Alpaugh, Calif. — Investigators are still puzzled over why a farm employee drove his tractor in front of a fertilizer train here and was killed instantly in the collision on May 11. “We still haven’t determined why he didn’t stop for the train and went over the tracks and got hit by the train,” Tulare County Sheriff’s Detective Keith Matlock told Green Markets. “We have no idea why he didn’t stop. Perhaps he didn’t see the train.” Matlock said the investigation into the death of Javier Loera, 50, is still ongoing and has been turned over to the California Highway Patrol. He said the short-line train was headed west through Alpaugh, which is just west of Highway 42, and was in the process of delivering fertilizer to a nearby mill. Loera, who works for a nearby farm operation, was approaching the railroad tracks on a John Deere tractor. For unknown reasons he failed to stop for the train and entered the railroad tracks directly in front of the oncoming train. The impact forced the tractor off the tracks and killed Loera at the scene. The conductor was identified as Ralph Celedon, 66, of Bakersfield. The West Isle Line is a private contractor-operated railroad that was taken over by Crop Production Services when it acquired Western Farm Services. The line runs for 5.25 miles from Alpaugh to a connection with the BNSF Railway at Stoil. "Our heartfelt condolences go out to Mr. Loera’s friends and family,” said Spencer Harris, CPS regional manager. “Tragically, Mr. Loera passed away as the result of an accident on May 11. The incident took place at the CPS Alpaugh retail location. CPS fully cooperated with the public safety agencies involved in the accident investigation. This has been a very difficult few weeks for all of us with CPS and the community."
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IRM joins TSI, expands interest in sulfur
Washington — The Sulphur Institute reports that it recently welcomed International Raw Materials Ltd. (IRM), Philadelphia, as a new member. IRM President W.P. “Tip” O’Neill noted that IRM, which already provides raw material sulfur in various parts of the world and sulfur-containing fertilizers elsewhere, is expanding its interest in sulfur. IRM markets and distributes fertilizers and related services for many North American, Pacific Rim, African, and European producers through its global network of distribution assets.
Ostara raises $14.5 M for expansion
Vancouver — Ostara Nutrient Recovery Technologies Inc., a clean water company that recovers phosphorus and nitrogen from industrial and municipal wastewaters to create fertilizers, on May 31 announced the completion of a US$14.5 million private equity financing. Led by VantagePoint Capital Partners, a global investor in energy innovation and efficiency, the financing also included existing Ostara investor and London-based Frog Capital, and a group of new investors including Waste Resources Fund L.P., a fund managed by FourWinds Capital Management. Ostara’s Pearl® technology recovers unwanted nutrients such as phosphorus and nitrogen from wastewater and transforms them into an environmentally friendly, slow-release fertilizer, marketed as Crystal Green®. Ostara currently has four commercial nutrient recovery facilities in operation in the U.S. and three additional facilities under construction, including its first Canadian facility in Saskatoon, Sask., and its first European facility, for Thames Water, in London. Ostara says the new funds will be used to commercialize a significant industrial opportunity that it has been developing for the past 24 months.
Wilbur-Ellis buys aerial application business
Walnut Creek, Calif. — Wilbur-Ellis Co. announced that it has acquired the assets of Washington-based Farm and Forest Helicopter Service Inc., which has been servicing the forestry, nursery, and Christmas tree businesses in Oregon and Washington since 1964. Wilbur-Ellis said the acquisition will be part of its Agribusiness Division’s Northwest operations, and will increase its “already strong footprint in the region, expand its aerial application services, and add to its forestry customer base in the Northwest U.S.” Wilbur-Ellis has several agribusiness locations near Farm and Forest’s operations in Napavine, Wash. Wilbur-Ellis said current shortages of aerial application services in the Oregon and Washington areas, and opportunities to expand the business into tree fruit and other agricultural crops, make this an exciting acquisition for the company. “One of the key drivers for this acquisition was to combine our synergies for the benefit of the customers,” said Ken Manning, senior vice president of the Northwest operations. “They are truly going to appreciate the transparency of doing business with us and all the strengths that Wilbur-Ellis has to offer. Wilbur-Ellis will also greatly benefit from Farm and Forest’s well-qualified pilots and aerial application expertise in forestry.” Dan Foster, president of Farm and Forest, said his business has been growing steadily over the last few years. “We know that in order to get to the next level and provide our customers with all the valuable resources available, including technology, Wilbur-Ellis will be able to give us the means to stay competitive in this market,” Foster said. This is the second aerial business acquired by Wilbur-Ellis in the Northwest. Smith Air, also located in Eastern Washington, was purchased in April 2011. Wilbur-Ellis currently has other aerial operations in California, Nebraska, North Dakota, South Dakota, and Texas. Wilbur-Ellis’ Agribusiness Division generates nearly $1.8 billion in sales revenue and has 160 locations throughout the U.S.
