All Posts from July 1, 2022

Bunge, UPL Create New Company in Brazil

Brazil, India, News, News Briefs, Western Cornbelt

Bunge Ltd., St. Louis, and India-based UPL Ltd. have announced an agreement to create Orígeo, a new company in Brazil that will combine Bunge’s expertise in financing, marketing, and logistics and UPL’s portfolio of sustainable agricultural inputs, solutions, and services.

Orígeo will serve farmers who already have relationships with Bunge and UPL in the region known as Mapitobapa, which comprises Maranhao, Piaui, Tocantins, Bahia, and Para states. It will offer inputs such as seeds, pesticides, bio-solutions, and fertilizers; assistance for crop planning; agronomic advice; sustainability consultancy and certifications in regenerative and low carbon agriculture; agricultural finance solutions; and harvest marketing and logistics services.

The company will also offer farmers digital agriculture services, including real-time information, recommendations, and alerts using field data collected by satellite.

This is just the latest move by Bunge into Brazil’s ag retail market. In January, it bought a 33% stake in Sinagro Produtos Agropecuarios SA of Mato Grosso (GM Jan. 21, p. 29) in order to strengthen its grain orientation strategy in the country. Sinagro is a major reseller of grains and agricultural inputs, with a significant presence in Brazil’s “Cerrado” savanna region. The deal was announced by the sellers – UPL and other shareholders. UPL invested in Sinagro in 2015.

Also, late last year Bunge signed a Memorandum of Understanding to buy a minority stake in Brazilian agricultural retailer Pantanal Agricola (GM Dec. 3, 2021). That transaction allows Bunge to intensify barter trading in the Center-West region, where Pantanal operates.

Bunge also plans to invest in Pantanal’s grain storage capacity and boost its potential growth. Pantanal Agricola, in business since 2001, operates in three states – Mato Grosso, Mato Grosso do Sul, and Goias – and 32 cities, selling fertilizer, seed, and crop protection products.

New Ostara Plant Expected Up in 3Q 2023; Capacity Put at 200,000 st/y

Featured, News, Phosphate, Specialty, Vancouver, Western Cornbelt

Ostara Nutrient Recovery Technologies, Vancouver, B.C., reported new details on its planned Crystal Green® production facility in St. Louis, saying it will have a capacity of 200,000 st/y and be up in third-quarter 2023.

“Ostara is excited to be bringing additional tons of Crystal Green to the market, as demand has continually outpaced supply,” said Ron Restum, Ostara Chief Commercial Officer. “The St. Louis facility is great news to North American farmers as we add needed tons to the market.

“Farmers really want a more efficient phosphate fertilizer option that feeds crops all season by avoiding nutrient loss through soil fixation, runoff, and leaching, and that’s Crystal Green,” he added. “The timing couldn’t be better, as the industry is looking for more locally produced fertilizers that avoid international supply chain issues. Additionally, the new plant will support much needed economic growth in the Midwest.”

Ostara purchased its St. Louis facility from Bruce Oakley Inc. in 2021, with plans to construct a state-of-the-art granulation facility to produce its fertilizers (GM July 16, 2021). It said last August that it planned to invest $25 million in the facility (GM Aug. 20, 2021). An Ostara spokesperson gave no update on that investment figure this week.

The new facility will add more than 40 jobs. The company is hiring in the manufacturing, sales, agronomy, and logistics departments. Restum said the company has already begun adding critical people to the team, and openings are regularly posted to the company website.

Ostara said the product will be shipped throughout North America, with ready access to the railway, barge, and trucks. The company currently operates a facility in Florida, but desired an additional presence in the central part of the country.

Ostara’s Pearl® technology recovers phosphorus and nitrogen from industrial and municipal water streams and transforms these nutrients into Crystal Green.

American Lithium Touts SOP in Peru

News, News Briefs, Peru, Specialty, Sulfate of Potash, Vancouver

American Lithium Corp. (ALC), Vancouver, B.C., announced on June 27 that it has validated a high purity, fertilizer-quality potassium sulfate (SOP) byproduct from the company’s Falchani Project in Peru. In addition to producing high-quality lithium compounds, the company said SOP can be produced to potentially supply Peru with its domestic needs.

Testing was completed at Australian Nuclear Science and Technology Organization (ANSTO) Minerals Business Unit laboratories in Sydney, Australia. The SOP produced by ANSTO from Falchani mineralization is 45% potassium and 20% sulfur and falls within the specification parameters of SOP marketed by various producers and traders, according to ALC.

“The strategic importance of the ability to produce significant amounts of SOP from Falchani cannot be overstated,” said Dr. Laurence Stefan, ALC Chief Operating Office. “This byproduct will not only provide an additional potential revenue stream at Falchani, but more importantly will also provide a major source of domestic SOP for Peru, with the potential to largely reduce the country’s dependence on imported overseas fertilizers.”

