All Posts from March 25, 2016

NutrientStar to provide data on efficiency products

Declaring that nitrogen fertilizer is one of the most important inputs in agriculture, but that up to half is going to waste, the Environmental Defense Fund (EDF) recently launched NutrientStar, a new independent, science-based program that will review the performance of commercially available nutrient management tools.

The Fertilizer Institute has been involved in an ongoing dialogue with EDF on NutrientStar. “We have members whose products are being evaluated,” said TFI spokeswoman Kathy Mathers. “We share the same high-level goals of helping farmers manage our products in a sustainable manner, and as such, we will continue the dialogue.”

EDF noted that much has been done already. For one, major food companies are launching sustainable sourcing programs to reduce fertilizer runoff, improve air and water quality, and reduce the risk of supply chain disruptions. Many of them, including EDF, have joined Field to Market, a diverse alliance of over 200 entities pursuing sustainable agriculture across the supply chain. Fertilizer industry members include associations TFI and Agricultural Retailers Association, as well as several major fertilizer companies. Several major retailers, such as Walmart and food suppliers are also members. Walmart, McDonald’s Corp., and PepsiCo were early advocates of sustainability (GM Aug. 16, 2010).

EDF says little data is publicly available on how these tools work in the field. “NutrientStar will showcase how well products work in real-world farming scenarios,” said Karen Chapman, agricultural sustainability project manager at EDF and administrator of the NutrientStar program. “This isn’t really about the fertilizer industry. It’s about holding agricultural service providers – people who make the tools and products and decision support systems for fertilizer management – to a common standard and assessing the performance of the tools they offer against that standard in a more transparent fashion than we currently have today. Farmers don’t see the data on performance of these tools. They are being marketed tools without clear knowledge of their benefits. NutrientStar’s independent science review panel will conduct rigorous assessments of all tools on the market, particularly looking at on-farm field trials, to determine how a tool works in croplands, in different regions, and on different soil types.”

Chapman pointed out that fertilizer management tools to be reviewed through NutrientStar include enhanced efficiency fertilizer compounds, such as nitrogen stabilizers, and decision support tools, such as optical sensor technologies or models used to aid nutrient applications in the field.

Tools and products assessed or soon to be assessed include Adapt-N, which is an online software made by Agronomic Technology Corp. using a linked crop model and soil model to estimate nitrogen rates for individual fields or areas within fields; N-Serve by Dow AgroSciences; and Agrotain, Agrotain Plus, and Super U, made by Koch Agronomic Services. Reviews being made public this spring include Nutrisphere N by Verdesian Life Sciences, Instinct II by Dow, and ESN by Agrium Inc., as well as those for dicyandiamide (DCD) and thiosulfate, and Slow Release Foliar N products made from methylene urea.

Assessments later in 2016 will focus on Fieldview Pro Nitrogen Advisor made by Climate Corp. and Encirca by DuPont Pioneer

“NutrientStar is the first-ever review program to provide farmers, their advisors, and agricultural supply chain companies with reliable data on the performance of these popular tools,” noted John McGuire, EDF advisor and precision agriculture expert. “Farmers need certainty that the tools they purchase will work as advertised.”

An independent review panel composed of leading soil and agronomy scientists from across the country will establish the criteria for NutrientStar review. The panel assesses tools based upon available data demonstrating their ability to improve nutrient use efficiency, defined as unit of yield over unit of applied nutrient, in the field. NutrientStar review will also show yield impacts from use of a tool and summarize key characteristics important to farmers and advisors such as cost/benefit, ease of use, and required data inputs.

The NutrientStar program also will establish guidelines for field testing nutrient-use efficiency tools, setting standards and providing a geographical framework that can substantially advance the research agenda in ways that will benefit the entire agriculture industry.

Despite some media reports that have likened NutrientStar to a Consumer Reports-style rating service, that is not the case, NutrientStar Communications Manager Christina Mestre told Green Markets. She said as of now, NutrientStar will not rate or endorse any tool or product. Instead, she likened it more to Car Fax.

“NutrientStar will report on the availability of data and the extent to which it is possible to make a determination of nutrient use efficiency benefits based on that data,” said Mestre. “However, farmers, ag retailers, and other practitioners can use the assessment information to choose the best product for their needs. The website will provide data on a tool’s ability to improve nutrient use efficiency.

“We also encourage companies to seize the opportunity to share data that documents the efficacy of their product using robust testing protocols established by NutrientStar, thereby increasing transparency and consumer trust,” Mestre added.

PhosAgro moves back to black, positive on Brazilian market

PhosAgro OJSC reported a RUB36.44 billion ($598 million) net profit in full-year 2015 on revenues of RUB189.73 billion ($3.11 billion), compared with 2014’s net loss of RUB13.40 billion ($349 million) and revenues of RUB123.12 billion ($3.21 billion). EBITDA more than doubled in 2015 to RUB82.46 billion ($1.35 billion), up from RUB37.61 million ($979 million).

Fourth-quarter 2015 net profit was RUB4.89 billion on revenues of RUB47.43 billion, up from the year-ago net loss of RUB19.67 billion and revenues of RUB36.37 billion. Fourth-quarter 2015 EBITDA was up 66 percent, to RUB19.66 billion from the year-ago RUB11.86 billion.

PhosAgro said the significantly higher USD exchange rate during 2015 in comparison with 2014 had a net positive impact on the company’s results in the reporting period, as prices for most of the company’s products are denominated in USD while costs are primarily rouble-based. The company had cited rouble depreciation, as well as losses from derivative financial instruments, as causing 2014’s net loss (GM May 1, 2015). Even so, the significant depreciation of the rouble as of Dec. 31, 2015, compared with Dec. 31, 2014, resulted in a foreign exchange loss of RUB22.18 billion ($364 million) in 2015 against RUB33.55 billion ($873 million) in 2014.

