Dry Fertilizer Barge Rates
| 3/1/2019 | Last Week | |
| Memphis | 9.00-18.00 | 9.00-16.00 |
| St. Louis | 9.00-21.75 | 9.00-16.00 |
| Peoria | 14.00-24.00 | 14.00-22.00 |
| Cincinnati | 14.00-29.50 | 14.00-22.00 |
| St. Paul | 16.00-28.50 | 16.00-24.00 |
| Catoosa/Inola | 18.00-27.00 | 18.00-25.00 |
All Posts from March 1, 2019
Nutrien to Buy Australia’s Ruralco
Nutrien Ltd., Saskatoon, said on Feb. 27 that it has entered into a binding agreement with Ruralco Holdings Ltd., Hobart, Tasmania, to acquire all the shares of Ruralco at a price of A$4.40 per share, for a total purchase price of $469 million. Ruralco, listed on the Australian Securities Exchange, has 105,052,247 ordinary shares outstanding and 1,449,648 outstanding performance rights, share rights, and matched shares.
“The combination of our Landmark operations with Ruralco in Australia is expected to provide significant benefits for all stakeholders, including delivering excellent value for both Ruralco and Nutrien shareholders,” said Nutrien President and CEO Chuck Magro. “The acquisition is anticipated to be immediately accretive to Nutrien and is expected to have a post-synergy EBITDA multiple of 5.6 based on 2018 results.”
“The combined business will further strengthen the service and innovation that Landmark delivers to Australian growers,” said Rob Clayton, the head of Landmark. “With an outstanding team across Australia and access to Nutrien’s expertise, we will provide enhanced solutions and greater value to help Australian growers in an increasingly competitive global market.”
Ruralco, founded in 1970, is one of Australia’s leading agriservices businesses, with 216 farm centers and over 500 locations company-wide. It employs over 2,000 staff under a variety of brands. Ruralco provides an extensive range of ag supplies through both its own stores and CRT, Australia’s largest independent retailing group.
Company-wide, Ruralco reported net profit after tax (NPAT) of $25.2 million on revenues of $1.91 billion for the year ending Sept. 30, 2018, up from 2017’s $22.4 million and $1.83 billion.
Ruralco’s Rural Services segment is the company’s largest in terms of revenues. It includes rural supplies, wool agency, real estate, and livestock agency. In FY18, some 31 percent of rural supply sales by type came from fertilizer, with some 33 percent from crop protection, 15 percent animal, health, and feed, 9 percent general merchandise, 7 percent fencing, and 5 percent seed.
Ruralco’s Rural Service segment reported underlying EBITDA of $88 million on revenues of $1.432 billion in FY18, compared to $88 million and $1.434 billion in FY17. Underlying gross profit was $264.6 million, off slightly from the prior year $265.3 million.
Other segments include Water Services, which distributes water products, provides water infrastructure services, and brokers water entitlements to the Australian agricultural sector, and Financial Services and Live Export.
Nutrien’s Landmark has over 200 locations servicing 100,000 clients. In addition to ag inputs, it is also involved in livestock, wool, real estate, insurance, and finance. Nutrien’s predecessor, Agrium Inc., bought Landmark in 2010, and the company said it has tripled its EBITDA.
The transaction will be executed under Australian law and is subject to customary conditions precedent, including Ruralco shareholder approval and regulatory approval from the Australia Competition and Consumer Commission and the Australian Foreign Investment Review Board.
Richardson Acquires Agland Seed and Chemicals
Richardson International Limited, Winnipeg, Man., announced on Feb. 20 that it has acquired Agland Seed and Chemical Ltd., a retail crop inputs business located in the northern Alberta community of La Crete. The transaction closed on Feb. 19, with all former Agland employees joining the Richardson Pioneer team.
“With Ag Business Centres throughout the Peace River region of Alberta, the La Crete location will complement our existing Richardson Pioneer network,” said Tom Hamilton, vice president of Agribusiness Operations for Richardson. “We look forward to building relationships with producers in the area and providing them with leading seed, fertilizer, and crop protection technologies, in addition to year-round support with our CropWatch™ agronomy team supported by our leading edge CropMatrix platform.”
Richardson said the La Crete area was identified as a gap within its Pioneer crop inputs network in Western Canada. The company said the new location will complement its nearest Ag Business Centre in High Level, Alta.
