Land O’Lakes Inc., Arden Hills, Minn., reported third-quarter net earnings attributable to the cooperative of $11.7 million on net sales $2.98 billion, down from the year-ago $25.8 million and $3.21 billion, respectively. Nine-month earnings for the period ending Sept. 30, 2019, were $150.4 million on sales of $10.3 billion, down from the year-ago $208.8 million and $11.34 billion, respectively.
“In the context of global economic headwinds, catastrophic weather, and increasing uncertainty about the future of rural America, Land O’Lakes has turned to demand creation, digital platform development, and an aggressive focus on customer segmentation to support strong sales,” said Beth Ford, Land O’Lakes President and CEO. “Maintaining and expanding our market position, and advocating for the American farmer, remain key focuses for our cooperative into the fourth quarter and beyond.”
The cooperative said its Crop Inputs segment benefited from recent cost reductions, which helped to offset the impact of a compressed planting season resulting in fewer planted acres and lower sales of crop protection products.
Earnings in Dairy Foods were down for the quarter as a result of lower margins within the retail segment, higher costs related to the expansion of the Kiel, Wisc., facility, and margin compression in global dairy ingredients driven by higher input costs. Performance in Animal Nutrition was lower due to increased forage availability in the Southwest, which impacted demand.
Chemtrade Logistics Income Fund, Toronto, saw a slight dip into the loss column for the third quarter ending Sept. 30, 2019, to C$163,000 ($0.00 per diluted unit) on revenue of $395.6 million from the year-ago net earnings of $9.2 million ($0.10 per unit) and $418.2 million, respectively. Adjusted EBITDA was $90 million, up from $53.8 million.
“Our
results for the third quarter reflect a continuation of the operating
conditions we experienced in the second quarter,” said Chemtrade President and
CEO Mark Davis. “In general, all our plants operated well. We are continuing to
see the benefits of the initiatives we took last year to strengthen our
operations and adjust to changing market conditions. This is most evident in
our SPPC (Sulfur Products & Performance Chemicals) segment that continues
to benefit from changes we made to our operations and from strong selling
prices for sulfuric acid.
“In
our WSSC (Water Solutions & Specialty Chemicals) segment, water treatment
products continue to improve margins as pricing in contract renewals more than
offset raw material cost increases. Our EC (Electrochemicals) segment continued
to be negatively affected by low caustic soda and HCl prices,” he continued.
“Our
SPPC segment and water products continued to perform well in the third quarter,”
added Davis. “The biggest impediment to better financial results was caustic
soda prices. Although current prices are disappointing, the long-term outlook
remains positive.”
Despite
the near-term weakness in chlor-alkali products, Chemtrade is maintaining its adjusted
EBITDA guidance of $335-$375 million for 2019, although it expects that results
will be at the low end of the range.
Distributions
declared in the third quarter totaled $0.30 per unit.
Chemtrade reported a nine-month loss at $87.1 million ($0.94 per unit) on revenue of $1.2 billion from the year-ago net loss of $34.3 million ($0.37 per unit) and $1.2 billion, respectively. Adjusted EBITDA was $225.3 million up from $131.2 million.
Chemtrade had no update or comment
to analysts on the August announcement that it plans to sell its specialty
potassium and adjuvant units (GM Aug.
16, p. 1). Both units are within Chemtrade’s WSSC
segment. The company said $204.5 million of assets, along with $17.3 million of
liabilities directly associated with these assets, have been presented as held
for sale. Chemtrade said the two businesses generated
some C$14 million in adjusted EBITDA for the year ending June 30, 2019.
Chemtrade said the sale will
allow the company to pay down long-term debt, strengthen its balance sheet, and
provide added flexibility to pursue further organic and other growth
opportunities.
The Potassium Chloride business, based in Midlothian, Texas, produces high-purity products used for the pharmaceuticals, nutraceuticals, food applications, and metal refinement industries. Chemtrade said it is the sole North American-based manufacturer of an Active Pharmaceutical Ingredient (API) class potassium chloride product supported by an active Drug Master File, and has a specialized production process that creates crystals that are ideal for time-release applications.
The company said its product is also used in
high-end metal refinement, particularly for tantalum, which is used in semi-conductors
found in electronic products such as cell phones. It said potash is its main
raw material for its specialty products.
