All Posts from April 1, 2013

Company announces plans to build small N plants at North Dakota ethanol facilities

Agrebon Inc., a Colorado-based manufacturer of renewable fertilizers, announced that it has entered into an agreement with Progressive Nutrient Systems LLC (PNS) to build several small-scale nitrogen fertilizer plants in North Dakota.

The plants will be developed by PNS, a new company based in Fargo, N.D., and will be located adjacent to ethanol production facilities throughout North Dakota. The facilities will be managed by Agrebon and will use the company’s technology, which converts ethanol byproducts and other waste streams into low-carbon, nitrogen-based fertilizer.

Agrebon said the goal of the project is to reduce the carbon footprint of corn-based ethanol production while also providing a local supply of fertilizer to area farmers.

“Agrebon offers a disruptive technology to drastically improve how ethanol is produced and how farmers gain access to fertilizer,” said Justin Eisenach, Agrebon CEO. “It has global potential to change the way we live. That’s why we like to call it the ‘iPad of the industry.’”

The first two plants, which the companies describe as “modules,” will be located at ethanol production facilities near the North Dakota towns of Casselton and Hankinson. Eisenach told Green Markets that the plants will be capable of producing 20 st/d of ammonia or 35 st/d of urea, with the end product determined by the local market.

“One plant will do about 70,000 acres of corn, but we can design the fertilizer for that growing region,” he said. “What farmers need in eastern North Dakota is different than what they need in western North Dakota.”

Plans are for the first facilities to be up and running by the first quarter of 2014. The companies hope to construct more plants throughout North Dakota, and Eisenach said there are also plans pending for one location in Illinois.

“This type of distributed concept is new for the fertilizer industry, meaning it goes where there’s an underutilized methane source, whether it’s an ethanol plant or stranded natural gas or a covered lagoon from a food processing plant,” Eisenach said. “When you take stranded methane resources that are undervalued and underutilized, you can get attractive pricing that is not subject to the volatility of natural gas.”

North Dakota’s six-member Renewable Energy Council (REC) voted unanimously in November 2012 to approve a $431,000 grant to PNS for the $1 million engineering phase of the project, pending the completion of a feasibility study and the receipt of letters of support from ethanol producers and the Energy and Environmental Research Center in Grand Forks, N.D. Eisenach said those contingencies have been met and the funding has been awarded.

At the REC meeting in November, Dan Olson, CEO of PNS, was queried on how many nitrogen plants the company plans for North Dakota, what effect the plants would have on local fertilizer prices, and whether CHS Inc.’s plan to build a major nitrogen facility in the state (GM Sept. 13, 2012) would impact demand and prices for the fertilizer products produced by the smaller plants.

“The only concern is regarding the economic feasibility of the fertilizer production,” one REC member said. “Will the applicants’ production of bio]fertilizer be cost]competitive with fertilizer produced by larger manufacturers? Will local farmers be willing to pay a slightly higher price for fertilizer produced by PNS/Agrebon compared to fertilizer prepared by larger manufacturers?”

Olson told the REC that PSN and Agrebon expect to build up to 15 of the plants in North Dakota, with multiple modules at some ethanol production sites. While acknowledging that fertilizer prices might be slightly higher from the smaller plants, he said local farmers will have eq

Mosaic 3Q income up 26 percent; P&K volumes up, prices down

The Mosaic Co. reported a 26 percent increase in net income attributable to Mosaic for the third quarter ending Feb. 28, 2013, to $344.6 million ($0.81 per diluted share) on sales of $2.24 billion, compared to the year-ago $273.3 million ($0.64 per share) on sales of $2.19 billion. Operating income was $419.1 million, up from $413.7 million.

Third-quarter potash volumes soared to 1.77 million mt with an average MOP FOB plant price of $385/mt, compared to the year-ago 1.1 million mt and $453/mt, respectively. The average offshore price was $325/mt and North American crop nutrient $434/mt, versus the year-ago $411/mt and $531/mt, respectively. Potash gross profit was $308 million on sales of $758 million, up from the year-ago $270 million on sales of $553 million. Operating earnings were $216 million, down 8 percent from the year-ago $234 million. The current quarter included some $42 million in charges relating to the settlement of potash antitrust litigation. Production was 2 million mt, or 78 percent of capacity.

