Bismarck—The North Dakota Agricultural Products Utilization Commission (APUC) awarded funding requests totaling $348,165 at its quarterly meeting July 19, with $100,000 of that tentatively going to the proposed nitrogen plant in the Northern Plains. The Northern Corn Development Corp., Fargo, was awarded $100,000 to assist in acquiring accounting, marketing, and legal services. The company will use these resources to develop a business plan and acquire the necessary equity to launch a plant that will target gas currently being flared in the Bakken oil formation. However, the APUC noted that funding is pending depending on the completion of contingencies. Also pending contingencies was a $75,000 award to Progressive Nutrient Systems, Fargo, to defray the costs associated to demonstrate the technical feasibility of a distributed modular ammonia synthesis process, and the business plan/economic opportunity for a modular distributed ammonia based system. APUC is a program of the N.D. Department of Commerce that administers grant programs for researching and developing new and expanded uses for North Dakota agricultural products.
Israel Chemicals Ltd. has dropped out of the Israeli government tender for the privatizing of the southern port of Eilat. The company was the sole bidder in the tender. However, the government decided to extend the tender until Aug. 5 in hopes that other interested parties would reconsider. The ICL bid came under strong public criticism over the dominant position of the Israel Corp. (which owns the majority stake in Israel Chemicals) in the local economy.
K+S Group reported today that second quarter revenues and earnings are significantly above the corresponding previous year’s figures and as well as current consensus expectations. This is due to strong overseas business and a good early stocking-up in Europe in the Potash/Magnesium segment. Revenues of the K+S Group reached € 996.5 million (Q2/11: € 821.7 million) and operating earnings EBIT I reached € 219.8 million (Q2/11: € 181.9 million). K+S will release complete earnings results Aug. 14.
Compass Minerals reported net earnings of $9.5 million on sales of $178.5 million for the second quarter ending June 30, 2012, compared to the year-ago $14 million on sales of $179.9 million. Increased SOP production costs were a negative factor. Actual specialty potash sales were up at $56.2 million from $49.5 million with volumes up at 91,000 st from 83,000 st. Operating earnings from the segment, however, were down at $13.9 million from $18.7 million.
The Trading Corporation of Pakistan closed its last tender for the season by issuing a 50,000 mt award to Keytrade at $419.39/ CFR. The price is $7/mt lower than what TCP paid to CHS earlier this month. Nine companies participated in the tender with the highest offer at $447.39/mt CFR.
In the run up to this last tender, sources were expecting to see higher prices. In the end, the price was only higher than what IPL India paid in its tender.
The 50,000 mt closes the TCP buying authorized by the Pakistan government. The government wanted the trading house to bring in 300,000 mt to cover shortfalls in domestic production.
Pakistani producers complained that the only reason there was a shortfall in urea production was because of a government decision to divert natural gas from the industrial sector to the domestic use. In the period leading up to the first couple of tenders the producers argued they could cover the 300,000 mt needed for less than the imports if they were only provided the natural gas they need.
Of the 250,000 mt already ordered, TCP reports that 110,000 mt has arrived in the country and is on its way to regional distributors.
Tampa: On July 26, PotashCorp settled at $170/lt for molten delivered to Tampa for the third quarter, down $10/lt from the second quarter. Mosaic had settled the previous week at the $170/lt level for the third quarter as well. The change is posted in this week’s price index.
Refinery operating capacity continued to be very high last week, according to the Department of Energy. The operating rate was up 1 percent, from 92 percent to 93 percent. One reason for the high operating rate was that the DOE had removed some refineries from the formula which were no longer producing.
U.S. Gulf: Prices were in the $180-$185 range for prill exports.
U.S. Imports: May imports were up 12 percent, to 183,370 st from the year-ago 163,170 st. July-May imports were off 1 percent, to 2.15 million st from 2.18 million st.
Vancouver: Prices were down $15-$20/mt FOB at Vancouver for domestic purchases. Export contracts were still in the $180-$200/mt FOB range.
Benelux: The current price range was $212-$220/mt FOB.
Washington—USDA Secretary Tom Vilsack on July 25 designated 76 additional counties in six states as primary natural disaster areas due to damage and losses caused by drought and excessive heat. During the 2012 crop year, USDA has designated a total of 1,369 counties across 31 states as disaster areas, with 1,234 of those designations due to drought. The additional counties designated on July 25 are in Indiana, Illinois, Kansas, Michigan, Nebraska, and Wisconsin. All qualified farm operators in the designated areas are eligible for low-interest emergency loans. “The President and I are committed to ensuring that agriculture remains a bright spot in our nation’s economy by sustaining the successes of America’s agricultural economy through these difficult times,” Vilsack said. “As USDA officials visit drought-stricken areas to stand with our producers and rural communities, the urgency for Congress to pass a food, farm, and jobs bill is greater than ever. The hardworking Americans who produce our food and fiber, feed for our livestock, and contribute to a home-grown energy policy – they need action now. That is why USDA is taking every possible step to help farmers through this difficult time.” USDA also announced that it will allow additional acres under CRP to be used for emergency haying or grazing. The action will allow lands that are currently classified as abnormally dry but not yet under severe drought to be used for haying and grazing. In addition, USDA is allowing producers to modify current Environmental Quality Incentives Program (EQIP) contracts to allow for grazing, livestock watering, and other conservation activities, and has authorized haying and grazing of Wetlands Reserve Program (WRP) easement areas in drought-affected areas where haying and grazing is consistent with conservation of wildlife habitat and wetlands. Vilsack also reduced the interest rate for emergency loans from 3.75 percent to 2.25 percent, and announced plans to encourage crop insurance companies to provide a short grace period for farmers on unpaid insurance premiums.
