All Posts from January 25, 2019

USDA Reopens FSA Offices, Recalls Entire FSA Staff During Government Shutdown

Featured, News

U.S. Secretary of Agriculture Sonny Perdue on Jan. 22 announced that all Farm Service Agency (FSA) offices nationwide would reopen to provide additional administrative services to farmers and ranchers during the lapse in federal funding. The announcement came on the 32nd day of the partial government shutdown.

USDA earlier announced that certain FSA offices would reopen temporarily to provide limited services for existing loans and tax documents (GM Jan. 18, p. 1). The initial reopening took place at approximately 800 FSA offices and involved about 2,500 FSA employees, and only on Jan. 17, Jan. 18, and Jan. 22. Beginning on Jan. 24, however, USDA said all FSA offices would open from 8:00 a.m. to 4:30 p.m. weekdays, and offer a longer list of services.

Perdue also announced that the deadline for farmers to apply for the Market Facilitation Program (MFP), which provides tariff aid to farmers hurt by the trade war with China, has been extended to Feb. 4 from the original deadline of Jan. 15. USDA said other program deadlines may be modified and will be announced as they are addressed.

“At President Trump’s direction, we have been working to alleviate the effects of the lapse in federal funding as best we can, and we are happy to announce the reopening of FSA offices for certain services,” Perdue said. “The FSA provides vital support for farmers and ranchers, and they count on those services being available. We want to offer as much assistance as possible until the partial government shutdown is resolved.”

USDA has temporarily recalled all of the more than 9,700 FSA employees furloughed by the shutdown. FSA offices will be open Monday through Friday from Jan. 28 through Feb. 1, and for the week of Feb. 4-8. In subsequent weeks, however, FSA offices will only be open on Tuesdays, Wednesdays, and Thursdays while the shutdown persists. President Trump has already signed legislation that guarantees employees will receive all back pay missed during the lapse in funding.

USDA also expanded the list of services that FSA will provide during the shutdown. In addition to administering MFP payments, these include marketing assistance loans; the release of collateral warehouse receipts; direct and guaranteed farm operating loans and emergency loans; existing Conservation Reserve Program (CRP) contracts; sugar price support loans; the Dairy Margin Protection Program; Agricultural Risk Coverage and Price Loss Coverage; Livestock Forage Disaster Program; Emergency Assistance Livestock, Honey Bees, and Farm-raised Fish Programs; Livestock Indemnity Program; Noninsured Crop Disaster Assistance Program; Tree Assistance Program; and Remaining Wildfires and Hurricanes Indemnity Program payments for applications already processed.

Transactions and programs that will not be available include new CRP contracts; new direct and guaranteed farm ownership loans; Farm Storage Facility Loan Program; new or in-process Wildfires and Hurricanes Indemnity Program applications; Emergency Conservation Program; Emergency Forest Rehabilitation Program; Biomass Crop Assistance Program; and Grassroots Source Water Protection Program.

“With the Office of Management and Budget, USDA reviewed all of its funding accounts that are not impacted by the lapse in appropriation,” the agency said on Jan. 22. “We further refined this list to include programs where the suspension of the activity associated with these accounts would significantly damage or prevent the execution of the terms of the underling statutory provision. As a result of this review, USDA was able to except more employees. Those accounts that are not impacted by the lapse in appropriation include mandatory, multiyear, and no year discretionary funding including FY 2018 Farm Bill activities.”

Dueling bills were introduced on Jan. 24 to reopen the government, but both failed in Senate votes. As the shutdown hit Day 35 on Jan 25, lawmakers had no clear path forward to reopen the nine unfunded federal departments, with Democrat leadership remaining firmly opposed to the $5.7 billion in border wall funding demanded by President Trump.

Other federal agencies were also taking steps to provide timely services during the shutdown. The IRS on Jan. 15 recalled more than 46,000 employees, or roughly 57 percent of its workforce, to prepare for the tax filing season, which begins on Jan. 28.

