All Posts from February 2, 2009

Terra rejects CF offer; CF still interested

Featured, News

Terra Industries Inc. said early Jan. 28 that its board of directors has unanimously concluded that the Jan. 15, 2009, unsolicited proposal from CF Industries Holdings Inc. (GM Jan. 19, p. 1) is not in the best interests of Terra and Terra’s shareholders.

In a letter to CF chairman, president, and CEO Stephen Wilson, the Terra board said that while it was perplexed by CF’s decision to make a public approach that is conditioned on and subject to due diligence, it has nonetheless examined thoroughly the full range of strategic, industrial, financial, and legal aspects of the combination proposed.

“We concluded that your proposal does not present a compelling case to create additional value for the shareholders of either company, and that it substantially undervalues Terra on an absolute basis and relative to your company,” said the Terra board. “Accordingly, our board has unanimously concluded that your proposal is not in the best interests of Terra and our shareholders and we decline to accept it.”

Under CF’s proposal, each common share of Terra would be entitled to receive 0.4235 shares of CF. CF noted that this was a 23 percent premium over the closing price of Terra shares on Jan. 15, 2009. The transaction valued Terra at $2.1 billion, or $20 per share. Under the deal, CF shareholders would have owned 53 percent of the company and Terra 47 percent.

Around noon on Thursday, CF responded to Terra’s rejection, saying it remains committed to its proposal to create a leader in the global fertilizer industry through an acquisition of all outstanding common shares of Terra Industries Inc. “We are confident that our proposal is a full and fair offer and continue to believe that a combination of the two companies would provide significant benefits to both CF Industries and Terra shareholders, employees and customers,” said Stephen Wilson, CF chairman, president, and CEO. “With annual cost synergies expected to exceed $100 million and the combined talent and scale to compete better globally, we believe the combination is in the best interests of all CF Industries and Terra constituents. Our offer, which is not subject to any financing condition, has been very positively received by the market.”

CF said while it remains its strong preference to enter into a negotiated transaction with Terra, the company is committed to a combination and will consider its options.

Industry speculation as to what will happen regarding the deal spanned the gamut. Some agreed that CF gave a good offer, while others felt Terra was undervalued. Still others speculated that CF may increase its bid and Terra will eventually accept. However, the entire economy is in a period of uncertainty. Terra owners may want to roll the dice and see if the economy improves. After all, aren’t most fertilizer companies predicting long-term growth? If true, shouldn’t things improve? CF values Terra shares at $20. Terra has a 52-week high-low of $11.21-$57.64. Then again, Terra shareholders may want to eventually reduce their risk and become part of a much larger nitrogen company that also has investments in phosphate.

Others wondered if there might be antitrust concerns, though CF has dismissed these, citing nitrogen as a global market, with the U.S. importing some 50 percent of its nitrogen needs.

Others suggested the CF offer may elicit other bidders and start a bidding war. However, will other potential bidders be stymied by the global financial crisis?

If there are other bidders – who? Yara International ASA, the major global nitrogen player, dove into the North American production business by acquiring Saskferco Inc. in 2008. Would it be interested in expanding its North American production? It is already a joint venture partner with Terra in the United Kingdom. Like Terra in the U.S., Yara in Europe is involved in the sale of nitrogen to clean up vehicle emissions.

And what about Agrium Inc.? It is a big player always looking for an opportunity. It lost some U.S. production with the idling of its Kenai, Alaska, plant. Agrium lacks a major nitrogen plant in the U.S. heartland and bowed out of attempts years ago to build a huge plant in the Midwest. It is a retail giant that must source a lot of nitrogen.

What about Bunge Ltd., a major fertilizer player in South America? It has recently beefed up its marketing in North America.

And could Koch Nitrogen Co. digest another round of nitrogen plants?

The question for all of these or other players, however, gets back to whether they have the wherewithal in today’s financial climate to move forward with such a large acquisition.