“We are very happy to announce this transaction,” said George Unrau, co-owner of Agland. “We share the same community and business values with Richardson Pioneer. We know that under the Richardson Pioneer umbrella, we will be able to not only continue to provide the excellent service our customers have grown to know, but we will be able to expand our offerings for customers, giving them the best possible products and services.”
Richardson has been expanding its crop inputs network through both acquisitions and new builds in recent years. The company in 2018 opened new crop inputs centers in Wakaw, Pasqua, and Elrose, Sask., and announced last September (GM Sept. 14, 2018) that it was constructing a new full-service crop inputs facility in Delisle, Sask.
Recent acquisitions include Eagle Agro Services Ltd., a full-service retail crop inputs business in Veteran, Alta.; Bestland Air Ltd., an independent crop inputs retailer located near Starbuck, Man. (GM Dec. 15, 2017); two full-service retail facilities in Vermilion and Forestburg, Alta. (GM Sept. 1, 2017); Crop First Agro in Grenfell, Sask. (GM Feb. 3, 2017); and 10 retail crop inputs locations from CHS Canada in October 2017 (GM Nov. 3, 2017).
The company also reported on Feb. 25 that it has completed the acquisition of Wesson, the U.S.-based retail cooking oil brand. The deal was first announced on Dec. 18, 2018, and includes the Wesson production facility in Memphis, Tenn., which has more than 120 employees.
Richardson is Canada’s largest agribusiness, with more than 2,700 employees across Canada, the U.S., and the U.K. The company is a global handler and merchandiser of all major Canadian-grown grains and oilseeds and is a vertically-integrated processor and manufacturer of oats and canola-based products. Richardson also operates port terminals at Vancouver, B.C., Hamilton and Thunder-Bay, Ont., and Sorel, Quebec. Richardson Pioneer is the company’s agronomy division.
Mosaic Reports Strong Results, Increases Annual Dividend Target
The Mosaic Co., Plymouth, Minn., reported fourth-quarter net earnings attributable to Mosaic of $112.3 million ($0.29 per diluted share) on net sales of $2.52 billion, compared to the year-ago loss of $431.1 million ($1.23 per share) and $2.09 billion, respectively. Adjusted EBITDA was up, at $590 million from $366 million. The company also announced an increase in its annual dividend target, to $0.20 per share.
“Mosaic delivered strong fourth-quarter results to complete a year of significant accomplishments and operational excellence,” said President and CEO Joc O’Rourke. “We are capturing the full benefit of improved market conditions, and we expect our strong business and financial performance to continue in 2019.”
Fourth-quarter Phosphate gross margins were $151 million on sales of $926 million, compared to the year-ago $133 million and $1 billion, respectively. Volumes dropped to 1.9 million mt from 2.5 million mt, reflecting the closure of the company’s Plant City, Fla., facility, as well as wet weather that impacted the fall application season. Margins per mt were up, at $81 from $53.
Mosaic reported record MicroEssentials sales, reflecting an 18 percent annual growth rate over the past decade. The company said it sold over 3 million mt of the product in 2018, with 1 million mt going to Brazil. Production topped 3 million mt, getting closer to 3.5 million mt of capacity. Going forward, the company expects to add storage to address the seasonality of sales versus production, as well as debottlenecking its existing facilities.
Fourth-quarter Potash gross margins were $202 million on sales of $592 million, up from the year-ago $114 million and $496 million, respectively. The company cited higher prices and increased volumes. Volumes were 2.3 million mt, up from 2.2 million, and gross margins per mt were $88 versus $51.
Mosaic said it produced record volumes during the quarter and year, with a quarterly operating rate of 99 percent. Fourth-quarter MOP cash costs of production dropped to $72/mt from $87/mt.
O’Rourke told analysts that both global potash and phosphate demand/supply were expected to be in balance in 2019, with potash producers having to produce at record capacity in order to meet demand. He noted that while Mosaic, Belaruskali, and some ICL mines were at record production in 2018, other production came offline in the U.K. and Germany, with production decreased in Chile and flat in China.
As for the wet fall season in North America, he expects that at least 80 percent of the tonnage that was not applied in the fall will go down in the spring.
Fourth-quarter Mosaic Fertilizantes gross margins were $118 million on sales of $969 million, up from the year-ago $32 million and $520 million, respectively. Volumes were 2.1 million mt, up from 1.4 million mt, while gross margins per mt were $56, up from $23.
Mosaic reported that due to the complex and significant nature of the Vale acquisition it would need extra time to file its annual 10-K. It expects to file it within 15 days of the March 1 deadline.