ALC said Peru imports over 60,000 mt/y of SOP. The company is also eyeing the extraction of other byproducts at the site, including cesium and rubidium.

In addition to Falchani, ALC also has the Macusani uranium project in Peru, as well as the TLC Lithium Claystone Project in the Esmeralda Lithium District in Nevada.

Compass Signs Lithium Offtake MOU

Lithium, News, News Briefs, South Korea, Southern Plains, Specialty

Compass Minerals, Overland Park, Kan., on June 29 announced the signing of a nonbinding Memorandum of Understanding (MOU) to supply LG Energy Solution (LGES), Seoul, South Korea, a global manufacturer of lithium-ion batteries, with a battery-grade lithium product from its lithium brine development project at its Ogden, Utah, solar evaporation facility (GM Oct. 29, 2021). Phase one of the Compass project is expected to come up in 2025.

“Our lithium vision is to support the North American battery market by accelerating the development of a sustainable and secure domestic lithium supply chain,” said Chris Yandell, Head of Lithium for Compass. “Entering into this commercial relationship with a proven manufacturing leader like LGES will help enable that vision, as well as assist LGES in solidifying its U.S. supply chain.”

“Securing key raw materials has become critically important, in order to maintain our lead position in the global battery market,” said Dongsoo Kim, Senior Vice President of Procurement Center at LG Energy Solution. “We believe partnering up with Compass Minerals will aid in achieving that goal while solidifying supply chain in the U.S.”

Under the agreement, Compass would commit, for up to seven years initially, at least 40% of its planned, annual phase one production to LGES starting in 2025. The MOU also includes an option for Compass to supply up to an additional 40% annually of the company’s phase two production once the project is at full scale.

The company previously announced an expected annual commercial production capacity of 30,000-40,000 mt of lithium carbonate equivalent (LCE) for the project, with an initial phase one capacity of up to 10,000 mt LCE. Purchase pricing would be based on market price and sales volume thresholds would be dependent upon product qualifications.

Compass is pursuing the sustainable development of an approximately 2.4 million mt LCE resource on the Great Salt Lake, readily available for extraction through existing permits, water rights, and operational infrastructure at the company’s Ogden facility. Compass has leveraged the high mineral concentrations of the GSL for over 50 years to produce sulfate of potash (SOP), salt, and magnesium chloride products.

Compass told Green Markets that the lithium production will not negatively impact the capacity of its other products. SOP capacity at the location is put at 320,000 st/y.

Compass said it will continue good-faith negotiations with LGES toward a binding supply agreement as part of the company’s broader lithium project commercial offtake strategy.

Despite the Compass news, LGES is currently reviewing the “unprecedented economic conditions and investment circumstances in the United States,” according to a June 29 Reuters report citing a statement by LGES. The company told the news services that the review would include a planned $1.3 billion investment in a new battery plant in Queen Creek, Ariz. The project was just announced in March.

LGES is building new battery plants with General Motors Co. in Ohio, Tennessee, and Michigan, and it has an existing plant in Michigan. It also has plants or projects in South Korea, China, Poland, Canada, and Indonesia.

K+S Inks MOP, SOP, Salt Deal with Cinis

Featured, Germany, News, Scandinavia, Specialty, Sulfate of Potash

K+S Group, Kassel, Germany, has signed a letter of intent (LOI) with Swedish green tech company Cinis Fertilizer, Lund, for future cooperation in the synthetic production of sulfate of potash (SOP). K+S would supply Cinis with potassium chloride, and in return K+S could purchase up to 600,000 mt/y of SOP from Cinis.

“The agreement fits perfectly with our new corporate strategy, which includes the expansion of our core business through cooperation,” said K+S Chairman of the Board of Executive Directors Dr. Burkhard Lohr. “As a result, K+S will secure additional quantities of the specialty fertilizer potassium sulfate. K+S will therefore be in an even better position to supply its customers, as well as to acquire new customers.”

“We are very proud to announce our cooperation with such a well renowned company as K+S,” said Jakob Liedberg, Cinis CEO and Founder. “This partnership will, together with our already signed intake and offtake agreements for our first two plants, secure both the MOP intake and the SOP offtake for our first four production plants, de-risking our business plan even further and proving that the fertilizer industry is ready for a more sustainable product.”

Cinis said the LOI states that K+S has the intention to buy the full SOP capacity from Cinis’s third and fourth production facilities, starting from 2026. The two production facilities are expected to reach full production of 600,000 mt/y of SOP in 2028.

Cinis is planning the synthetic production of SOP using the Glaserite process at several production sites in Scandinavia. In addition to potassium chloride supplied by K+S, the company will use residues from battery, pulp, and paper production as raw material and renewable energy. Salt is also generated as a byproduct in the SOP production.