The one major player not on the list may be PotashCorp, which in the past has stressed its acquisition preference for potash assets. More nitrogen has not been a priority.

Florida micronutrient business shuts down; financial improprieties alleged in labor case

Featured, News

Traylor Chemical & Supply Company, an Orlando-based manufacturer and distributor of micronutrients and chelates for the fertilizer industry, has closed its doors and ceased operations after 56 years in business. Although company representatives could not be reached by Green Markets, industry contacts said the closure was the result of financial difficulties that included legal actions taken against Traylor in 2007 by the U.S. Department of Labor.

Traylor’s website was no longer active, and telephone numbers to the Orlando headquarters and to wholesale outlets in Georgia, Indiana, and Texas were disconnected. A former Traylor employee said the company closed its doors in late September 2008, notifying employees only the day before that it was ceasing operations. “They called people on Thursday and told them Friday was their last day,” he told Green Markets.

The shuttered business represents a stark change of fortune for William “Bill” Traylor Jr., president of the company and son of its founder, W. Leroy Traylor. Just last summer, Bill Traylor, 71, was honored by the Florida Fertilizer & Agrichemical Association with a Lifetime Achievement Award for his contributions to the Florida fertilizer and crop protection industry (GM Aug. 18, 2008, p. 10).

“They simply ran out of money,” the former employee said, adding that Traylor owed “multiple people” at the time of the closure. He said Traylor had not filed for bankruptcy protection, and some of the company’s creditors have been weighing legal options to limit their losses. Green Markets’s own survey of bankruptcy proceedings for Orlando and Atlanta showed no listings for Traylor Chemical & Supply dating back to the time of the closure.

According to filings with the Florida Uniform Commercial Code (UCC) and the Secretary of State office, Traylor Chemical’s major secured creditors include LSQ Funding Group LC, Orlando; Direct Capital Corp., Portsmouth, N.H.; U.S. Bancorp, Marshall, Minn.; and Sun Trust Bank South Florida NA, Lake Park, Fla.

Judgment liens against Traylor Chemical were also filed with the Florida Secretary of State in late 2008 by two businesses in Mexico who sued and won judgments against the company. The first, filed Nov. 21, is for $85,914 by Erachem Mexico S.A. DE C.V. Corp., Veracruz, Mexico, and the second was filed Dec. 31 for $55,903.41 by Fabrica de Sulfato el Aquila S.A. DE C.V., Jalisco, Mexico.

Traylor’s difficulties date back to at least 2007. In August 2007, the U.S. Department of Labor obtained a judgment and order requiring Traylor Chemical & Supply to restore $612,658 plus 6 percent annual interest to the company’s profit-sharing plan. The department’s lawsuit, filed simultaneously with the judgment in federal district court in Orlando, alleged that the company, William Traylor Jr., William E. Comer, and Frances Hale violated the Employee Retirement Income Security Act (ERISA) when they executed 32 prohibited loans between the plan and Traylor Chemical. At the time of the improper loans, the defendants served as trustees of the plan as well as officers of the company. Comer was listed as the company’s chief financial officer, and Hale as its treasurer.

According to the complaint filed in the case, the defendants “caused or allowed” 32 loans to be made from the plan to the company between July 17, 1998, and Sept. 17, 2004, totaling $2,532,000. The suit also alleged that the defendants failed to take action to restore the full amount of outstanding loans owed to the plan, causing losses to the plan of at least $2,532,000 plus lost earnings, and that each defendant “failed to monitor and correct the improper actions of the other plan trustees.”

The judgment also included a payment schedule that required the company to provide to the DOL proof of monthly payments, ranging from $15,320.47 to $49,340.19, that started on May 1, 2007, and were to extend through June 1, 2009. The total of the 26 monthly payments is listed in the document as $661,579.35.

