Bannock Tribal Court of Appeals recently announced that FMC Corp. must continue to pay the Shoshone-Bannock Tribes $1.5 million annually for waste stored at the site where FMC operated an elemental phosphorus plant west of Pocatello, Idaho, in Power County from 1947 to 2001. FMC officials say they intend to contest that ruling in the U.S. federal court system.

Shoshone-Bannock Tribal Chairman Nathan Small, says Tocher’s study is erroneously based on the premise that the tribes have not made strides in recent years and are the main obstacle to blocking economic development – when the opposite is true. Undermining tribal sovereignty perpetuates reservation poverty, he says.

“The Shoshone-Bannock Tribes are currently an economic powerhouse in Southeast Idaho. In a time of high unemployment and global financial crisis, we are currently hiring – for dozens of good paying jobs. We have made steady and substantial economic progress over the last four decades,” Small wrote in an opinion piece on the Idaho State Journal’s opinion page. “We have a new justice center, a new hotel and event center that will be open soon, and a casino that is packed nightly. We are employing more tribal members – and Southeast Idaho community members – than ever.”

Development of the FMC site and the Pocatello Regional Airport, which also sits on the reservation, have been recommended as economic opportunities for the Shoshone-Bannock Tribes.

Noting that Tocher’s study was financed by Power County, Small said the county would prefer to work with a professional manager rather than the tribal council and blame the tribes for hindering development near the airport.

“By dismissing the tribal council as the problem blocking economic development, Power County can make the case that any economic development by the airport won’t work. This is nonsense. Power County will do better for its own citizens by working with the Shoshone-Bannock Tribes. There’s far more we can do together than by being

The Fertilizer Institute – Management Briefs

Management Briefs

The Fertilizer Institute has announced the appointment of Laura Kubitz as manager of public affairs, joining TFI Vice President of Public Affairs Kathy Mathers on TFI’s communications team. She will help coordinate TFI’s member and external communications efforts and will serve on TFI’s policy staff and nutrient stewardship teams.

She has just earned a master of science degree in agricultural education and communication from the University of Florida (UF). She holds a bachelor of science degree in journalism, also from UF.

Kubitz can be reached at 202.515.2716 or via e-mail at lkubitz@tfi.org.

Organic Plant Health Inc. – Management Brief

Management Briefs

Organic Plant Health Inc., Charlotte, has named Marc Nichols to be position of national sales manager. He will be based in Atlanta. His primary role will be to lead and manage the company’s sales and expansion efforts, including the identification of qualified candidates for new sales positions, managing the growing demand for company products, and spearheading the company’s expansion efforts across the country.

EuroChem completes acquisition of K+S Nitrogen

News, News Briefs, Russia, UAN, Western

Moscow and Kassel – EuroChem and K+S Group on July 2 announced the successful completion of the acquisition of K+S Nitrogen by EuroChem. The sale of K+S’ nitrogen fertilizer distribution business to EuroChem was approved by the European Union antitrust authority on June 25, 2012. “The acquisition of K+S Nitrogen is the latest step in our strategy to expand EuroChem’s geographic footprint and move closer to our end-users, while further bolstering our product offering,” commented Valery Rogalskiy, EuroChem sales director. K+S plans to focus on its potash, magnesium and salt businesses. As a result, K+S sold the business activities of COMPO to the investment company Triton last year and announced the sale of K+S Nitrogen to EuroChem May 8, 2012.

OCI looks at another Iowa site

Midwest, News, News Briefs

Cairo — Orascom Construction Industries (OCI) is now looking at a second site in Iowa for a potential $1.6 billion nitrogen complex, according to the Iowa press, which reports that the company has filed for an air quality permit for a site near Middletown. Unlike sites in Wever, in Iowa’s Lee County (GM Feb. 27, p. 12) and Peoria County, in Illinois (GM June 4, p. 10), this site is not on a river, though it is near a four-lane highway. OCI is also reportedly looking at adding to its existing production at Beaumont, Texas. OCI, while acknowledging that sites are under considerations, says it will have nothing more to say until its board makes a final decision.

BHP may go slow on Jansen?

News, News Briefs

Melbourne — First came word that BHP Billiton might cut back on capital expenditures plans, leading to speculation that it might table its giant Jansen potash project in Saskatchewan, altogether. BHP denied any such plans. Now comes a report in The Australian Financial Review that BHP may sink two mine shafts at Jansen but delay some surface infrastructure work. BHP had not responded to inquiries at press time. To date the company has spent several million on Jansen, but its board of directors is yet to give the project the final green light to proceed to completion.