K+S will supply up to 100% of the MOP needed for Cinis’s first four planned production facilities. In addition, it plans to buy the complete volume of salt from the first two plants, which are located in Örnsköldsvik and Skellefteå.

The parties said they will now continue the work to conclude binding agreements in the short-term, which will lead to a long-term relationship. The agreements are intended to be long-term for MOP, SOP, and salt.

As previously reported, The Netherlands-based Van Iperen International BV has exclusive rights to the SOP from the first two plants (GM Oct. 22, 2021). The company’s first 100,000 mt/y plant is expected up in second-half 2023, while the second will come on in mid-2025, with a capacity of 200,000 mt/y (GM May 20, p. 31).

Nutrien Acquires Brazil’s Marca Agro Mercantil

Brazil, Canada, Featured, News

Nutrien Ltd. on June 29 announced an agreement to acquire Marca Agro Mercantil, an agricultural inputs retailer that has been operating in Minas Gerais in Brazil for 17 years, operating in 67 municipalities, with seven stores in the regions of Triângulo, Alto Paranaíba, and Sudoeste Mineiro, and access to more than 1,700 customers.

After approval by the Administrative Council for Economic Defense (CADE), Nutrien said it will have 26 commercial units, including stores and experience centers, distributed throughout the state, and a fertilizer mixer in Araxá, in addition to 160 specialized consultants working in Minas Gerais.

“We are focused on increasing our operations in the most important regions for Brazilian agriculture and serving farmers with products, services and solutions to make them even more sustainable,” said André Dias, Nutrien’s President for Latin America. “The Agro Mercantil brand has an important presence in Triângulo Mineiro, one of the main agricultural regions in a state where we already have operations, bringing opportunities and synergies to our business and increasing our customer base. This acquisition allows us to have greater capillarity in the field to provide integrated and individualized solutions that promote the success of the Minas Gerais producer.”

While Nutrien did not report the terms of the Marca Agro deal, it has said it planned to spend R$600 million in 2022 on Brazil expansion (GM Dec. 17, 2021).

In Brazil, Nutrien Soluções Agrícolas is also present in the states of São Paulo, Mato Grosso do Sul, Tocantins, and Goiás, with 58 total commercial units, including stores and experience centers, two seed processing units, four fertilizer mixers, one nutritional factory, and more than 400 specialized consultants. The company has more than 1,500 employees.

Lawmakers Urge STB Action on Rail Service Issues; TFI Lauds Effort

News, News Briefs, U.S.

A bipartisan group of 51 lawmakers, led by Reps. Ralph Norman (R-S.C.) and Jim Costa (D-Calif.), sent a letter to the Surface Transportation Board (STB) on June 29 urging the agency to address “poor rail service” that has negatively impacted the shipment of fertilizer and other agricultural products.

The letter follows a series of emergency public hearings held by the STB in April to address rail service delays (GM April 29, p. 1). The April hearings came less than two weeks after CF Industries Holdings Inc. informed customers it serves by Union Pacific (UP) rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season (GM April 15, p. 1).

“At a time when global fertilizer supplies and global crop production are highly disrupted, imposing shipping curtailments on fertilizer inputs and grain, as recently proposed by Union Pacific, will cause major supply chain disruptions, hurt American farmers, and exacerbate the food crisis considerably,” the letter states. “We must ensure critical commodities reach essential industries and workers, such as America’s farmers, who are essential to feeding our nation and the world. Food is a national security issue, and we must treat it as such.”

While recommending no specific action, the letter warned that “onerous restrictions” placed by Class 1 railroads on shippers of agricultural commodities “may run the risk of jeopardizing family run farms and increasing the cost of food” for consumers.

“If Union Pacific continues down this path and other carriers follow suit, it will reduce crop production at a time when our nation and the world can least afford it,” the letter states. “As we work toward solutions to meet the ongoing supply chain challenges, carriers and the STB should also be mindful of essential commodities and our country’s best public interest.”

The Fertilizer Institute (TFI), which testified at the April hearings, issued a statement on June 30 praising the letter.

“With over half of all fertilizer moving by rail, we are grateful for the leadership of Congressmen Norman and Costa in bringing the issue of inconsistent rail service to the attention of the STB,” said TFI President and CEO Corey Rosenbusch. “Their dedication to working with all stakeholders will help ensure that essential crop nutrient inputs reach farmers when and where they need them.

“Fertilizer is attributable to half of all crop yields,” Rosenbusch continued. “With the world leaning on U.S. farmers now more than ever before to feed our growing population, we must ensure strong yields and our food security. Fertilizer must reach farmers in a timely manner and crop harvests also need to get to their destinations, including the kitchen table.”

Yara International ASA – Management Brief

Management Briefs, Scandinavia

Yara International ASA, Oslo, on June 28 announced that Pablo Barrera Lopez, who has held several executive positions with the company, has been named CEO of Haugaland Kraft, a leading Norwegian renewable energy company, starting Sept. 1.