Full-year net income was $470 million ($1.22 per share) on sales of $9.6 billion, up from 2017’s loss of $107.2 million ($0.31 per share) and $7.41 billion, respectively. Adjusted EBITDA was $2.03 billion, up from $1.21 billion.
Full-year Phosphate operating earnings were $415 million, up from 2017’s $192 million. Adjusted EBITDA was $872 million versus $555 million. Volumes were off, at 8.4 million mt from 9.5 million mt.
Full-year Potash operating earnings were $454 million, up from $281 million. Adjusted EBITDA was $805 million versus $581 million. Volumes were 8.8 million mt versus 8.6 million mt.
Full-year Mosaic Fertilizantes operating earnings were $227 million, up from 2017’s $63 million. Adjusted EBITDA was $410 million versus $73 million, with volumes up at 9.13 million mt from 6.02 million mt.
“Mosaic generated strong cash flow in 2018, and we expect another good year ahead,” he added. “The 100 percent targeted dividend increase we announced today exemplifies our positive outlook.”
Citing accelerated synergy capture in Brazil, the transformation of its phosphate business, and a successful ramping up of the Esterhazy K3 potash mine, Mosaic is projecting 2019 adjusted EBITDA of $2.2-$2.4 billion and adjusted EPS of $2.10-$2.50. It sees 2019 potash sales volumes at 9-9.4 million mt, phosphate at 8.6-9 million mt, and Mosaic Fertilizantes at 9.4-9.8 million mt.
First-quarter 2019 assumptions include potash volumes of 1.7-2 million mt with gross margins of $90-$100/mt, phosphates at 1.6-1.9 million mt and $40-$50/mt, and Mosaic Fertilizantes at 1.3-1.6 million mt and $40-$50/mt.
OCI Doubles 4Q Adjusted EBITDA, Iowa Plant Reaches Record Production
OCI NV, Amsterdam, reported a 102 percent increase in adjusted EBITDA to $269 million on revenues of $941.5 million for the fourth-quarter ending Dec. 31, 2018, up from the year-ago $133.2 million and $642 million, respectively. However, it continued to report a net loss attributable to shareholders. The loss was $18.7 million, though improved from the year-ago $56.1 million. Company-wide sales volumes were up 24 percent, to 3 million mt from 2.45 million mt.
The company touted the performance of its Iowa Fertilizer Co. (IFCo) unit, which reached record production levels of 115 percent of nameplate capacity during the quarter. OCI said this played a significant role in the increased EBITDA. The company also revealed that in late 2018 it received a permit to further increase IFCo’s operating rates on a permanent basis. IFCo is expected to have higher production levels in 2019 than in 2018, approaching 120 percent of nameplate capacity.
CEO Nassef Sawiris highlighted the flexibility of having some 500,000 tons of onsite and offsite storage in the U.S. “Our significant onsite ammonia storage allowed us to comfortably keep tons that are not placed in the fall for our customers and achieve a step-up for our spring pricing,” he told analysts on Feb. 26. “On UAN, we have over 150,000 tons of offsite storage in place across the Cornbelt shared between ten facilities.” He added that the N-7 joint venture also bolsters storage and marketing capabilities for urea into the Dakotas and Minnesota.
On the international front, Sawiris said fertilizer and methanol prices have been negatively impacted by U.S. sanctions on Iran, as that country has sold at significant discounts into the market. However, the company said as those sanctions are now being fully implemented and export opportunities for Iran diminish, it expects Iran exports to likely decline in 2019.
As for OCI’s North African production, Sawiris said except for a couple of turnarounds expected in Algeria, most production metrics are very supportive of stronger volumes coming out of North Africa.
For the year, OCI’s total U.S. fertilizer operations (IFCo, OCI Fertilizer, and N-7) reported an operating profit of $39.3 million on revenues of $489.1 million, up from a 2017 loss of $53.5 million and $193.3 million, respectively. Adjusted EBITDA was $157.2 million, up from $4.6 million.
Company-wide, OCI reported full-year adjusted EBITDA of $937.5 million on revenues of $3.25 billion, up from 2017’s $634.3 million and $2.25 billion, respectively. OCI reported a net loss of $48.7 million, down from the year-ago loss of $103.6 million. OCI sales volumes were up 29 percent in 2018, to 11.15 million mt from 2017’s 8.7 million mt.