According to Gloria Della, a spokesperson for the Department of Labor, the legal process against Traylor is still ongoing. “They are still collecting on the judgment,” she told Green Markets. “We try very hard to get all our money back.” The DOL also has authority to assess a civil monetary penalty in cases involving violations of ERISA, but Della said Traylor has not at this point been assessed a fine in the case.

According to the DOL judgment, money restored to the plan was to be allocated to the accounts of all plan participants except the defendant trustees. At the time of the judgment in August 2007, the DOL said the plan had 33 participants. The former Traylor employee said the staff members hardest hit by the company’s financial undoing were long-term employees in Florida and Indiana who had been with Traylor for 20 years or more.

Traylor Chemical & Supply was described by the FFAA last year as “one of the nation’s leading manufacturers and distributors of micronutrients and chelates used in the fertilizer industry,” with operations in Georgia, Indiana, and Texas, and with international exports to Central and South America and Canada. FFAA said Bill Traylor’s “expertise in chemistry and micronutrients made him a key figure in negotiating a heavy metals regulation for Florida fertilizers.” Traylor was also chairman of FFAA’s board from 1995 to 1996.

In a business profile published by the Orlando Business Journal on Sept. 28, 2008, Bill Traylor said a major obstacle for his company was “being competitive with the rising prices of raw materials.” Asked what his worst business decision was, Traylor said, “I waited too long to get rid of the delivery truck fleet when gas prices started to rise. We were not getting paid enough to cover the cost of the trucks.”

China to allow domestic fertilizers to move with market

China, News

At the same time the export duties are being increased from China, Beijing announced it would remove all controls from fertilizer prices.

Beginning Feb. 1 the price of all domestic and imported fertilizers will be decided by market forces, according to the National Development and Reform Commission.

In the past the producers had to petition the government to increase prices. The government was always reluctant to approve the price hikes out of fear of antagonizing the country’s 900 million farmers.

The price of urea and DAP had to be raised to cover the costs of the inputs, which were slowly being deregulated. Eventually the cost of producing the fertilizers forced the government to either establish more subsidies for the producers or find other ways to help the farmers.

In recent years the central government has eschewed more subsidies to inefficient factories. In some cases local governments picked up the tab to keep the older urea plants operating rather than face massive unemployment if the plants closed.

Phosphate and urea producers were being hit hard by the increase in domestic supply – partly due to duties that discouraged exports – and increased input costs. The latest government action is seen by some Asian traders as a move to help the manufacturers without providing direct subsidies to maintain production.

Industry observers in China expect to see local prices rebound from their current slump.

Media reports also state that some of the inputs to the plants will be provided at “preferential rates.” In the past this has been a euphemism for subsidies.

One trader noted that if natural gas is being supplied from the national company at below market levels, by any other name that is a government subsidy.

The decision to allow fertilizers to move by market demand will affect farmers, who are already feeling the credit crunch faced by their counterparts around the globe. The saving move for the farmers is that the imposition of higher export duties will keep the producers from sending their products offshore once the international markets pick up.

FBI raid on Bakersfield organic fert producer raises questions about enforcement

California, News

California state and industry regulators were notified of the possibility of another organic fertilizer manufacturer “spiking” its product with unauthorized ingredients in 2007, about the same time California Liquid Fertilizer (GM Jan. 26, p. 1, Jan. 5, p. 10) was being investigated for the same reason, Green Markets has learned. At that time, Kern County inspectors found aqueous ammonia among other chemicals stored at Port Organics Products in Bakersfield and not reported as required by state law, Kern Environmental Health Director Matt Constantine told GM.

“One of the chemicals we identified was aqueous ammonia we suspected was used in the manufacturing of their product, but we were not certain,” Constantine reported. He said he was not an expert in organic practices, but agreed that it was safe to assume that the chemical was there for that purpose. He said he told the media at first that the department had not reported the discovery to other agencies, but that “subsequent review revealed that we had had contact with Organic Materials Research Institute, the California Certified Organic Farmers, and the California Dept. of Food and Agriculture.” He said he was unaware of that until recently finding out that a member of his staff made those contacts in 2007 following the county’s investigations. To his knowledge, he added, his department didn’t hear back from any of the three agencies.