Barrera’s executive positions in Yara include being a member of the Group Executive Board from 2018, with responsibility for Strategy, Communications, and Procurement. For the past year, Barrera has been seconded by Yara to lead the “Imagine Food Collective” as the Executive Director. In this role, he has worked with leading global companies and stakeholders to help drive systemic change of the food value chain.

Supreme Court Curbs EPA’s Climate Authority

News, News Briefs, U.S.

The U.S. Supreme Court in a 6-3 decision has restricted the U.S. EPA’s authority to curb greenhouse gases from power plants, siding with coal-mining companies and Republican-led states in a blow to President Joe Biden’s climate-change agenda.

Writing for the court, Chief Justice John Roberts said Congress needs to speak more explicitly to give an agency that much power. “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.”

The ruling casts fresh doubt on Biden’s pledge to reduce U.S. emissions in half by the end of the decade and his goal of a carbon-free electric grid by 2035. Hitting those targets will be impossible without regulations to stifle greenhouse gases from oil wells, automobiles, and power plants, as well as tax incentives designed to spur clean energy, according to several analyses.

A White House spokesperson characterized the ruling as a devastating decision that damages the administration’s ability to address climate change. The White House also called on Congress to act, something the high court decision left as a possibility.

Roberts pointed to a “major questions” doctrine, saying “we presume that Congress intends to make major policy decisions itself, not leave those decisions to agencies.” However, in the past, the court has opted for the Chevron doctrine, which says courts must defer to agencies’ reasonable interpretation of laws passed by Congress.

Under Chevron rules, the court could have said that, since Congress’s grant of statutory authority to EPA was ambiguous, it would allow the EPA regulation applying that grant to stand.

The court’s reasoning could spur challenges to other federal regulations, from EPA automobile emissions curbs to vaccine mandates from the Centers for Disease Control, particularly when issues of congressional authorization are involved.

The court’s three Democratic-appointed justices – Stephen Breyer, Sonia Sotomayor and Elena Kagan – blasted the ruling. In a dissent by Justice Kagan, she said, “The Court appoints itself – instead of Congress or the expert agency – the decision maker on climate policy. I cannot think of many things more frightening.”

Corn and Cotton Acreage Up, Soybeans and Wheat Down from USDA’s March Projections

News, News Briefs, U.S.

The USDA’s June 30 Acreage Report pegged planted corn acreage in the U.S. at 89.9 million acres this year, up slightly from the 89.5 million acres projected in the March 31 Prospective Plantings report (GM April 1, p. 1) but down 4%, or 3.44 million acres, from last year.

The slight uptick in corn acreage came at the expense of soybeans. Soybean planted area for 2022 was estimated at 88.3 million acres, down sharply from the March Prospective Plantings estimate of 91.0 million acres, but up 1% from last year and still the third largest crop on record.

Compared with last year, USDA said planted soybean acreage is up or unchanged in 24 of the 29 reporting states, while planted corn acreage is down or unchanged in 35 of the 48 reporting states. States including Minnesota and Wisconsin saw robust jumps in corn acres versus the intended planting estimates from March, but North Dakota had a 17% drop in planned acreage due to wet weather during planting.

Chicago corn fell to its lowest level since early February after the report’s release, Bloomberg reported. Most-active corn ended the day down 5.2% at $6.1975 a bushel, with the futures ending June with their steepest monthly decline since 2011. Soybeans settled 1.4% lower at $14.58 a bushel, its biggest monthly drop in four years, Bloomberg reported.

All wheat planted area for 2022 was estimated at 47.1 million acres, down from the March estimate of 47.4 million acres, but up 1% from 2021. If realized, USDA said this represents the fifth lowest all wheat planted area since records began in 1919. All cotton planted area for 2022 was estimated at 12.5 million acres, up 11% from last year and also rising from the March estimate of 12.2 million acres.

USDA signaled that more revisions may be coming later in the season. In a special note within the report, it said some farmers turned in surveys even though planting wasn’t completed by mid-June. The agency said it is collecting additional data on crops – including corn, soybeans, wheat, and canola – that will be published in August.

USDA’s National Agricultural Statistics Service (NASS) also released its quarterly Grain Stocks report on June 30. Corn stocks as of June 1, 2022, totaled 4.35 billion bushels, up 6% from the same time last year; soybeans stored totaled 971 million bushels, up 26% from last year; and all wheat stored totaled 660 million bushels, down 22% from a year ago.

The wheat stockpiles estimate was higher than the Bloomberg survey’s average of 655 million bushels. Soybean and corn quarterly stocks came in a tad higher than expected as well. Chicago wheat futures for September tumbled 4.9% to $8.84 a bushel, Bloomberg reported, the lowest since late February.

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