PhosAgro reported a doubling in gross profit to RUB97.09 billion for its Phosphate segment for the full-year 2015, up from RUB47.68 billion a year-ago, and a 58 percent rise in revenues to RUB167.43 billion. Phosphate-based volumes were up 11 percent, to 5.38 million mt from 4.84 million mt.

Nitrogen gross profit increased 20 percent to RUB9.51 billion on a 30 percent rise in revenues, to RUB21.57 billion. Nitrogen-based volumes, however, were 1 percent lower in 2015, down to 1.37 million mt, from 1.39 million mt.

PhosAgro said its sales to Europe grew by over 30 percent year-on-year in 2015, with the company now selling directly to local distributors following the opening of a new trading offices in the region, in Zug, Switzerland (GM Oct 19, 2015), and it expects to achieve even better results this year.

PhosAgro launched a new sales office in Warsaw, Poland, in March 2016, which it said will continue to strengthen the company’s position in that part of Europe. However, the company noted that the proportion of revenue contributed by certain other regions fell in the fourth quarter of 2015 compared to the same year-earlier quarter. India fell to just 1 percent of the total in fourth-quarter 2015 from the year-ago 5 percent, while North and South America was down to 23 percent from 29 percent, with Brazil the weakest market last year.

PhosAgro believes the phosphate market is ready for recovery in Brazil. “Brazil’s farmers are [now] in a better situation, with the subsidy pushed through the banking system and solid farmers’ margins on the back of the weak real,” CEO Andrey Guryev said. Brazilian farmers may import up to 6.7 million mt of phosphate fertilizers this year, up from around 5 million mt in 2015, when the country’s economic crisis cut demand. The company also has started trading directly with local distributors in the country since opening a sales office in São Paulo.

Guryev believes there is significant potential for increased agricultural output in Argentina. Following the election of a new president and a new government there and the liberalization of agricultural exports, he said a significant increase in imports of phosphate fertilizers already had been observed this year, with the country buying 300,000 mt already this quarter after cutting purchases to about 600,000 mt last year. PhosAgro also expects consumption in Asian to be strong, with India this year buying a similar level of phosphate-based imports to 2015’s 6 million mt or so.

PhosAgro said its major projects under development are on track. It expects to finish construction of the new 760,000 mt/y ammonia and 500,000 mt/y granular urea plants at PhosAgro-Cherepovets in August 2017, with first production anticipated one to two months thereafter. The new ammonia production will enable PhosAgro to be self-sufficient in ammonia. It also intends to invest further in expanding the number of NPK and other fertilizer grades it produces.

OCP 2015 result up on higher rock, acid revenues, African sales, & Indian demand

Morocco’s OCP SA reported a 55 percent increase in full-year 2015 EBITDA, to MAD17,660 million ($1.8 billion) on revenues of MAD47,747 million ($4.9 billion), up from 2014’s MAD11,402 million ($1.4 billion) and MAD41,436 million ($4.9 billion), respectively.

Fourth-quarter EBITDA was 31 percent higher year-on-year at MAD3,737 million ($377 million) on revenues of MAD10,610 million ($1.1 billion), up from the year-ago MAD2,848 million and MAD10,521 million, respectively.

“Our ability to deliver improved fourth-quarter margins in a difficult industry environment reflects targeted investments over recent years to enhance our production optimization and achieve further cost efficiencies,” said Mostafa Terrab, OCP chairman and CEO. “In the quarter, we benefited from transportation and energy cost savings following the ramp-up of the slurry pipeline, and realized competitive raw material sourcing.” He said the investment program is also increasing the company’s industrial flexibility, which enables it to quickly adapt its production mix to optimize capacity and margins.

OCP attributed the 15 percent year-on-year increase in full-year revenues on a local currency basis to higher phosphate rock and acid revenues, which, it said, offset decreased fertilizer sales. The company’s 2015 top-line results benefited from higher prices for rock and acid, stable fertilizer prices, and growing Indian demand and higher sales to Africa. These compensated for lower Brazilian fertilizer imports and higher Chinese exports.

In local currency terms, full-year revenues from phosphate rock came in 24 percent higher at MAD12.83 billion, up from MAD10.30 billion a year ago, while phosphoric acid revenues increased 34 percent to MAD11.37 billion from MAD8.45 billion. Fertilizer revenues were 4.2 percent higher at MAD19.39 billion, up from MAD18.61 billion.

OCP said it achieved a “significant” increase in new product sales through expanding in high-growth markets, notably Africa. In 2015, Africa accounted for 24 percent of the company’s total fertilizer exports, up from 13 percent in 2014. The company’s sales of new finished products to all markets increased nearly 50 percent to 1.19 million mt last year, up from 796,000 mt a year ago.

OCP’s 2015 capital expenditure totaled MAD14,264 million ($1.5 billion) as part of its ongoing industrial investment program, initiated in 2008. Key projects completed last year were: the continued ramp-up of the Jorf Lasfar slurry pipeline, which transported 6.5 million mt of rock in 2015, more than double the 2.7 million mt transported in the previous year, resulting in MAD0.8 billion of cost savings; the first integrated fertilizer plant at Jorf Lasfar became operational in the first half of the year, with the second plant expected to come online by mid-2016; the first phosphoric acid line adapted for processing phosphate pulp was launched in September; and the desalination plant at Jorf Lasfar had its first start-up tests in July and has since begun commercial operations.

Looking ahead, OCP sees stable-to-softening conditions in the phosphate market this year, but expects continuing resilience in comparison to other commodities. While it anticipates improving demand in the Americas – the U.S., Brazil, and Argentina – higher inventories in India and subsidy decisions suggest lower Indian imports especially in the first half, it said.