Bloomberg reported that the Trump Administration also recalled thousands of federal employees to facilitate the sale of offshore drilling rights, prompting some critics to argue that Trump is showing favoritism to pet projects while using the shutdown as a weapon against programs and agencies that he dislikes or considers wasteful. The shutdown has reportedly furloughed more than 90 percent of EPA’s staff – some 13,000 employees – forcing the agency to halt inspections of oil refineries, chemical factories, manufacturing plants, and other industrial facilities.

Bloomberg reported that a guest editorial in the conservative Daily Caller by an anonymous senior administration official only added fuel to the fire. “The lapse in appropriations is more than a battle over a wall,” the writer said in a Jan. 14 op-ed. “It’s is an opportunity to strip wasteful government agencies for good.”

 

PolyNatura, Nitron Announce Polyhalite Offtake Agreement; N.M. Production Slated for 2021

Featured, News, Polyhalite, Southwest, Specialty

PolyNatura Corp. and Nitron Group LLC announced on Jan. 23 that they have entered a “take-or-pay” offtake agreement for the supply of multi-nutrient polyhalite products from PolyNatura’s greenfield mine in Lea County, New Mexico.

Under the agreement, which is subject to customary terms and conditions, Nitron reported that it will purchase 75 percent of PolyNatura’s production at its Ochoa Project in New Mexico, or 1.5 million st annually at peak production, over a five-year period commencing from first production.

“We are excited to partner with one of the most respected names in the global fertilizer industry,” said Graham Wheelock, managing director of PolyNatura. “Financial strength, geographic reach, and deep industry knowledge make Nitron the ideal partner to distribute our organic fertilizer globally, enabling farmers around the world to improve crop yields and quality.”

PolyNatura, an affiliate of the Cartesian Capital Group LLC, New York, is based in Hobbs, N.M. The company said its Ochoa Project in the Permian Basin in New Mexico has large, low-cost, proven reserves of polyhalite, and is the only naturally occurring scale deposit of polyhalite in the Americas. Cartesian acquired its ownership stake in the Ochoa Project in 2017 (GM Aug. 18, 2017) from IC Potash Corp., Toronto.

According to its website, PolyNatura’s initial plan was to mine and process polyhalite to produce potassium sulfate, but the company is now focused on the production of “direct application polyhalite.” The company’s timeline has initial production slated for 2021, with capacity ramping up to 2 million st/y by 2023. A feasibility study and detailed engineering plan were completed in 2017, with final design and preconstruction activities underway last year. The construction of the mine and process plant are planned for 2019-2020, with an anticipated development capital budget of $328 million.

PolyNatura said the mine has proven and probable reserves of 71 million st of 88 percent polyhalite grade, giving the mine a projected life span of 38 years.

Headquartered in Greenwich, Conn., Nitron is a global fertilizer trader and distributor. The company, which was founded in 1982, said it sold 7 million tons of fertilizer in 2018, and has clients in 65 countries and 100 employees worldwide. Its list of products includes a range of nitrogen and phosphate fertilizers, potash, and specialty fertilizers.

According to its website, Nitron’s core business is fertilizer trading, with its primary sales network in Latin America. In recent years, however, Nitron said it has expanded its sales network in Europe, Africa, and North America with products purchased from China, the Middle East, North Africa, European/Baltic nations, and North America.

“Our mission at Nitron is to provide high-quality products to meet the growing demands of our clients around the world,” said Nitron President Javier Urrutia. “This offtake agreement with PolyNatura will enable us to distribute an important organic fertilizer throughout the Americas and other key markets.”

Polyhalite mining for fertilizer use has been in the news in recent years, particularly given its promise as an organic fertilizer for the burgeoning cannabis industry. Sirius Minerals plc, a large developer based in Scarborough, England, has its own polyhalite project in North Yorkshire that is also targeting first production in 2021. Sirius plans an initial production capacity of 10 million mt/y by 2024, ramping up to 13 million mt/y by 2026 and 20 million mt/y in 2029 (GM Sept. 7, 2018). The company recently reported that it has aggregate peak contracted supply volumes for 8.2 million mt/y of its Poly4 product in place.