Constantine also disclosed that his department participated with FBI agents in the raid late last month on Port Organics (GM Jan. 26, p. 11), but declined to provide any details. As is customary, FBI agents were not talking about the search of the properties, and Constantine said he was obligated to protect their confidence.

The raid does, however, raise questions about who’s in charge of enforcement in California. The California Dept. of Food and Agriculture, which is responsible for verifying – but not certifying – fertilizer content, declined to comment since the agency may be the focus of a U.S. Dept. of Agriculture investigation. CDFA spokesman Steve Lyle issued a one-sentence statement that said “we are cooperating with federal agencies but cannot disclose details because of an ongoing investigation nor comment directly on that report.” Lyle also said he could not confirm reports that state fertilizer inspectors may get additional auditing powers, and the state Senate Food and Agriculture Committee has scheduled a hearing on the issue Feb. 3.

At the same time, the Organic Materials Research Institute (OMRI), an industrial entity that certifies and decertifies, reported that Port Organics “was on its radar,” but was not aware, nor was it involved in, the FBI raid in Bakersfield. OMRI has announced new measures to strengthen the certification process, while California Certified Organic Farmers (CCOF), which also has certification responsibility, announced it was mandating inspections of fertilizer makers that sell to its clients.

The possibility of an investigation of CDFA’s handling of the California Liquid Fertilizer matter was raised by officials with USDA’s Agricultural Marketing Service, which reported that they are looking into why it took more than two years to force the removal from the market of illegal organic fertilizer that contained ammonium sulfate to boost nitrogen content. Spokeswoman John Shaffer also said that the National Organic Program, which is administered by AMS, is working with California to review and strengthen the state’s organic program. Shaffer told the press the failure of the state agency to act quickly against the supplier could lead to federal disciplinary action. She said a complaint was filed with the USDA over the state’s handling of the probe, and as a result AMS requested the state provide a history and timeline of the investigation.

OMRI Executive Director Dave DeCou said more certification verification control points had been installed, including the requirement for every client to sign a binding contract that forbids any company found guilty of product misrepresentation from reapplying for one year. In addition, onsite inspectors will determine whether facilities are capable of what they claim in their application. All clients also will be required to maintain and open their records to an OMRI auditor. The onsite records establish whether they have received and paid for sufficient quantities of compliant ingredients to make the amount of finished product sold and stored.

CCOF also said it is working directly with manufacturers and compliance and inspection bodies to ensure that the highest level of verification and implementation of the National Organic Program are met to protect its growers, consumers, and the organic community. Use of all Port Organic products also has been banned effective Jan. 23.

SynGest proposes stover-to-ammonia plant in Iowa

Ammonia, News, Western Cornbelt

SynGest Inc., San Francisco, recently reported that it plans to make bio-ammonia from biomass in Iowa. The facility will process 450 st/d of field-dried stover (stalks, cobs, etc.) to yield 150 st/d of anhydrous ammonia plus 20 st/d of bio-char, a soil conditioning agent. Stover will be gathered from 75,000 acres on nearby farms, while the bio-ammonia and bio-char will serve to fertilize 500,000 acres under corn. SynGest said that depending upon local ammonia prices, the plant will generate annual revenues between $25 and $35 million. It expects the plant to be in operation in three years.

The company says a major Midwestern agribusiness has agreed to supply the stover and purchase/distribute the ammonia. SynGest told Green Markets it is not ready to reveal the name of this player, but will do so in a later announcement. The stover will most likely be cobs.

Syngest said it chose Iowa because it is the number one corn-producing region in North America. “But we were also influenced by two other factors,” said Jack Oswald, SynGest CEO. “Iowa offers a smart and productive workforce, and the state is very proactive in its support of innovative agricultural and renewable energy technologies.”