Court dismisses enviro appeal against ICL
Tel Aviv — Israel’s Supreme Court has dismissed an appeal from the country’s environmental lobbies against a government decision on royalty payments by Israel Chemicals Ltd.’s (ICL) Dead Sea Works subsidiary. Under the terms of the agreement reached in January, ICL is to cover 80 percent of the cost of removing salt from the Dead Sea’s pool number 5, where water levels have been rising and threatening to flood nearby hotels. The total cost of the project is put at $1 billion. The government would cover the remaining 20 percent of the cost, though this would be partially offset by an increase in royalty payments on potash production from 5 to 10 percent. The Israel Union for Environmental Defense and the Movement for Quality Government appealed the agreement, arguing that the decision runs counter to public interest and allows the company to continue to exploit the natural resources of the Dead Sea without sufficient environmental protection. The groups also argued that the royalty rate had been set far too low. In response to the court decision, the Israel Union for Environmental Defense said the court did not understand the grave implications the agreement has on the public and on state finances. The organization said in its statement that "by agreeing to this deal, the government will be losing hundreds of millions of dollars that belong to the Israeli public." The statement added that the decision will allow the company to continue its policy of polluting the environment. Meanwhile, Dead Sea Works is moving ahead with the preliminary planning of the conveyor belt and dredging project. Due to the complexity of the project and the lack of local expertise, most of the detailed planning, construction, and equipment will be supplied by foreign companies. The conveyor belt will handle 20 million tons of salt annually at a rate of 4000 tons per hour. Two options – the use of barges or slurry – are currently being considered for dumping the huge quantities of salt back into the northern basin of the Dead Sea, where it will sink to the bottom and does not present a risk. The timetable calls for preliminary planning to be completed by the end of 2013, and actual construction by 2016. It is expected to take two years from the time the process of salt dredging begins until the water level will reach a steady state and cease to threaten the hotels in the region.
Failing to report ammonia storage is costly
Caldwell, Idaho — Rhodes International Inc., which produces frozen cinnamon rolls and other frozen bread products, will pay over $84,000 to settle hazardous chemical reporting violations involving storage of large amounts of anhydrous ammonia at its facility in Caldwell, according to a consent agreement with the U.S. Environmental Protection Agency. In a statement regarding the fine, EPA said that Rhodes failed to properly report the ammonia storage to the Caldwell Fire Department, the Canyon County Local Emergency Planning Committee, and the State Emergency Response Commission. “Local emergency planners and responders rely on this information to do their jobs. It’s critical information for them to protect the community and themselves when a dangerous chemical release occurs,” said Wally Moon, preparedness and prevention unit manager with the EPA emergency management program in Seattle. The company reportedly failed to file inventory forms with state and local emergency response entities from 2006 through 2009 as required by the federal emergency planning and community right-to-know act (EPCRA).
Weaker DAP prices put PHI in loss column; sales up 19 percent
Weaker DAP prices helped put Phosphate Holdings Inc. (PHI), the owner of Mississippi Phosphates Corp., into the loss column for the first quarter ending March 31, 2012. PHI reported a net loss of $1.1 million, compared to a net income of $16,000 in the year-ago quarter. PHI had an operating loss of $1.9 million versus a year-ago income of $53,000. First-quarter EBITDA was also down, at $2.6 million from the year-ago $3.8 million.
First-quarter sales were up 19 percent, to $92.6 million from the year-ago $77.6 million. The increase resulted from higher sales volumes, partially offset by lower average prices. During the quarter, the company sold 205,324 st of DAP at an average price of $448/st, up from the year-ago 140,968 st at $539/st. Some 120,016 st of DAP was sold into the international market during the first quarter.
“Phosphate market conditions during our first quarter were challenging,” said PHI CEO Robert Jones. “Dealer reluctance to stock inventories in advance of the spring planting season resulted in weak demand and declining DAP prices in the U.S. DAP prices per short ton (FOB NOLA) declined from approximately $560/st in early December 2011 to approximately $430/st by late February 2012. During the first quarter, international prices per metric ton (FOB U.S. Gulf) fell from approximately $600/mt to approximately $500/mt. Raw material prices also fell during the quarter, but not to the degree of the decline in DAP prices. As a result, margins were squeezed. Sulfur prices in the first quarter were posted at $172/lt (CFR Tampa). Ammonia prices began the first quarter at $555/mt (CFR Tampa) and closed the first quarter at $470/mt.