“Polyhalite is totally water soluble and contains potassium, magnesium, calcium, and sulfur, and so provides balanced crop nutrition,” said Raymond Hoyum, affiliate professor at Auburn University’s College of Agriculture. “As growers continue to strive for high yields and improved crop quality, polyhalite should be an essential part of their total fertility program.”

Sirius Revises Proposed $3B Debt Financing Structure to Modify Credit Risk Allocation

England, Featured, News, Polyhalite, Specialty

Sirius Minerals plc, Scarborough, England, revealed this week that it is pursuing a change to the anticipated structure of its stage 2 debt financing for its polyhalite mining and processing project under development in North Yorkshire. The company said it had done this in order to “modify the credit risk allocation amongst the various potential lenders.”

Sirius is still focused on a US$3 billion senior debt facility, but this will now be put in place in three tranches, each being drawn sequentially and linked to key construction milestones for the project. Sirius previously anticipated securing its stage 2 debt financing in two tranches, one from commercial banks and one guaranteed by the U.K. government, both of which would be drawn in parallel.

Under the new plans, the company anticipates the first tranche to comprise uncovered debt raised via capital markets, with the second tranche coming from commercial banks. The expectation previously was that the U.K. government would underwrite some US$2 billion of the project loans. Under the new plan, the U.K. government-guaranteed bond tranche, should it be provided, would cover US$1 billion, and would be the third and final tranche. The company said the third tranche would come when the project is past major construction risks and sales of Poly4 – the marketed polyhalite product – are underway.

The timing of the stage 2 financing is critical to the delivery of the project on the current schedule, with first polyhalite production continuing to be projected for 2021. Sirius gave an updated estimate last fall (GM Sept. 7, 2018) of the capital funding needed to complete the development of a 10 million mt/y mining project, to US$3.4-$3.6 billion from the previous estimate of US$3 billion, Sirius had anticipated financial close of the senior debt financing by the first quarter of 2019 (GM Oct. 5, 2018).

Speaking on an investors and analysts conference call this week, Sirius Managing Director and CEO Chris Fraser would not comment on when the close of stage 2 financing is now anticipated, but he said the company has sufficient liquidity to fund the project into the second quarter. Sirius noted that as of Dec. 31, 2018, its cash position was £290 million, of which £230 million was unrestricted.

“Executing our stage 2 financing plan remains our priority. We continue to make progress towards obtaining stage 2 financing commitments and are working constructively with all relevant parties to achieve this,” Fraser said. “The progress with the lenders is continuing this quarter as we work through the due diligence reports with the lending group and progress discussions on the revised debt structure.”

The company also highlighted the sales and marketing progress it made last year for Poly4. This included the completion in the fourth quarter of the acquisition of a 30 percent equity interest in each of Brazil’s Cibra Group companies, which is linked to a supply agreement between Sirius and the Brazilian group for the resale of 2.5 million mt/y in peak aggregate volumes of Poly4 into Brazil and certain other South American countries (GM Nov. 30, 2018). Sirius now has total peak aggregate take-or-pay supply agreements in place for 8.2 million mt/y.

Fraser said negotiations are also “well-advanced” in Europe, and that concluding a European take-or-pay supply agreement remains the company’s current sales and marketing priority. He added that the company has other negotiations going on in markets such as India and Africa. Fraser said Sirius is focusing on potentially premium markets like Europe, or growth markets like India and Africa, where good quality penetration and access is needed.