Stover will be fed into a pressurized oxygen-blown gasifier and converted into a mixture of hydrogen and carbon monoxide. After the gas stream is cleaned, the carbon monoxide will be “shifted” to maximize hydrogen. The hydrogen will be purified and catalytically reacted with nitrogen (from air) to make ammonia. The plant will include an air separation system to provide oxygen for the gasifier and pure nitrogen for ammonia synthesis. SynGest said the process has been carefully optimized to make use of all recoverable waste heat, thereby minimizing the need for external energy supplies. Two major patents are pending.

SynGest says with its negative carbon footprint, the Iowa plant will be the first better-than-100-percent “green” environmental project of its kind in the world. The plant will create jobs for 30 full-time direct employees. Handling, transportation of the stover and ammonia, and ancillary support services will generate the fulltime equivalent of 100 additional jobs.

SynGest’s front-end engineering team includes Unitel Technologies, Alion, Eltron, PSRI, and RTI. The contractor for detailed engineering, procurement, and construction will be selected soon.

Sulfuric acid producers to pay $700,000 penalty, spend $12 M to reduce emissions

News, Sulfuric Acid

Three manufacturers of sulfuric acid have agreed to spend at least $12 million on air pollution controls that are expected to eliminate more than 3,000 tons of harmful emissions annually from six production plants in Louisiana, Ohio, Oklahoma, Texas, and the Wind River Reservation in Wyoming, the U.S. Environmental Protection Agency and the U.S. Department of Justice recently announced. Chemtrade Logistics, Chemtrade Refinery Services, and Marsulex will also pay a civil penalty of $700,000 under the Clean Air Act settlement.

“The companies are expected to reduce harmful air pollution by an estimated 3,000 tons per year, which is well over half of their annual emissions,” said Granta Nakayama, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement will improve air quality for millions of people.”

“This settlement is the product of our sustained effort to bring all sulfuric acid manufacturers into compliance with the Clean Air Act,” said Michael Guzman, Principal Deputy Assistant Attorney General for the Justice Department’s Environmental and Natural Resources Division. “We are pleased that the cooperative effort among us, our state counterparts, the Northern Arapaho Tribe and the defendants resulted in this victory for the environment.”

Between January 2010 and January 2013, at its four production facilities in Beaumont, Texas; Shreveport, La.; Tulsa, Okla.; and Riverton, Wyo., Chemtrade will upgrade existing pollution control equipment called scrubbers to meet new, lower emission limits for sulfur dioxide.

At its facility in Oregon, Ohio, Marsulex will improve chemical processing equipment that will reduce sulfur dioxide emissions by no later than July 2011. Marsulex says it will spend US$3-$6 million at the facility (GM Jan. 26, p. 13). Marsulex will also install a new scrubber at Chemtrade’s sulfuric acid plant in Cairo, Ohio, to meet lower sulfur dioxide limits by July 2011.

DOJ says the settlement is the third nationwide compliance agreement in a Clean Air Act initiative, under which DOJ and EPA expect to reach similar agreements with other sulfuric acid manufacturers. The first and second nationwide sulfuric acid compliance agreements were announced in 2007 with Rhodia Inc. and Dupont. As a result of the three settlements this initiative has now secured pollution controls at 20 plants, and is expected to eliminate a combined total of 35,000 tons of sulfur dioxide emissions per year.

Chemtrade’s and Marsulex’s plants produce sulfuric acid by burning sulfur or used sulfuric acid, thereby creating sulfur dioxide.

The government’s complaint, filed with the consent decree, alleges that Chemtrade and Marsulex made modifications to their plants that increased emissions of sulfur dioxide without first obtaining pre-construction permits and installing required pollution control equipment. The Clean Air Act requires major sources of air pollution to obtain such permits before making changes that would result in a significant emissions increase of any pollutant.