The Vaccine Adjuvant unit is based in Berkley
Heights, N.J., and its aluminum-based products are used to improve the efficacy
of animal and human vaccines.
After
much anticipation, UAN barge prices moved down during the week, with a large
quantity of product reported to have traded at the $145/st ($4.53/unit) FOB
level, down from the earlier $150-$155/st ($4.69-$4.84/unit) FOB. There were
unconfirmed reports of $140/st FOB, as well.
East
Coast vessel pricing remained at $155-$160/mt CFR.
U.S. Imports:
UAN
imports surged 116 percent in September, to 207,640 st from the year-ago 96,010
st. July-September imports were up 40 percent, to 726,226 st from the year-ago
519,029 st.
U.S. Exports:
September
UAN exports were down 63 percent, to 53,253 st from the year-ago 143,086 st.
July-September exports were off 38 percent, to 324,925 st from 520,542 st.
Eastern
Cornbelt:
The
UAN-32 market was unchanged at $185-$205/st ($5.78-$6.41/unit) FOB regional
terminals in the Eastern Cornbelt, depending on location, with the low
confirmed at Cincinnati and Mount Vernon, Ind., and the high reported for
brokered tons out of spot Illinois River terminals. UAN-28 pricing FOB
Cincinnati was steady at $160-$162/st ($5.71-$5.79/unit) FOB.
Western Cornbelt:
UAN-32
remained at $185-$210/st ($5.78-$6.56/unit) FOB in the Western Cornbelt, with
the low reported at St. Louis and the upper end out of spot Iowa terminals for
November-February shipment.
Northern Plains:
UAN-32
was quoted at a nominal $200-$215/st/st ($6.25-$6.72/unit) FOB in the Minnesota
market, while North Dakota sources reported limited delivered UAN-28 offers as
high as $230-$235/st ($8.21-$8.39/unit) to central and western areas of the
state.
Great Lakes:
UAN-28
was quoted at $185-$197/st ($6.61-$7.04/unit) FOB in the Great Lakes region,
largely unchanged from last report, with Michigan terminal generally pegged in
the $190-$197/st ($6.79-$7.04/unit) FOB range at mid-month.
Northeast:
The
UAN-32 market in the Northeast was pegged at $170-$175/st ($5.31-$5.47/unit)
FOB Baltimore, Md., in mid-November, down $5-$10/st from last report. Pricing
out of terminals in upstate New York was quoted at the $219/st ($6.84/unit) FOB
level, reflecting a $5/st drop.
The
Tampa market continued to be called $260/mt CFR, with the NOLA barge market
unchanged at $245/st FOB.
Most
players continue to be hesitant to weigh in on December price ideas for Tampa,
although a recent Algerian sale to Nutrien at a reported $240/mt FOB would
reportedly equate to the U.S. at $275-$280/mt CFR. In the meantime, market
bears continue to question the strength of the U.S. fall ammonia season.
U.S. Imports:
September
ammonia imports were up 16 percent, to 235,948 st from the year-ago 203,679 st,
according to the U.S. Department of Commerce. July-September imports were off
10 percent, however, to 636,289 st from the year-ago 710,101 st.
U.S. Exports:
Ammonia
exports saw a significant bump in September, to 52,430 st from the year-ago
7,046 st. July-September exports were off 33 percent, however, to 99,293 st
from 147,583 st.
Eastern Cornbelt:
The
ammonia market was quoted at $380-$400/st FOB in the Eastern Cornbelt, with the
low reported in the Ohio market on a spot basis, and the upper end out of
Indiana terminals. Most Illinois terminals remained at the $390/st FOB level at
mid-month.
Western Cornbelt:
The
ammonia market remained at $380-$390/st FOB in the Western Cornbelt, depending
on location, with the lower end in Nebraska and the higher numbers out of Iowa
terminals. Sources reported some fall application activity, but the pace
remained slow.
“We
hear spotty reports of ammonia moving from Canada into the States as the
Canadian fall ended early,” commented one source. “The ground temperatures can
still accept ammonia, which is a long way of saying there are problems but we
have a ways to go before the fat lady sings.”
Northern Plains:
Ammonia
pricing continued to be quoted at $365-$390/st FOB in the Northern Plains,
depending on location, with the low reported at Beulah, N.D., and the high at
Velva, N.D. Delivered ammonia was pegged in the $383-$415/st range in the
region at mid-month, but sources reported very little buying going on.