Washington—Agricultural Retailers Association (ARA) Chairman Billy Pirkle testified before the House Committee on Oversight and Government Reform on July 19, addressing what ARA described as “unnecessary and burdensome regulations” that are the result of recent actions by the U.S. EPA. Pirkle, who also serves as the senior director for Environmental, Health and Safety for Crop Production Services (CPS), cited EPA Region 4’s decision to issue citations to agricultural retail facilities for failing to report when fertilizer was blended at the facility under the Emergency Planning and Community Right-to-Know Act (EPCRA). Pirkle said the EPCRA statute applies to fertilizer manufacturers only, and specifically exempts “fertilizer held for sale by a retailer to the ultimate consumer.” He said that if a retailer had to meet all EPCRA reporting requirements plus the permitting requirements under other environmental laws, it could cost an additional $30,000 per year, plus a $6,000 annual update. “Nearly all agricultural retailers custom blend types of fertilizer at the retail site for farmer customers because farmers do not have the equipment to blend in the field,” he said. “Furthermore, blending fertilizer is a different process than manufacturing fertilizer.” Another key issue Pirkle addressed was the requirement that pesticide applicators obtain a National Pollutant Discharge Elimination System (NPDES) permit under the Clean Water Act (CWA) to conduct any pesticide applications. Pirkle said this is unnecessary since pesticides are already evaluated thoroughly by EPA under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Pirkle noted as well that the Reducing Regulatory Burdens Act (H.R. 872), which has been introduced as part of the House version of the Farm Bill, would exempt FIFRA-compliant pesticide applications from CWA permitting requirements. Other examples of regulatory overreach cited by Pirkle include EPA’s proposed spray drift guidance document that changes the legal standard found in FIFRA to an essentially zero-tolerance spray drift standard; EPA’s proposed guidance document to expand jurisdiction of the CWA without obtaining the necessary statutory changes or going through the formal rule making process; numeric nutrient criteria regulations in Florida, the Mississippi River Basin, and the Chesapeake Bay; dust regulation in the agriculture industry; and Greenhouse Gas regulations and the increased compliance costs to the suppliers of agricultural retailers, which he said would be passed along to the retailer and farmer.
Los Angeles—Rentech Nitrogen, LLC, a wholly-owned subsidiary of Rentech Nitrogen Partners LP and Yara North America Inc., on July 23 announced that they have entered into a long-term agreement for the exclusive rights to purchase and distribute the diesel exhaust fluid (DEF) produced at the Rentech Nitrogen facility in East Dubuque, Ill., under Yara’s Air1® brand. The agreement comes just ahead of Rentech Nitrogen’s urea expansion and DEF build-out, to be completed later this year. Rentech Nitrogen will supply Yara, a leader in the DEF market, with DEF from its urea liquor stream. The East Dubuque location will allow Yara to service targeted high-demand DEF markets in the Midwest, including Wisconsin, Illinois, and Iowa. Additionally, the plant’s location near major transportation arteries will allow Yara to supply DEF to the Rockies, other central U.S. states outside the Midwest, and Canada. The agreement further demonstrates Yara’s commitment to expanding its global production and distribution capabilities in-line with domestic DEF market growth. In June, it announced the opening of a DEF terminal in Bayonne, N.J., the most recent addition to Yara’s coast-to-coast network of terminals throughout North America.
St. Paul, Minn.—CHS Inc. reports that it is currently considering a plea with respect to an investigation by the U.S. Environmental Protection Agency and the Department of Justice. This dates back to a Nov. 21, 2009, incident when a late-night fire destroyed a shop, a warehouse containing some feed, seed, and agronomy products, and part of the office at the Malta, Mont., branch of Milk River Cooperative, a CHS-owned facility. CHS said its local staff worked with local emergency officials to respond in a timely manner in keeping with accepted protocols and in what all parties believed was in the best interests of community health and safety, and to eliminate any environmental impact. There were no injuries, and the fire was extinguished in a short period of time CHS said it promptly notified both the Montana Department of Environmental Quality (DEQ) and the Montana Department of Emergency Services. All remediation work was overseen by West Central Environmental Consultants and completed under the supervision of the Montana DEQ. However, CHS said a follow-up review by EPA determined that while CHS had notified the required state agencies, notification was not made to the National Response Center, which may or may not have been required depending on whether or not there was a release of a reportable quantity of certain listed chemicals. To date, no formal legal action has been commenced, and CHS said it is cooperating with the federal agencies and is exploring the possibility of a settlement in the form of a possible plea agreement. It expects a plea would require a financial penalty, but that it would not be materially adverse.
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