EPA is focusing on improving compliance among industries that have the potential to cause significant amounts of air pollution, including the cement manufacturing, glass manufacturing, and acid production industries.

The states of Louisiana, Ohio, and Oklahoma, and the Northern Arapaho Tribe joined the federal government in the agreement. Of the total penalty, $460,000 will be paid to the federal government and $240,000 will be paid to the three states. In Ohio, part of the money will be used to fund a clean diesel school bus project and a tree planting project.

The consent decree, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 30-day public comment period and approval by the federal court. For more information on the settlement, go to http://www.usdoj.gov/enrd/Consent_Decrees.html.

BLM refutes Intrepid claim on N.M. project

News

The U.S. Bureau of Land Management (BLM) says the decision to subject Intrepid Potash Inc.’s HB Solar Mine Project in the Carlsbad area to a lengthy environmental impact statement (EIS) had nothing to do with the comments entered about the project by five oil and gas companies, conflicting with earlier assertions by the company (GM Jan. 12, p. 11). “This decision was not reached because of some comments provided by an oil and gas company,” Hans Stuart, spokesman for the state BLM office, told Green Markets.

Stuart reported that while it was working on an environmental assessment (EA) in the last six months, BLM warned Intrepid that the extent of work could involve an EIS. “They’ve been on notice for quite some time that the EIS may be required because of the scope of the project,” Stuart said. He said the BLM had completed 50 percent of the EA when it concluded that more studies were needed about the environmental impacts of solution mining due to potential impacts on fresh water aquifers, surface land use impacts, surface features resulting from subsidence, and concurrent development of oil and gas operations, as well as to human health and safety both above and below ground.

The proposed Intrepid project would encompass a total area of 45,190 acres, of which 38,330 acres are public lands. The proposed underground flood zone affects 4,180 acres and the disturbed surface area is about 807 acres, with 520 acres devoted to evaporation ponds and 186 acres for new pipelines and haul roads. In addition to approval of the mine plan, the BLM would be considering about 12 miles of new rights-of-way and 40 miles of new pipelines.

Stuart said Intrepid aims to dissolve columns remaining in the worked-out Eddy underground potash mine by injecting a saturated brine solution at the rate of 2.8 million gallons per day, and then pump the solution back up into the ponds. “These are activities not previously used in the area,” Stuart stated, noting that the existing Secretarial Order for the Secretary’s Potash Area (SPA) has not considered this methodology for mining and its effect on concurrent development by the oil and gas industry. BLM’s Carlsbad office said a joint comment from five oil and gas companies was received from their attorney on Nov. 6, the last day of the comment period. “They weren’t submitted after the deadline (as Intrepid has implied),” Craig Cranston, lead mining engineer, reported. He said this was the only written comment, although verbal statements were received during two public meetings in Carlsbad in September, where Intrepid presented the technical aspects of the project and answered questions.

Intrepid, which insists that potash solution mining is a widely used and accepted technology, had maintained that BLM received no response during the 30-day comment period established after the two public meetings, and that the oil and gas company “thereafter submitted objections based on alleged environmental impacts.”

Intrepid opted not to identify the oil and gas company when contacted recently. However, Cranston identified five companies, represented by Artesia attorney Mary Lynn Bogle, as Devon Energy Production Co., Oklahoma City; Yates Petroleum Corp. of Artesia; Bass Enterprises Production Co. of Houston; Plains Exploration and Production Co., Houston; and Occidental Petroleum Co., Los Angeles.

Intrepid has reason to fear the reprisal of oil and gas companies. According to its SEC filings, it said that as of June 30, 2008, it has protested approximately 24 additional APDs (application permits to drill) in the Potash Area on or near its BLM and State of New Mexico potash leases that have been submitted by various oil and gas operators. It said at the time that these protests did not involve any claims against Intrepid. Intrepid said the proposed drilling presents an unacceptable safety hazard to its underground potash operations.