The
region has experienced a disappointing fall fertilizer season. “Fall harvest
and application have gone terribly,” commented one source, who added that there
is “no real optimism” for the remainder of the season.
“We
are going to be in for a mad spring rush,” commented another regional contact.
“Very little fall tons have
moved, so there will be some storage or repricing, but no programs are out
yet.”
Great Lakes:
The
anhydrous ammonia market ranged from $380-$400/st FOB in the Great Lakes
region, with the low reported at Lima, Ohio, and the high for fall tons FOB
Huntington, Ind., and Courtright, Ont., to Michigan buyers.
Arab Gulf:
Traders said ammonia producers have plenty of material
on hand, but not enough buyers. Reportedly, buyers are now pushing for $230/mt
FOB for spot material. Sources said this price has not yet been achieved, but it
could only be a matter of time before the excess ammonia held by producers
forces a price drop.
The last report from sources puts the spot market in
the low-$250s/mt FOB, with contracts at $230-$235/mt FOB.
Black Sea:
Sources said Trammo was able to push down prices.
Traders now said the Yuzhnyy price is $220-$225/mt FOB for tons slated to be
shipped in early December.
Traders said there still appears to be room for a
further drop in prices. Demand for ammonia is not as great as supply. With
plants in the Arab Gulf and North Africa coming back online for December
shipments, the Yuzhnyy suppliers are facing serious competition for spot market
sales into Turkey and other locations easily accessible from North Africa.
One trader said this latest deal out of Yuzhnyy has
traders acting as depressed as the prices.
North Africa:
Sorfert reported that it sold a cargo of 25,400 mt to
Nutrien at $240/mt FOB. Sources said the price reflects the long position that Sorfert
is in as more plants in the area come back online and into full production.
At the same time, OCP claims it bought a cargo from
Trammo at $245/mt CFR. Trammo has also told industry watchers that it picked up
a cargo from Libya, but the company did not reveal the selling price.
Northwest Europe:
Pricing is still up in the air as the industry waits
for the future Baltic prices to be set. Talks for December shipments have not
yet begun, but sources said they expect the parties to start getting together
next week.
In the meantime, the Antwerp price is currently pegged
at $280/mt C&F based on the latest deals coming out of Yuzhnyy and from
discussions with traders looking for opportunities out of Baltic ports.
India:
Sales have slackened off except for already committed
cargoes. The last bit of spot business puts the price at around $295/mt CFR.
Industry sources said any new deals would end up being closer to $290/mt CFR. Contracted
tons are now pegged in the $250s/mt CFR, reflecting the ever-softening market.
Southeast Asia:
An auction of 15,000 mt by Kaltim was scrapped.
Sources said if the bids are just shy of the reserve price, Kaltim will engage
in negotiations and try to ease the price up a bit and close the deal. This
time, however, sources said the bids must have been so low that no amount of
talking could close the gap.
Officially,
Kaltim claims its ammonia is going for $260/mt FOB, but that was a long time
ago, said one trader.
Helm Agro US Inc., Tampa, Fla., recently announced
that it has hired Aaron Locker as
Vice President of Sales for the organization’s U.S. business. Locker will be
responsible for the leadership, planning, and execution of crop protection
product sales and channel partner programs for the company’s distributor and
retailer networks.
Locker has 30 years of experience in the crop protection sector, previously serving as Vice President of Market Development for Vivid Life Sciences, and North American Marketing Director for FMC Agricultural Solutions. He also served as Director of Strategic Accounts for FMC, and started his career with Syngenta (Ciba-Geigy), where he had a variety of sales and channel strategy roles. He has B.S. in agricultural economics from Ohio State University, and currently resides in Alexandria, Ohio, where he can be reached at alocker@helmagro.com.
“Aaron will significantly strengthen our
crop protection business by driving improvements already underway,” said Dave Schumacher, President and CEO of
Helm Agro US. “The Helm team looks forward to integrating Aaron’s high-impact
strategies, customer-centric focus, and solution-oriented approach to
marketplace success. With a commitment to adding new patented product solutions
to our portfolio offerings, expanding our footprint with experienced sales
professionals, and strengthening our long-held channel relationships, Helm is
poised for tremendous growth potential over the next several years.”