“Unquestionably the bright spot for the first quarter was our production rates for DAP and sulfuric acid,” added Jones. “Over the past year we have invested heavily in our plants. As a result of these investments, we are now realizing significant operational improvements. For the first quarter, DAP and sulfuric acid production were 206,996 st and 239,774 st, respectively. This represented our highest quarterly DAP production in 10 years and our highest sulfuric acid production since the first quarter of 2007. We currently expect DAP production for the second quarter of 2012 to approximate 180,000 to 195,000 st.”
Jones noted that PHI’s long-term phosphate rock agreement with Morocco’s OCP S.A. expires June 30, 2012. He said while no assurances would be given, he anticipates securing the company’s future rock requirements from OCP.
Jones remains upbeat going forward. “Agricultural fundamentals for the U.S. farmer remain very attractive. The United States has experienced favorable weather and the planted acreage rate is significantly ahead of the five-year average. Phosphate demand has been strong in the second quarter, and DAP prices have risen. Additionally, we look for the export market to bolster phosphate movement and pricing, with strong demand in India and South America.”
As of March 31, 2012, PHI has a cash balance of about $1.9 million and outstanding borrowings under its revolving credit agreement of $13 million. The company said it spent approximately $1.6 million on capital expenditures in first quarter 2012.
Simplot reduces discharges into river
Orthophosphorus discharges from the J.R. Simplot Co.’s fertilizer complex into the Portneuf River west of Pocatello, Idaho, have been reduced substantially since the company entered into a voluntary consent order/compliance agreement with the Idaho Department of Environmental Quality (IDEQ) in April 2008. Simplot and IDEQ agreed that orthophosphorus discharges from the Don Plant into the river would be reduced by 50 percent in 2013, 75 percent in 2015, and 94 percent in 2021.
“We are still on track to hit those targets. We have reduced phosphorus concentrations in the river by 68 percent from the 2008 baseline,” Alan Prouty, Simplot vice president of environmental and regulatory affairs, told Green Markets. Prouty credited three projects with reducing the discharges – lining a 235-acre phosphogypsum stack, installing a groundwater extraction system with about a dozen wells to contain migration of contaminants, and improving a phosphoric acid plant’s infrastructure.
Asked if cost of the cleanup project will be $50 million, as estimated when the agreement was reached, Prouty said, “We’re making a very significant investment, especially with the lining project. Generally, we don’t discuss cost.” In compliance with the agreement, Simplot continues to pay $15,000 annually to help operate several monitoring stations on the Portneuf River. Those payments are expected to conclude in 2018. The last of four $25,000 payments to ensure water quality improvements was made in 2011. “Money from the $25,000 payments was used for at least one project in which Idaho joined with the local Trout Unlimited to purchase property near Lava Hot Springs, adjacent to the Portneuf,” where grazing and stream bank problems were identified, Prouty said.
Simplot provided equipment to assist with the river’s rehabilitation and helped buy the land, which ultimately will be turned into a public fishing access. A 10-acre decant
or “surge” pond designed to capture wastewater from the gypsum stack was completed three years ago, and recently received processed water. “The pond is working well,” said Prouty. Originally estimated to cost $2.65 million, the pond is needed to isolate decant water from a cooling tower system that has been the largest source of airborne fluoride, plus contain gypsum and any runoff. Prouty said about 20 percent of the lining project has been completed, with work on its next phase planned for this summer. “We will put the liner essentially on top of the entire gypsum stack in service.” High density polyethylene is used in the liner.
Ardaman & Associates, an Orlando-based engineering consulting company with worldwide expertise and experience, has been contracted by Simplot to oversee the liner
project. “We’re using the best liner technology available to help ensure this project provides needed protection for the environment,” said Prouty. Prouty added that Simplot is very confident the Don Plant projects will be successful. He noted the third phase of the extraction wells has been installed, with 1,000 to 1,050 gallons per minute extracted.
Simplot has operated the extraction wells in accordance with a CERCLA consent decree with the U.S. Environmental Protection Agency. About 250 to 300 gallons per minute were to be extracted under the first phase, and about 600 gallons per minute under the second phase. “We are pleased with the operations of the wells. We have no plans to install any more wells. However, we constantly evaluate groundwater data. It’s possible in the future we will install an additional well or two,” said Prouty. In April 1999, IDEQ proposed to EPA that the Total Maximum Daily Load (TMDL) for phosphorus discharges into the Portneuf be 75 parts per billion or 75 micrograms per liter at a Siphon Road monitoring site.