OCI Product Sales Volumes (000 mt)
| Fertilizer | 4Q-18 | 4Q-17 | 2018 | 2017 |
| Own-Produced | ||||
| Ammonia | 450.7 | 358.8 | 2,013.1 | 1,477.8 |
| Urea | 749.4 | 696.0 | 2,960.8 | 2,517.9 |
| CAN | 253.5 | 232.6 | 1,063.8 | 1,189.3 |
| UAN | 464.7 | 371.4 | 1,538.4 | 752.4 |
| Total Own Fertilizer | 1,918.3 | 1,658.8 | 7,576.1 | 5,937.4 |
Industrial Chemicals
| 4Q-18 | 4Q-17 | 2018 | 2017 | |
| Own-Product | ||||
| Methanol | 421.9 | 357.1 | 1,415.7 | 1,285.5 |
| Melamine | 42.7 | 33.6 | 149.3 | 152.6 |
| DEF | 82.8 | 7.0 | 261.0 | 7.3 |
| Total Industrial | 547.4 | 397.7 | 1,826.0 | 1,445.4 |
| Total Own Product | 2,465.7 | 2,056.5 | 9,402.1 | 7,382.8 |
Traded Third Party – Fertilizer and Industrial Chemicals
| 4Q-18 | 4Q-17 | 2018 | 2017 | |
| Ammonia | 120.3 | 95.5 | 394.4 | 249.9 |
| Urea | 128.4 | 31.1 | 328.1 | 102.3 |
| UAN | 24.4 | 51.1 | 90.1 | 157.6 |
| Methanol | 85.7 | — | 252.1 | — |
| AS | 202.1 | 215.7 | 673.6 | 784.1 |
| DEF | 13.5 | — | 13.5 | — |
| Total – Third Party | 574.4 | 393.4 | 1,751.8 | 1,293.9 |
| Total – All | 3,040.1 | 2,449.9 | 11,153.9 | 8,676.7 |
Nutrien Announces Acquisition of Van Horn
Nutrien Ltd., Loveland, Colo., announced on Feb. 28 that it has completed the acquisition of Van Horn Inc., a leading U.S. retailer and agricultural services provider in central Illinois that has been in business for more than 80 years.
Headquartered in Cerro Gordo, Ill., Van Horn operates 11 retail facilities serving more than 5,000 customers in 19 Illinois counties. In addition to the original Cerro Gordo location, Van Horn’s other Illinois facilities are located at Bethany, Delavan, Dewitt, Findlay, Goodwine, Havana, Macon, Minier, Sullivan, and Warrensburg. According to Nutrien, Van Horn was ranked by CropLife as the 42nd largest U.S. agricultural retailer in 2018.
“Van Horn has built a strong ag retail business, with a track record of providing high-value products and service for growers in Illinois,” said Mike Frank, Nutrien’s Executive Vice President and CEO of Retail. “This acquisition is an attractive addition to Nutrien Ag Solutions’ retail network, and we look forward to building on Van Horn’s relationships with their customers. We are seeing an acceleration of consolidation within the ag retail industry, and this acquisition aligns with our strategy to grow our Retail business through highly accretive acquisitions.”
Van Horn’s list of products and services include seed, fertilizer, crop protection, precision technologies, and turf and small seed. The fertilizer products listed on the company’s website include anhydrous ammonia, UAN, ammonium sulfate, DAP, potash, and lawn and garden fertilizers.
“We are very excited to join Nutrien Ag Solutions and look forward to fully utilizing the expanded platform of products, services, and technologies that this transaction will enable us to provide in supporting our farmer customers,” said Dan Mogged, president and CEO of Van Horn. “We also see this as a great opportunity for our employees to benefit from the expanded scale and growth opportunities that will come along with joining an industry leader in ag retail.”
The Mosaic Co. – Management Brief
Dr. Michael Rahm, The Mosaic Co.’s Vice President of Market and Strategic Analysis, will be retiring in April after some 33 years with Mosaic and its predecessor companies. Responsibilities for the analysis function now go to Andy Jung, who has been the Director, Market and Strategic Analysis, for five years.
FCL to Build New Alberta Fertilizer Terminal
Federated Co-operatives Limited (FCL), Saskatoon, Sask., announced on Feb. 26 that it is investing $41.8 million to build a new state-of-the-art, high-throughput fertilizer terminal near Grassy Lake, Alta.
Construction is scheduled to begin this spring, with the terminal expected to be fully operational for the summer of 2020. FCL said the project will create about 150 jobs during the construction phase, with five full-time and two seasonal positions required when the terminal becomes operational.
