Low water creates headaches on Lower Miss

Memphis — Low water levels on the Lower Mississippi River continued to limit barge unloading at many terminals. A rise of six feet in the river late the previous week – the result of up to two inches of rainfall in parts of the Ohio Valley – allowed some unloading at Memphis, but the rise was only temporary, and receding levels once again prevented unloading after only a day or two. “It’s a mess. The whole situation is taking its toll on us,” said one source, who reported product outages at the Memphis terminal last week. “I either have to rail it in, and rail rates just don’t work in most cases. If we don’t get some moisture we’re not going to need anything anyway.” Another industry source noted that “some have rail capability and some don’t, but it’s hard to switch from barge supply to rail. You can’t just flip a switch.” Terminal unloading in Louisiana and Mississippi was also “on again, off again,” according to one industry contact. In Lake Providence, La., a temporary rise allowed some barge unloading for several days in early August, but that was followed by another drop that shut the port down again last week. Loaded grain barges had to be lightened to reach dredged areas at the mouth of the harbor, according to sources, and then reloaded. One contact in that location said sediment left by last year’s flood has choked the harbor entrance, making it difficult for barges to enter. The same was reported in Greenville, Miss. “It’s not so much that (river levels) are at an all-time low,” the source observed. “It’s just that the low is higher.” The situation was similar at upriver points near the confluence of the Ohio and Mississippi. “Everyone felt good about ending the spring empty, but now what are we going to do?” said one industry contact last week. North of St. Louis, the lock system was keeping the river navigable in early August.

The Week in Fertilizer Stocks

The Week in Fertilizer Stocks

Producer Symbol Price Week Ago Year Ago
Agrium AGU 97.34 94.19 80.55
CF Industries CF 212.86 194.39 148.62
CVR Partners UAN 25.40 25.73 20.74
Intrepid Potash IPI 22.28 22.01 27.36
Mosaic MOS 58.65 56.99 60.93
PotashCorp* POT 43.09 42.67 52.44
Rentech Nitrogen RNF 32.44 30.32 N/A
Terra Nitrogen TNH 236.10 226.20 145.70
Distribution/Retail
Andersons Inc. ANDE 36.60 37.45 39.23
Deere & Co. DE 78.68 76.41 70.93
Scotts SMG 41.39 39.03 42.83
* represents three-for-one stock split

Agencies preparing EIS for Agrium mine

Several federal agencies have recorded in the Federal Register their intent to prepare an Environmental Impact Statement (EIS) for Agrium Inc.’s newest proposed open pit mine operation in Southeast Idaho’s phosphate-rich Caribou County. The U.S. Department of the Interior, the Bureau of Land Management’s Pocatello Field Office, and the U.S. Forest Service’s Caribou-Targhee National Forest will jointly prepare an EIS to determine and analyze the effects of a proposed phosphate mine and reclamation plan on federal mineral leases held by Nu-West Mining Inc., doing business as Agrium Conda Phosphate Operations.

Agrium’s proposed mine plan includes two different mining areas separated by the historic, now inactive, Maybe Canyon Mine, parts of which are undergoing investigation and remediation through the Comprehensive, Environmental Response, and Liability Act (CERCLA), or Superfund, process.

The Husky 1-North Dry Ridge Phosphate Mine Project area is about 19 miles northeast of Soda Springs. It is anticipated that mining of the North Dry Ridge deposit will occur for about 2½ years, followed by about 11 years of mining operations on the Husky 1 deposit.

The proposed Husky 1-North Dry Ridge Mine Project would include an open pit phosphate mine, including stockpiles, temporary and permanent overburden storage areas, storm water retention ponds, and mine pit backfill areas; haul roads; equipment staging areas; and re-routing an existing national forest system road.

Agrium proposes building new facilities associated with its mining operations, including fuel storage area and dust suppression wells with water fill stands. Existing offices and shops at the nearby Dry Valley Mine also would be used.

The EIS will analyze a proposed disturbance of about 1,052 acres on private and national forest system lands – about 646 acres on three existing leases, 397 acres on requested lease modifications and special use authorizations, and about nine acres off lease on private lands.

Three existing leases contain 3,027 acres. To maximize phosphate mineral recovery, Agrium has proposed lease modifications or enlargements to both the Husky 1 and North Dry Ridge leases, totaling 470 acres. Agrium also has requested off-lease special use authorizations covering 395 additional acres to accommodate access roads, storm water retention facilities, and staging areas.

Within the disturbance area on national forest system lands, about 65 acres are in the Dry Ridge inventoried roadless area. The proposed action is consistent with the exemptions for phosphate mining within the general forest, rangeland, and grassland theme of the 2008 Idaho Roadless Rule.

The proposed mining sequence is to mine the North Dry Ridge and Husky 1 consecutively, but with some transitional overlap. Mining will begin in the North Dry Ridge area and then progress to the Husky 1 as production at North Dry Ridge slows.

The EIS will address potential impacts to water quality from dissolved metals, including selenium. Agrium has proposed to implement practices designed to reduce, eliminate, or mitigate these impacts. Suitable soil or other growth media would be salvaged from disturbed areas for use in reclamation.

Concurrent mine reclamation would include backfilling pits as mining progresses, grading slopes, capping overburden disposal areas and pit backfills, re-establishing drainages, spreading seeds, stabilizing surfaces, promoting re-vegetation, and testing and treatment for remaining contaminants. Environmental monitoring would be performed to ensure impacts do not exceed those authorized.