In particular, Intrepid said it had recently intervened in a proceeding before the New Mexico Oil Conservation Division in support of the division’s denial of the APD for the Laguna State “16” Well No. 2, proposed by Fasken Oil & Ranch Ltd., which would be located on state lands approximately half a mile from the workings of the Intrepid’s North Mine.

Intrepid cuts potash/langbeinite production

News Briefs, Potash, Southwest

Denver-Intrepid Potash Inc. said Jan. 28 that it has taken precautionary steps to further control potash and langbeinite production and inventory at its Carlsbad, N.M., facilities. Intrepid is taking these steps due to the continuing market conditions, which began in the fourth quarter of 2008 and have continued into 2009, and have resulted in lower sales volumes of potash and langbeinite. Intrepid is planning on implementing a two-week temporary plant shutdown beginning mid-February at the West and North Carlsbad facilities, and a sequential two-week temporary plant shutdown beginning later in the month at the East Carlsbad facilities. Currently, these temporary shutdowns are planned to commence Feb. 9, 2009, and end March 9, 2009. During these periods, Intrepid will utilize a portion of the workforce to conduct ongoing maintenance work and critical capital projects. Intrepid is also planning to reduce operations to three crew shifts from four crew shifts upon return from the shutdowns, all the while monitoring the market for signs of recovery that may mitigate this reduction longer term. Part of this reduction will be achieved via elimination of certain contract labor so as to minimize the impact on Intrepid employees. While Intrepid anticipates that this reduction in production rates will be short-lived, it says the timing of market demand and sales conditions will ultimately drive the level of production at its facilities. Intrepid does not currently contemplate any similar measures at its Moab, Utah, facility; however, it is adjusting the production schedule at the Wendover, Utah, facility to perform maintenance earlier than usual.

CHS completes Winona acquisition

News Briefs, Northern Plains

St. Paul-CHS Inc. said Jan. 27 that it has completed its acquisition of Winona River & Rail Inc., (GM Jan. 5, p. 1), a subsidiary of Rosen’s Diversified, Inc., Fairmont, Minn. CHS says the acquisition will strengthen its Midwest and upper Mississippi River crop nutrients position through improved storage capacity and rail access. The Winona River & Rail assets include roughly 90,000 st of dry fertilizer storage capacity, a dedicated river dock, and a 65-car railroad track capacity. The facility will be re-identified as CHS Winona River & Rail. “We are very excited about adding Winona River & Rail to our crop nutrients business,” says Cheryl Schmura, vice president, crop nutrients for CHS. “These assets are well-positioned in an area of key, strategic market importance and the company’s talented workforce has a strong customer focus that has earned it solid business relationships.” Financial terms were not disclosed. CHS already owns a crop nutrient terminal on the west side of the river with 16 employees. Winona River & Rail, with 14 employees, is located on the river’s east side. Schmura says CHS will operate both locations with existing staff through the spring planting season and is considering several different future operational scenarios. Location management will not change and will report to David Klima, director of crop nutrients facilities for CHS. Schmura says the Winona River & Rail acquisition is one of many planned infrastructure improvements to better serve CHS wholesale crop nutrients customers.

Fertilizer fees going up in South Dakota

News Briefs, Northern Plains

Pierre, S.D.-Inspection fees paid on fertilizer and manure-based products will be going up in South Dakota. According to the Dept. of Agriculture, fertilizer will be increased from the current 5 cents to 15 cents per ton and manipulated manure from 2 cents to 5 cents per ton. Brad Berven, program administrator in the division of agricultural services, described the increase as a normal adjustment in fees that is needed to fund the state inspection program. The new rates were endorsed earlier this month by the South Dakota legislature’s review committee. Berven said the fees have fluctuated in the past as balances have risen and fallen in the inspection fund. Five years ago the fertilizer fee was cut in half, from 10 cents per ton to 5 cents, because of a large balance in the fund, while the manure fee was added at 2 cents. The fertilizer fee has been as high as 22 cents in the past.

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