A subsidiary of Helm AG, Helm Agro US said
it has one of the fastest growing portfolios in the U.S. crop protection
sector, with 18 products currently available offered in the row crop, specialty
crop, and horticultural markets. Schumacher said the company plans to add more
product in 2020 following anticipated EPA registration approvals.
BASF and WinFieldUnited
announced on Nov. 4 that they will establish a single sign-on connection from
Winfield United’s ATLAS® platform to the BASF xarvio™ digital
platforms, starting with xarvio Scouting, a mobile application that identifies
weeds and diseases by photo. The collaboration is intended to make it easier
for growers and retailers to access digital farming solutions across multiple
platforms.
“Given the tremendous
workloads retailers and growers carry out, both groups will be pleased with the
ease of use made possible through this collaboration,” said Paul Rea, Senior
Vice President, BASF Agricultural Solutions North America. “WinField United
customers will be able to utilize xarvio systems without having to create new
credentials, enhancing their experience with both platforms.”
The agreement will allow
farmers to access BASF’s xarvio products through their retailers ATLAS
platform, which is the online retail portal of Winfield United, the crop inputs
business of Land O-Lakes Inc. The xarvio products Scouting and Field Manager
are currently being used by farmers in more than 100 countries. Over time, the
two companies said they will expand the agronomic data links between xarvio and
WinField United platforms through application programming interface (API).
“As a farmer-owned co-op,
we are always pushing the envelope to bring new solutions that offer distinct
value and benefits to our members,” said Teddy Bekele, Chief Technology Officer
for Land O’Lakes. “Interaction between these platforms can augment field
activities by helping retail agronomists advise the community of growers they
work with to help address growers’ most urgent needs.”
Ammonium nitrate barge prices continued at $170/st FOB.
U.S. Imports:
Ammonium
nitrate imports were down 10 percent in September, to 26,122 st from the
year-ago 28,867 st. They were up 13 percent for the July-September period,
however, to 137,522 st from the year-ago 121,675 st.
U.S. Exports:
Ammonium
nitrate exports in September were up 191 percent to 39,988 st from the year-ago
13,751 st. July-September exports were up 29 percent, to 123,960 st from 95,976
st.
Western Cornbelt:
The
ammonium nitrate market remained at $240-$250/st FOB in the Western Cornbelt
for the last reported business.
DAP
trucks softened to $295/st FOB, down from $305-$310/st FOB at last report. MAP
continued to hold a $5/st premium to DAP at $300/st FOB, a decline from
$310-$315/st FOB in the previous report.
U.S. Gulf:
Sources
noted falling prices amid an uptick in trading volumes on the NOLA phosphate
barge market.
Low-end
DAP held steady at the previous week’s $242/st FOB level, while a lack of
confirmed domestic DAP sales allowed the market’s ceiling to slip to $245/st
FOB. Most market watchers described new offers in the $245-$250/st FOB range on
Nov. 14.
MAP
barges saw the most dramatic decline, falling to $246/st FOB in confirmed
trading. At the top of the range, market watchers noted domestically produced
tons trading in limited quantities at $250/st FOB, below the week-ago $260/st
FOB high.
The
nearby DAP barge market was noted in a general $242-$245/st FOB range,
declining from $242-$259/st FOB in the previous report. MAP barge sales were
reported at $246-$250/st FOB, below the prior week’s $257-$260/st FOB level.
U.S. Imports:
September
DAP imports were noted at 66,807 st, a 45 percent fall from 121,650 st in the
previous September. DAP totals were also down for the July-September period at
262,546 st, 10 percent below the previous-year 293,196 st.
September
MAP/Other imports fell by one percent, to 156,069 st from the year-ago 158,069
st. July-September imports rose by 46 percent, to 465,648 st from 317,906 st.
U.S. Exports:
DAP
exports for September were noted at 152,047 st, rising 66 percent from the
previous year’s 91,555 st level. July-September DAP exports rose 7 percent, to
314,434 st from the year-ago 294,764 st.
MAP/Other
exports firmed to 245,008 st for the month of September, rising 38 percent from
the year-ago 177,955 st. MAP/Other exports for July-September totaled 760,425
st, a 42 percent year-over-year increase from 534,706 st.
Gulf
export phosphate offers were reported softening to $290/mt FOB for the week,
declining from $300-$305/mt FOB at last report. No new business was reported to
conclude for the week.