SQM 1Q earnings up 34.7 percent; iodine sales surge, while SPN off
Sociedad Quimica y Minera de Chile S.A. (SQM) reported a 34.7 percent increase in net income for the first quarter ending March 31, 2012, to $150 million ($0.57 per ADR), up from the year-ago $111.4 million ($0.42 per ADR). Gross margin was up 26 percent, to $236.3 million from $187.6 million, while revenues were up 10.3 percent, to $529.6 million from $480 million.
“We are very pleased with our first quarter earnings results,” said SQM CEO Patricio Contesse. “Increased average prices in all business lines when compared to the first quarter of 2011 has led to an increase in gross margin and has contributed to a positive start to the 2012 fiscal year. Iodine and lithium markets continue to be strong and in line with expectations in both demand and pricing. Fertilizer market volumes followed the trend we saw during the fourth quarter of 2011, and in recent weeks we have started seeing positive indications.
“In response to positive market news, we continue our major capital expansions to increase iodine production and increase production in potassium based products; these expansions will give us the flexibility to help meet market demands in the future. Although we continue to monitor broader financial markets and developments in Europe very closely, we remain optimistic about the remainder of 2012.”
Iodine and Derivative sales surged some 53.3 percent during the quarter, to $143.9 million from the year-ago $93.9 million, putting the category in striking distance of the traditional sales leader – Specialty Plant Nutrition (SPN), which saw a 7 percent decline in first-quarter sales, to $159.1 million from the year-ago $171 million. SQM explained that SPN saw increased supply during the first quarter of 2012, as some competitors returned to normal production levels when compared to 2011. It said demand for SPN products was also lower; in particular, some markets, such as the tomato market in North America, presented weaker conditions than expected. However, SQM said it saw a slight increase in volumes when compared to fourth quarter 2011. SQM remains confident, believing SPN conditions will improve during the second quarter and continue throughout the second half of 2012. However, it sees prices remaining flat for the rest of the year.
As for the iodine products, SQM said demand in all main uses continues to grow, specifically in x-ray contrast media and pharmaceutical sales. It said iodine markets have remained tight and that average prices have increased 10 percent versus the year-ago quarter.
Sales in the Potassium Chloride/Potassium Sulfate segment were up 6.6 percent during the quarter, to $133.6 million from $125.3 million. In general, SQM said potash fertilizer market conditions saw slower demand during the quarter, though prices were up over 10 percent versus the year-ago quarter. In recent weeks, SQM said global potash demand showed signs of improvement in major markets, specifically Brazil. It believes these conditions will continue throughout the year. SQM said recently settled contracts in Brazil will allow SQM to post higher average prices in 2012 than in 2011. SQM told analysts that it is shipping more potash to Brazil now that it has more granular product available. This year, overall, SQM expects to sell 1.1 million mt of potash, with 700,000 mt as granular and 400,000 mt standard. The company said first-quarter sales volumes were almost 10 percent higher than those recorded during the fourth quarter.
Potash expansion plans at Salar de Atacama continue. SQM expects total MOP and SOP fertilizer production there to be up over 25 percent in 2012 versus 2011.
First-quarter Industrial Chemicals revenues were off 5.8 percent, to $32.3 million from the year-ago $34.3 million. While volumes were lower, prices were up over 20 percent. SQM said volume decreases were caused mostly by a decrease in demand in t
The Week in Fertilizer Stocks
The Week in Fertilizer Stocks
| Producer | Symbol | Price | Week Ago | Year Ago |
| Agrium | AGU | 78.14 | 80.71 | 88.06 |
| CF Industries | CF | 170.96 | 168.08 | 153.78 |
| CVR Partners | UAN | 20.38 | 21.52 | 19.96 |
| Intrepid Potash | IPI | 19.63 | 19.69 | 32.19 |
| Mosaic | MOS | 47.68 | 48.74 | 70.85 |
| PotashCorp* | POT | 39.53 | 40.20 | 56.60 |
| Rentech Nitrogen | RNF | 23.47 | 23.40 | N/A |
| Terra Nitrogen | TNH | 200.04 | 201.35 | 116.32 |
| Distribution/Retail | ||||
| Andersons Inc. | ANDE | 43.55 | 44.45 | 43.33 |
| Deere & Co. | DE | 73.87 | 75.67 | 84.22 |
| Scotts | SMG | 43.17 | 44.22 | 57.70 |
| * represents three-for-one stock split | ||||