Yara, Veolia Partner on Nutrient Recycling; New Ferts, Recovery Sites Planned for 2024

Europe, Featured, News, Specialty

Oslo-based Yara International ASA reported on Jan. 21 that it has signed an agreement with the global resource recovery company Veolia to develop a “circular economy” in the European food and agricultural chain by recycling nutrients and creating nutrient loops. The companies said the partnership “connects the end and beginning of today’s linear food value chain and will effectively close the nutrient cycle.”

Yara and Paris-based Veolia said they will scale-up nutrient recycling in three areas. First, the companies will develop new nutrient recycling models for fertilizer products through local recovery, processing, distribution, and sales, in addition to existing production processes. The companies said they will also create a Food-to-Agriculture value chain by collecting and processing food surpluses in cities.

Lastly, Yara and Veolia said they will develop efficient models for the management of nutrient and chemical flows – such as byproducts, raw materials, and waste – between industrial players. By combining the organic fertilizer expertise of Veolia’s subsidiary, Sede Angibaud, with Yara’s fertilizer market knowledge, the companies said these resources will be used to create organo-mineral fertilizers and/or soil improvement solutions for agriculture and the peri-urban field.

“Reducing global resource depletion and nutrient loss by increasing the recycling of nutrients such as nitrogen and phosphorus is an important task,” said Yara President and CEO Svein Tore Holsether. “The collaboration with Veolia is a contribution to our mission to responsibly feed the world and protect the planet.”

Yara and Veolia said they have already set up a circular economy loop by recycling ammonia produced from composting green waste and wastewater sludges. In addition to other recovered materials, the recycled ammonia is further processed to Sodium Nitrate and reused in wastewater facilities to prevent odor and corrosion.

Several EU countries are implanting regulations to limit waste disposal, enforce lower emissions, and mandate nutrient recovery. In addition, the new European Fertilizer Regulation (NFR) enables and incentivizes use of recovered nutrients for new crop nutrition products. Yara and Veolia said these new regulations will make large quantities of recovered nutrients available to be reused as fertilizers in agriculture. The companies said the economic potential of applying nutrient recycling to fertilizer in Europe is substantial, and potentially as high as €2 billion.

“We are delighted that Yara has chosen Veolia to support its circular economy strategy,” said Veolia Chairman and CEO Antoine Frérot. “Veolia and Yara already aim to have several new initiatives fully operational by 2024, including the launch of new fertilizer products and the startup of nutrient recovery installations in several major European cities. The collaboration between our companies is a step closer to effectively closing the nutrient cycle.”

As part of the agreement, Yara and Veolia also announced the formation of a new Nutrient Upcycling Alliance, which the companies said will promote and implement an environmentally sustainable and economically viable food system in the EU by developing business-driven projects. Yara and Veolia said they are inviting farmers’ associations, food brands, retailers, municipalities, government bodies, and other industries managing waste streams to join the alliance, which they describe as a “fundamental redesign of the food value chain.”

OCP, Fertinagro Set Up NPK Production JV

Europe, Morocco, News, News Briefs, NPK, Specialty

OCP SA, Casablanca, on Jan. 24 announced the establishment of a joint-venture company with Spain’s Fertinagro Biotech SL for the production of high-analysis NPKs, as well as fertilizers enhanced with urease inhibitors, bio-stimulant, and micronutrients, for sale to the international market.

The two parties will each hold a 50 percent stake in the new company, which has been named OCP-Fertinagro Advanced Solutions. They plan to build a production facility at Jorf Lasfar, Morocco, which OCP said will have an initial annual capacity of 250,000 mt of specialty NPK fertilizers by 2020. OCP said there would be room for expansion to up to 1 million mt/y of further ranges of enhanced plant nutrition solutions “tailored to specific farming conditions and crop requirements.” The new company also intends to set up advisory services to farmers.

“The joint venture anchors the ambition of both partners to sustainably address the growing demand in enhanced and ‘technology’ fertilizers, and to expand their offerings to farmers worldwide in terms of customized products and services,” said Marouane Ameziane, OCP Group’s Executive Vice-President, Strategy & Corporate Development. He added that the joint venture is in line with OCP’s “farmer centricity” strategy.