“This facility supports local co-ops and is the next step on our journey to grow within the crop inputs business,” said Patrick Bergermann, FCL’s Associate Vice-President of Ag and Home. “This is a long-term investment back into Western Canada that will help us better serve and meet the needs of local co-ops, along with their members and customers.”
The new terminal will have 34,400 mt of storage capacity, and will be able to fill a super B trailer with straight product in about six minutes. FCL said the site will have rail access with a looptrack that can accommodate up to 110 car unit trains, which will allow the facility to efficiently receive product from domestic and international suppliers.
“Having a facility that efficiently receives and stores phosphate is essential as domestic production ends this spring,” said Dan Mulder, FCL’s Director of Fertilizer. “This is one of the opportunities we want to provide through the terminal, along with greater convenience and service levels for co-op customers in southern and central Alberta.”
This is the third fertilizer terminal to be constructed by FCL in recent years to warehouse, blend, and distribute a full suite of crop nutrition products to locally-owned Co-op Agro Centres, which then supply local farm customers. FCL invested C$75 million in 2016 to build two fertilizer terminals in Hanley, Sask., and Brandon, Man., which have storage capacities of 45,000 and 27,500 mt, respectively (GM July 29, 2016). The Hanley and Brandon terminals became operational in 2017 (GM Sept. 22, 2017).
FCL is owned by more than 190 retail cooperatives that form the Co-operative Retailing System (CRS) in Western Canada. FCL was established in 1955 to provide centralized wholesaling, manufacturing, marketing, and administrative services to member co-ops.
Concentric Ag Corp. – Management Brief
Concentric Ag Corp., Denver, a developer of biological and plant nutrient inputs, announced on Feb. 27 that its president and CEO, Donald R. Marvin, will transition within the next few months to become the executive chairman of its board of directors. He joined Concentric (formerly Inocucor) as CEO when it was a virtual agriculture technology startup in 2014.
The company noted that it has grown from one small office in Montreal to three collaborative business units with more than 60 registered biological and plant nutrient products in the market across North America.
This change is part of a succession plan developed by Marvin in concert with Concentric’s board of directors. He will serve as acting CEO until a successor is named, and will be an adviser to the new CEO during the transition. In his new role, he will oversee strategy formation, corporate finance, and communications activities, including mergers and acquisitions that align with Concentric’s short- and long-term business goals.
“Don will manage Concentric’s growth strategy in the biological and associated plant health markets,” said Jim Blome, independent non-executive chairman of Concentric’s board, who will assume a new role as independent lead director following the transition. Concentric plans to seek additional growth equity capital in the near future to fuel its global expansion plans.
During 2018, Concentric acquired ATP Nutrition, a producer of science-based essential plant nutrient products based in Oak Bluff, Manitoba. It also opened a 30,000-square-foot U.S. headquarters and commercialization office in Centennial, Colo., and doubled the size of its Montreal R&D Technical Center of Excellence to 20,000 square feet. Concentric said that it plans to add 20-25 high-level scientific and managerial professionals over the next 18-24 months.
Koch Leases Hastings, Neb., NH3 Facility
Koch Fertilizer LLC, Wichita, Kan., confirmed in late February that it has agreed to a multi-year lease with Equalizer Inc. for Equalizer’s ammonia storage terminal at Hastings, Neb. The site, which was formerly leased by CF Industries Holdings Inc., has 60,000 st of ammonia capacity, and Koch said product will be available immediately.
Equalizer purchased the former Farmland Industries Inc. facility at Hastings in 2003 (GM May 19, 2003), reporting at that time that the site comprised 293 acres, with four anhydrous ammonia storage tanks and two liquid fertilizer tanks. Koch said it is not leasing the UAN storage space at Hastings (GM Feb. 22, p. 6).
“Koch Fertilizer remains committed to meeting our customer’s ammonia needs, and this lease will enable Koch Fertilizer to maintain an adequate supply into that region,” Michelle Jones, Koch Communications Marketing Manager, told Green Markets. “We are aware of the announcement that Magellan plans to discontinue commercial operations of the ammonia pipeline beginning in late 2019. As we analyze the situation, we are working directly with our customers to continue serving their needs.”
According to its website, Equalizer is headquartered in Waco, Texas, and owns Texas terminals at Port Lavaca, Victoria, and Waco, in addition to the Hastings terminal. The company’s list of products and services includes fertilizer, frac sand management, loading and condo storage of bulk commodities, and barge, rail, and truck transportation.
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All information has been obtained by Green Markets from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Green Markets or others, Green Markets does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.
For additional details visit our Terms of Use.