Eastern Cornbelt:
DAP
pricing had reportedly slipped to $290-$300/st FOB Illinois and Ohio River
terminals, down another $5-$10/st from last report, with the low confirmed at
Ottawa, Ill. Sources pegged the upper end of the regional market at the $310/st
level FOB inland warehouses.
MAP
was generally $2-$5/st higher than DAP, with the low confirmed at $292/st FOB
Ottawa at mid-month.
Western Cornbelt:
DAP
and MAP pricing continued to fall in the Western Cornbelt. Sources pegged the
St. Louis DAP market at $290-$300/st FOB, with the upper end of the regional
range reported at $305-$310/st FOB out of Iowa warehouses on a spot basis. MAP
was quoted at $300-$305/st FOB St. Louis and $310-$315/st FOB in Iowa.
Northern Plains:
DAP
prompt business out of St. Paul had reportedly fallen to $300-$310/st FOB, with
MAP pegged in the $305-$315/st FOB range. Sources continued to report delivered
green MAP from Western U.S. producers at the $405/st level into western North
Dakota, but with no actual business to test that level.
Great Lakes:
The
DAP market in the Great Lakes region was pegged at $320-$330/st FOB, down
another $10/st from the previous week, and a full $25/st lower than month-ago
levels.
MAP
was quoted at $320-$345/st FOB in mid-November, with the low reported in
Wisconsin and the Michigan warehouse market confirmed at $330/st FOB
Webberville and $345/st FOB Essexville.
Northeast:
DAP
pricing out of Northeast warehouses was quoted at $325/st FOB at mid-month,
down another $5/st from last report, with MAP reported at the $330/st FOB
level, also reflecting a $5/st drop. “Prices are holding up better in the
Northeast versus other markets,” said one regional contact.
India:
Sources reported a sale of 20,000 mt of Russian DAP to
Chambal at $320/mt CFR. This price gives the Russian material a netback to the
Baltics of $270/mt FOB.
International traders looked at the deal as another
indicator of weakness in the DAP market. Sources said talks are already
underway for another cargo, with a real possibility of achieving $310/mt CFR by
next week.
Sources said Indian buyers have been taking advantage
of the soft DAP market with all known suppliers. The Chinese producers are the
only ones who have not yet matched the ever-lower prices that the Indians want.
China:
The equivalent price to China of the Russian DAP is
below $300/mt FOB. Sources said while this might be an interesting math issue,
the price from China has not yet dipped below $320/mt FOB.
One trader said the main reason the Chinese price has
not dropped quickly to $300/mt FOB is that the domestic market is still
providing a path for a slower decline in prices. Despite the support given by
the domestic market, sources said eventually the Chinese producers will have to
lower their prices to match the levels currently being paid by India.
The phosphate and NPK producers are meeting late this
week, and sources said the top point of discussion is trying to find a way to
reverse the softening price. Unfortunately for the producers, industry watchers
from around the world said demand is not strong enough to combat the oversupply
of phosphates being produced.
Brazil:
Brazil import MAP pricing was reported at $290-$295/mt
CFR, falling from $290-$300/mt CFR the previous week.
Some sources said the MAP price floor may have been
hit. Although there does not appear to be a strong rebound in pricing coming
soon, traders see an optimistic future. Buying in the countryside has started
to pick up as soybean farmers slowly build their reserves for the 2020 season.
Some of the bigger cooperatives and farm groups have already stepped up with
purchases of at least 110,000 mt.
Prices at inland distribution sites such as
Rondonopolis are now in the range of $360-$380/mt CFR. These prices reflect the
cost of taxes and transportation from the ports.
Saudi
Arabia:
Saudi Arabia DAP pricing moved lower to $315-$320/mt
FOB for the week. The market was previously noted at $320/mt FOB
Phosphate
rock imports totaled 174,026 st for September, 24 percent below the 227,667 st
on record for September 2018. U.S. buyers accepted 582,787 st of foreign
material for the July-September window, a 35 percent year-over-year decline
from 898,491 st.
Sources
described recent TSP barge prices softening to $255-$260/st FOB, down from the
last reported $265-$270/st FOB range.
Western Cornbelt:
The
TSP market was pegged at $278-$300/st FOB in the Western Cornbelt, depending on
location.
Disclaimer of Warranty
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.