OCP completed the acquisition of a 20 percent stake in Fertinagro Biotech last October (GM Oct. 19, 2018). Earlier this month, local media reported that the two companies had formed a 50:50 subsidiary company and planned to build what was described as “an industrial unit” with an initial capacity of 250,000 mt/y (GM Jan 11, p. 26). OCP did not respond to Green Markets for comment at the time.

Hocking International Laboratories – Management Brief

Management Briefs, Specialty

Hocking International Laboratories, San Marcos, Calif., announced several new hires in its commercial organization on Jan. 21. Brady Boyd has joined the company as Ag Area Manager – South, and will cover the states of Texas, Louisiana, Mississippi, Arkansas, and Oklahoma from his location in Little Rock, Ark. Boyd comes to Hocking after spending nearly five years in sales at AgroLiquid.

Rob Deacon has joined Hocking as Area Manager – Southwest, and will handle both ag and turf/ornamental customers in Arizona, New Mexico, Colorado, Utah, southern California, and Nevada. Deacon is based in Phoenix, Ariz., and comes to Hocking from NutriAg. He has also held previous positions with Compass Minerals and Wilbur-Ellis.

Mark McCostlin has joined Hocking as Ag Area Manager – Midwest, and will be covering Nebraska, Iowa, Kansas, Missouri, and Illinois from his location in Kansas City, Mo. McCostlin’s previous work experience includes positions with The Andersons Inc., Haifa, Brandt, and others.

Scott Messer has been promoted to Director – Ag Sales East, and will have responsibility for the entire eastern region for Hocking’s Ag division. Messer will also be asked to help develop and drive strategy in the Ag sector for the company. He previously served as Ag Area Manager – East for Hocking. Boyd and McCostlin will report to Messer, along with future east region area manager personnel.

Hocking also announced the hiring of Kris Assel as Director of Marketing for the company. Assel will be based at the company’s San Marcos headquarters, where he will help build the Hocking’s customer offerings. Hocking said Assel has extensive marketing experience with companies in various industries.

“We are experiencing significant growth in our company in both the Ag and T&O sectors,” said Mark Auchampach, Vice President of Sales and Marketing for Hocking. “We are committed to building a first-class commercial organization to enable sustained growth in all segments. Our customers look to us to provide solutions to help grow their brands. We will continue to build our team to ensure we can provide the service to our customers that they deserve and expect.”

Hocking is a chemical manufacturer of agricultural fertilizers, crop protection products, and other specialty products. The company’s activities include R&D innovation, manufacturing, and in-house custom packaging of fertilizers, nitrogen stabilizers, water and solvent based crop protection products, dry flowable herbicides, adjuvants and surfactants, and other agricultural and industrial products.

Arianne Phosphate – Management Brief

Canada, Management Briefs, Phosphate

Arianne Phosphate, the development-stage phosphate mining company advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, announced on Jan. 24 that it has named Andrew Malashewsky as its new Chief Financial Officer. Malashewsky will replace James Cowley, who has served as Arianne’s interim CFO.

Malashewsky is a chartered professional accountant and began his career with Grant Thorton LLP before joining JDS Energy & Mining Inc. During his time at JDS, Malashewsky was active in assisting several of their portfolio companies through project financing, and was part of the team that completed the sale of JDS Silver to Coeur Mining.

“Andrew is a welcomed addition to the senior management team,” said Brian Ostroff, CEO of Arianne. “Given Andrew’s experience in successfully completing several project financings and M&A transactions, he is a perfect fit for where Arianne is now. Andrew will be working closely with myself, our advisors, and potential offtake and strategic partners to help advance our Lac à Paul project into development.”