Third-quarter phosphate volumes were 2.64 million with an average DAP FOB plant price of $496/mt, versus the year-ago 2.59 million mt and $536/mt. Gross margin was $266 million on sales of $1.5 billion, up from the year-ago $259 million on sales of $1.65 billion. Operating earnings were $197 million, up from the year-ago $190 million. Finished phosphate production was 2.1 million mt, or 87 percent of operational capacity. Phosphate rock production was 3.6 million, up from 2.9 million mt. Average ammonia market prices were $665/mt, up from the year-ago $524/mt, while sulfur prices were down to $157/lt from $204/lt.

Nine-month income was down slightly, to $1.4 billion ($3.29 per share) on sales of $7.3 billion from the year-ago $1.42 billion ($3.24 per share) on sales of $8.3 billion. Operating income was down at $1.59 billion from the year-ago $1.94 billion.

Mosaic expects its fourth-quarter phosphate prices to be flat, and that India will come back into the market toward the end of the quarter – May. Sales volumes are expected to be 2.6-2.9 million mt, with average prices in the $475-$505/mt range. Margins are expected to be flat, with operating rates exceeding 85 percent.

Total sales potash sales volumes are expected to range from 2.3-2.6 million mt, with FOB prices in the $350-$380/mt FOB range, reflecting a substantially higher mix of standard product. Fourth-quarter operating rates are expected to be above 85 percent.

USDA raises 2013 corn planting estimate to 97.3 M acres

USDA’s March 28 Prospective Plantings report says U.S. corn growers intend to plant 97.3 million acres of corn for all purposes in 2013, up slightly from last year and 6 percent higher than in 2011. If realized, USDA said this will represent the highest planted acreage in the U.S. since 1936, when an estimated 102 million acres of corn were planted.

The projection is also up from USDA’s last official estimate in late February, which pegged the 2013 U.S. corn crop at 96.5 million acres (GM Feb. 25, p. 13). The aggressive corn planting picture continues to fuel expectations for brisk fertilizer demand this spring, provided fields dry out and growers are able to begin planting in a timely fashion.

USDA estimated the soybean planted area for 2013 at 77.1 million acres, down slightly from last year but still the fourth highest on record. The projection is also down slightly from USDA’s February estimate of a 77.5 million-acre soybean crop in 2013.

Compared with 2012, USDA predicted that planted soybean area will be down across the Great Plains, with the exception of North Dakota. Nebraska and Minnesota are expecting the largest declines compared with last year, USDA reported, while Illinois and North Dakota are expecting the largest increases.

All wheat planted area for 2013 is estimated at 56.4 million acres, up 1 percent from 2012 and up slightly from USDA’s February estimate of 56 million acres. USDA estimated the 2013 winter wheat planted area at 42 million acres – 2 percent above last year, and up slightly from the previous estimate. Of this total, about 28.9 million acres are hard red winter, 9.67 million acres are soft red winter, and 3.39 million acres are white winter wheat.

Area planted to other spring wheat for 2013 is expected to reach 12.7 million acres, up 3 percent from 2012. Of this total, about 12.1 million acres are hard red spring wheat. The intended durum planted area for 2013 is estimated at 1.75 million acres, down 18 percent from 2012.

The anticipated increase in corn and wheat acreage is taking a toll on other crops, however. USDA said all cotton planted area for 2013 is expected to total 10 million acres, down 19 percent from last year’s 12.32 million acres. Barley producers intend to seed 3.63 million acres in 2013, down slightly from last year, and potentially the fifth smallest seeded barley crop on record.

USDA said canola producers intend to plant 1.65 million acres in 2013, down 6 percent from 2012, but still the second largest planted area on record. Dry bean growers intend to plant 1.5 million acres in 2013, down 14 percent from last year. Area planted to sugar beets in 2013 is expected to total 1.21 million acres, down 2 percent from 2012.

U.S. rice acreage in 2013 is projected at 2.61 million acres, down 3 percent from last year’s 2.7 million acres. “Higher prices for competing commodities contributed to the expected decline in rice acres compared with last year,” USDA said. “Area planted to rice in Arkansas, the largest rice-producing state, is 5 percent below the previous year. In Mississippi, growers intend to plant 8 percent fewer acres to rice than in 2012. In Texas, where drought conditions persist, a record low acreage is expected to be planted.”

Peanut growers intend to plant 1.19 million acres in 2013, down 27 percent from last year, with the decrease driven largely by lower peanut prices and high supply. Sunflower growers intend to plant a total of 1.68 million acres in 2013, down 12 percent from last year and the lowest since 1976, if realized.

Area seeded to oats in 2013 is expected to total 2.9 million acres, up 5 percent from 2012, but still the third lowest U.S. total on record. Hay producers intend to harvest 56.4 million acres of all hay in 2013, up slightly from 2012.

USDA’s estimate for the