Issues initially identified for the proposed mining include potential effects on groundwater and surface water quantity and quality; absorption of contaminants by vegetation; loss of soil and mineral resources; changes to air quality; loss of wild

Wilbur-Ellis, PCS Sales expand relationship

Portland — Wilbur-Ellis Co., a marketer and distributor of value-added animal feed ingredients in North America and Asia-Pacific, reports that in recent months it has expanded relationships with key suppliers and its portfolio offerings for its Feed Asia business. This includes PCS Sales, a unit of Potash Corp. of Saskatchewan Inc. and a producer of monocalcium phosphate, which has expanded its relationship with Wilbur-Ellis beyond Indonesia to include distribution in Thailand, the Philippines, and Vietnam. PCS makes the product at its Marseilles, Ill., facility. Wilbur-Ellis established the Feed Asia unit in June 2010 to combine its Feed Division’s sourcing and marketing expertise with the resources and broad footprint of its Connell Brothers Division in Asia-Pacific. Feed Asia currently has distribution locations in Australia, China, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Taiwan, Thailand, and Vietnam.

Fert exec pleads guilty to fraud

Fresno, Calif. — Fertilizer business owner Kenneth Noel Nelson Jr. will be sentenced Nov. 5 after pleading guilty to four counts of mail fraud in connection with a scheme to defraud organic farmers and other customers. According to the United States attorney’s office here, Nelson Jr., 59, of Bakersfield, faces up to 20 years in prison, a $250,000 fine on each mail fraud count, and up to three years of supervised release. Nelson admitted that from 2003 to January 2009 he defrauded farmers and distributors through his company, Port Organic Products Ltd., and affiliated businesses by manufacturing and selling fertilizers with synthetic materials such as aqueous ammonia, ammonium sulfate, and urea not permitted in organic fertilizers or organic agriculture, and submitted false applications and documentation to have his fertilizers listed as organic by the Washington State Department of Agriculture and the Organic Materials Review Institute. According to U.S. Attorney Benjamin Wagner, “Consumers pay a premium for organic products, and they should not be misled by companies that seek to profit by falsely categorizing their products as organic. We will continue to work with USDA investigators and with the FBI in examining production and labeling practices in the organic fertilizer industry.”

Chemtrade reports 2Q results

Toronto — Chemtrade Logistics Income Fund reported net income of C$8.5 million on sales of $227.5 million for the second quarter ending June 30, 2012, down from the year-ago $35.6 million on sales of $195.2 million. The lower earnings resulted primarily from an income tax recovery of $37.5 million in the year-ago quarter. Sales were up due to acquired assets, as well as increased volumes and prices for sulfuric acid in North America. Six-month income was $12.7 million on sales of $455.4 million, down from the year-ago $49 million on sales of $364.8 million.

Innophos 2Q income off 20 percent

Cranbury, N.J. — Specialty phosphate producer Innophos Holdings Inc. reported net income of $16.5 million ($0.73 per diluted share) on sales of $214.2 million for the second quarter ending June 30, 2012, compared to the year-ago $20.7 million ($0.92 per share) on sales of $201.6 million. Operating income from the Specialty Phosphate segment was up, at $28.8 million on sales of $194.1 million from the year-ago $27.7 million on sales of $170.6 million. Income from the GTSP/Other segment was in the loss column at $2.5 million on sales of $20.1 million, versus the year-ago positive $4.9 million on sales of $31 million. Innophos six-month net income was $44.1 million ($1.94 per share) on sales of $442.4 million, versus the year-ago $46.7 million ($2.06 per share) on sales of $399.2 million. Six-month Specialty Phosphate income was $55.8 million on sales of $386.6 million, up from the year-ago $52.8 million on sales of $346.4 million. GTSP/Other posted income of $2.1 million on sales of $62.3 million, down from $11.9 million on sales of $61.5 million.

Scotts donates to Romney PAC

Marysville, Ohio — The Scotts Miracle-Gro Co. donated $200,000 in June to the Restore Our Future super PAC, which supports Republican presidential nominee Mitt Romney. The news raised eyebrows, as Scotts is a public company with well-known public brands that could conceivably suffer if consumers disagreed with those donations, much in the same way as Chick-Fil-A has become a target in recent weeks. A company spokesman said it was Miracle-Gro Chairman and CEO Jim Hagedorn’s policy to donate in the light of day. Likewise, he said the company would benefit from Romney’s policies on corporate tax reform, business regulation, and federal spending, as well as its assessment that Romney could revive the economy. Hagedorn, however, does not have a record of being a strict partisan, as he publically supported former Ohio Gov. Ted Strickland in his failed attempt at re-election in 2010. Hagedorn has raised controversy before, telling The Wall Street Journal that he wanted the Scotts to target the marijuana market (GM June 20, 2011, p. 12). The company later downplayed the remarks.

Scotts 3Q income off; fert not meeting expectations

Marysville, Ohio — The Scotts Miracle-Gro Co. reported net income of $93.3 million ($1.50 per diluted share) on sales of $1.06 billion for the third quarter ending June 30, 2012, compared to the year-ago $111.6 million ($1.69 per share) on sales of $1.06 billion. “After a strong start to the season, consumer engagement clearly began to decline in May and June,” said Jim Hagedorn, Scotts chairman and CEO. “We’re pleased to see strong year-over-year improvement in consumer purchases of mulch and controls, but our fertilizer and growing media categories are flat so far this year and have not delivered the results expected.” Other factors impacting earnings included commodity costs, advertising, freight for expedited shipments to meet strong March demand, costs associated with innovation in the Ortho product line, and unfavorable product mix. Hagedorn said the company is focused on several initiatives to improve margins and reduce expenses, including price increases. “While we will continue to evaluate acquisition opportunities, our near-term focus will be on restoring our current business to an appropriate level of profitability, not on integrating something new.” Nine-month net income is off 34 percent to $146.6 million ($2.36 per share) on sales of $2.45 billion, compared to the year-ago $221.3 million ($3.37 per share) on sales of $2.42 billion.

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