All Posts from August 23, 2019

Skyland, United Prairie Ag to Merge

Skyland Grain LLC, Johnson, Kan., and United Prairie Ag LLC (UPA), Ulysses, Kan., announced on Aug. 19 plans to merge, effective Sept. 1, 2019. The new company will operate as Skyland Grain LLC. David Cron, current CEO of Skyland Grain, will be the CEO of the combined company. Skyland will have their corporate office in Ulysses, with regional administrative offices in Johnson and Cunningham.

The new Skyland will have over 87 million bushels of storage capacity in 36 locations in three states – Kansas, Oklahoma, and Colorado. Sales for the combined company will be in excess of $400 million. Skyland will employ 250 employees with the addition of UPA.

The company told Green Markets that it will have ten full-service agronomy locations: nine in Kansas at Johnson, Syracuse, Big Bow, Lakin, Ulysses, Hugoton, Moscow, Ryus, and Cunningham, and one in Colorado in Walsh. It also has a few seasonal locations.

“The merger of UPA into Skyland Grain is just another way we are connecting our producers to the service they deserve,” said Wade Tucker, Skyland Board Chairman. “We are excited about the talented employees in each company working together to serve our producers and their needs.”

“I believe that this merger is happening at the right time,” said Clifford Alexander, Cropland Co-op Board Chairman. “Both of these companies are good, financially strong institutions, making this a great opportunity for all of our producers.”

UPA was formed in January 2006 and is a joint venture between Cropland Co-op Inc. and ADM Grain Co. It is a full-service agriculture partner, offering grain operations, agronomy products and services, refined fuels, and marketing expertise. UPA operates elevator facilities in nine communities, with a total of 30 million bushels of storage capacity. UPA is also the managing partner for Santa Fe Grain Terminal, a jv with Skyland Grain and ADM.

The legacy Skyland Grain has cooperative roots dating back to 1915 and began operations in 2004 with Johnson Cooperative Grain and ADM Grain Co. as founding parent companies. In 2010, Syracuse Cooperative Exchange also became a part of the jv, followed by The Cairo Cooperative Equity Exchange in 2015.

The three co-ops came together in 2017 to form Skyland Co-op Inc. Skyland brought to the merger grain receiving facilities at 27 locations across Kansas, Oklahoma, and Colorado, with total licensed grain storage capacity of over 56 plus million bushels. Additionally, it has a full-service agronomy department that provides bulk liquid, dry, and anhydrous ammonia fertilizers, chemicals, and seed, as well as custom application for fertilizer and chemicals. Earlier this year, Skyland purchased Mid-America Sprayers in Johnson, Kan., which is now called Skyland Aerial LLC.

Logistics, Capacity, Trade Dominate NAFTF, Fertilizer Canada Conference Agenda

Some 200 industry delegates gathered in Victoria, B.C., on Aug. 19-21 for the North American Fertilizer Transportation Forum (NAFTF) and the 74th Fertilizer Canada annual conference. The two events were held consecutively at the Fairmont Empress Hotel, with attendees enjoying a picturesque setting and beautiful weather for the duration.

The NAFTF featured a post-mortem on the historic 2019 planting season and an analysis of the major issues that continue to plague the rail, truck, and vessel industries, including capacity and labor constraints, historic weather events, and disrupted trade partnerships.

“In the 45 years I’ve been in this industry, I’ve seen nothing like this,” said Tom Torretti of Cooper Consolidated LLC, commenting on the myriad logistics and weather issues that the fertilizer industry faced this spring.

Torretti said the money spent this year on demurrage for stranded vessels was “through the roof” due to historic flooding, restrictions on navigation, an unprecedented number of lock and harbor closures, and ongoing struggles with shoaling and silting. He noted that at one time this spring there were 111 vessels stranded at the U.S. Gulf, waiting for access to the flooded river system.

As a result, he said fully three-and-a-half months of a nine-month navigation season were lost this year. In addition, the industry is now bracing for an extended closure of the Illinois River in 2020 due to lock and dam maintenance. His advice to Illinois River shippers and suppliers was simple: “Get stuff in there before the closures.”