In conjunction with the appointment, Arianne said Malashewsky has been granted 100,000 stock options. Each option entitles the holder to purchase one common share of the company until Jan. 23, 2029, at a price of $0.4325 per share, or the closing price of the company’s shares on the trading day preceding the date of grant. The options are subject to a vesting period and are also subject to regulatory approval.

Bunge Limited – Management Brief

Management Briefs

Bunge Limited, White Plains, N.Y., announced on Jan. 22 that Gregory A. Heckman, 56, has been appointed acting CEO, effective immediately. He replaces Soren Schroder, who previously announced his intention to step down. Bunge said its CEO search committee continues its “thorough and deliberate” work to find a permanent CEO as soon as practicable.

Bunge referred to Heckman as a “seasoned agribusiness executive” with more than 30 years of experience in the agriculture, energy, and food processing industries. He joined the Bunge board in 2018, and is a founding partner of Flatwater Partners, a private investment firm. Heckman previously served as CEO of The Gavilon Group LLC, prior to the sale of its agriculture business to Marubeni Corp. and its energy business to NGL Energy Partners. Heckman led the formation of Gavilon, the successor to ConAgra Trade Group, and oversaw the spinoff of ConAgra Trade Group from ConAgra Foods after a 24-year career at ConAgra Foods.

“Greg has been a valuable addition to our board and Strategic Review Committee and we are pleased to appoint him as our acting CEO,” said Kathleen Hyle, Bunge’s Non-Executive Board Chair. “Our committee has benefited from his counsel and expertise. With Greg in this role, we have a greater opportunity to leverage his perspective, deep industry knowledge, and leadership experience, as we take action to improve our results and sharpen our operational focus and execution.”

Bunge also announced that L. Patrick Lupo, Ernest Bachrach, and Enrique Boilini, three of its longest-serving board members, will not stand for re-election at the company’s 2019 Annual General Meeting of Shareholders. Each will remain on the board until their terms expire in May 2019.

In addition, Bunge announced on Jan. 11 that Brian Zachman has been named President of Global Risk Management. Zachman, 47, has held portfolio management positions focused on agricultural commodity derivatives since 2012, most recently with Millennium Limited Partners. He previously worked at Bunge from 1999 to 2012, serving in a number of commercial and trading roles within Agribusiness. Prior to that, he held various commercial and merchant roles with Cargill and ConAgra.

Green Lawn Fertilizing – Management Brief

Management Briefs, Specialty

Green Lawn Fertilizing, West Chester, Pa., announced on Jan. 23 that Michael Heiner has joined the company as its Corporate Director of Human Resources. In his new position, Heiner will oversee employee benefits, payroll, risk management, employee relations, and all talent acquisition and development for both Green Lawn Fertilizing and Green Pest Solutions. He will report to company president Matt Jesson.

Heiner has more than 20 years of HR experience, most recently serving as Corporate VP of Human Resources and Administration for a large HVAC and plumbing company. Before that he spent more than 14 years as VP of Human Resources for a leading food distribution company.

Founded in 2004 as an independent lawn and pest control company, Green Lawn Fertilizing and Green Pest Solutions reported that they are currently hiring for multiple positions, including lawn and pest technicians, sales, and customer service. The company has more than 130 employees and over 80 service vehicles in its fleet. In his new position, Heiner will oversee plans to add 80 new hires in 2019.

BHP – Management Brief

Management Briefs

BHP reported on Jan. 22 that Group Company Secretary Margaret Taylor has given notice of her resignation, and will cease to be a company secretary of BHP Group Ltd. and BHP Group Plc, effective March 1, 2019. Caroline Cox, currently General Counsel of BHP, will also assume the role of Group Company Secretary, and has been appointed a company secretary of BHP Group Ltd. and BHP Group Plc, effective March 1, 2019.

Geof Stapledon remains a company secretary of BHP Group Plc, and has been appointed company secretary of BHP Group Ltd., also effective March 1, 2019. Rachel Agnew remains a company secretary of BHP Group Ltd. and BHP Group Plc.

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