Geoffrey Wood of the Canadian Trucking Alliance (CTA) detailed the critical driver shortage facing the industry, noting that there are currently 20,000 unfilled driving positions and that number is expected to climb to 34,000 by 2024. He said increased access to immigration channels, an accelerated Labor Market Impact Assessment (LMIA) process, and mandatory pre-license training are essential to address this issue.

Wood also commented on Canada’s Electronic Logging Device (ELD) mandate, which goes into effect on June 12, 2021, urging industry participants to “work with compliant carriers” who are “playing by the rules.” He said the tragic Humboldt Broncos accident near Armley, Sask., in April 2018 brought “significant attention to truck safety,” noting that CTA has developed a 10-point action plan to address safety concerns.

Katherine Bamford of the Vancouver Fraser Port Authority joked that “truck hunting” has now become a popular term in the transportation industry, while port terminal capacity expansion has become paramount. Ken O’Hollaren reported that the Port of Portland, Ore., expanded overall capacity from 0.5 million to 3.5 million tons from 1997 to 2018, which included a $140 million bulk potash terminal that was completed last year.

Claus Thornberg also detailed the capacity expansions at Neptune Terminals, a complex in the North Shore trade area of Vancouver that has become one of the largest multi-product bulk terminals in North America. Neptune handles 330 vessels annually, 240 of which are potash. “Terminal improvement is the name of the game,” he said.

Magnus Ankarstrand, President of Yara North America, gave the NAFTF keynote, focusing on three issues impacting farmers and the fertilizer industry: shifting consumer demand, climate change, and trade. He said population growth over the next 20-30 years will be concentrated in Africa and Asia, which he described as “challenging” areas in which to operate.

Although agriculture and fertilizer advances have delivered huge benefits to global food production, Ankarstrand said there is increased scrutiny on the industry’s environmental impact, with agriculture accounting for 70 percent of water use and contributing 24 percent of GHG emissions, three percent of which is from fertilizer.

Ankarstrand said the 4R nutrient stewardship program is “very, very important for the future of our industry,” noting that agriculture is an easy target when pollution becomes highly visible, as it has in Florida, Lake Erie, and India. Citing new ambient air quality directives in Europe with specific ammonia emission reduction targets for 2030, he said Germany will ban straight urea application starting next year, allowing only the use of urease inhibitors.

Ankarstrand also weighed in on global trade issues, which have impacted Canadian canola growers significantly. “Trade used to be influenced by pragmatism and by people who actually knew what they were talking about, but today it is influenced more by referendum and Twitter,” he said, adding that the China trade war and Brexit “could be just the start.”

Referring to Brexit, he said: “I wouldn’t want to be in the shoes of any U.K. farmer, or any other trading partner for that matter.”

Darrell Bricker, CEO of IPSOS Public Affairs, took up the issue of population growth, arguing that the U.N.’s projection for a global population of 11.2 billion by 2100 is “all wrong.” Bricker said declining fertility rates, an aging population, and urbanization – which he referred to as “the single biggest migration in human history” – will all contribute to a global population that peaks at midcentury, and then declines to roughly current levels.

“We will never see a population of 11.2 billion people,” he said.

Garth Whyte, President and CEO of Fertilizer Canada, urged attendees to align around a focused advocacy effort, particularly ahead of the fall elections in Canada, which he said could result in a minority government, giving the balance of power to the Green Party.

Whyte noted Canada’s rankings as 14^th in global competitiveness and 25^th in global infrastructure, and used Canada’s oil patch and the U.S. coal industry – where capex plunged from $68.6 billion in 2011 to $4.02 billion by 2016 – as examples of industries adopting the wrong message and strategy.

“We have a transportation problem right now, and it’s going in the wrong direction,” he said, noting that as a result of the closure of the Magellan ammonia pipeline this year, total ammonia volumes transported by pipeline will fall from 65 percent to below 50 percent. “We need a clear, concise, non-partisan message,” Whyte said. “If we do that, we won’t end up like the coal industry or the oil patch.”