Ag industry reacts to CF's $l.7 billion expansion

Thursday, November 8, 2012
Steve Galles, manager of Agri-Partners, in Merrill, is quick to admit that brief pauses as for the photo above are few during the company's current fall fertilization application schedule. Steve Betts, Agri-Partners' vice president of agronomy, agrees and said this year's early harvest and recent weather have allowed application to move ahead "about a month" ahead of normal. Betts also said the recent announcement of CF Industries' planned $1.7 million expansion "is good" for his company and producers alike.

Representatives of Iowa's agricultural industry have been quick to voice optimism on the impact of last week's $1.7 billion expansion of CF Industries Port Neal fertilizer facility on agriculture in northwest Iowa.

Steve Wilson CEO of the Deerfield, Ill.-based company said the Port Neal expansion plans combined with those at CF's Donaldsonville, La., plant will give CF an annual production capacity of 2.1 million tons of gross ammonia.

He said the expansions will also include upgraded production ranging from 2.0 to 2.6 million tons of granular urea and up to 1.8 million tons of UAN solutions.

He said during his announcement that the expansion locally will also mean a doubling of the Port Neal work force with 100 new jobs.

The expanded portion of the facility is expected to "come on line" in 2016.

Overall, expansion investment in the Iowa and Louisiana operations is put at $3.8 billion.

Steve Betts, vice president of agronomy for Agri-Partners, Albert City, supervising services provided at the company's Merrill location and at eight additional northwest Iowa locations acknowledges he sees local producers benefiting from the CF project.

"It's a good thing for the agriculture industry," Betts said adding that his company has done business with the Port Neal facility for "sometime" and that the facility has been "a good provider" during this period.

"While it (fertilizer) still comes down to competitive pricing being a factor, this expansion can give producers, and us, the opportunity of a timely supply of fertilizer, and a closer supply available, for many years to come," he said.

The project is seen as being good long-term for Agri-Partners and producers," Betts said.

He also noted that this year's early harvest and recent weather have meant an "earlier than usual" fall fertilizer application period.

The applications, which are "about a month earlier than normal," keep Agri-Partners' business strong at the present time.

This week's latest Iowa USDA crop report bears out Betts' statements on local fall fertilization indicating that "most farmers" in Iowa are proceeding with their application of fertilizer, including anhydrous.

The report also indicates installation of conservation practices such as terraces and grass waterways is proceeding at a rapid pace given the current weather conditions.

Meanwhile, U.S. Secretary of Agriculture Tom Vilsack, in a weekend Sentinel interview while in Sioux City, reacted this way to the announced CF expansion project:

"First of all, immediately it's a good shot in the arm for the community because it indicates the community is on the move," Vilsack said. "It's obviously going to lead to a lot of construction jobs that will stimulate the economy initially.

The additional 100 permanent jobs, good-paying jobs which are part of the project allow folks to support the community, he added.

Vilsack also commented on the project's impact on agriculture, including that in northwest Iowa.

"For agriculture specifically what this means is a less expensive supply of fertilizer (available) because it will not have to travel quite so far for producer-users in the tri-state area," he said. "The bottom line for farmers is that the fertilizer is going to be less expensive."

Vilsack said that he sees the expansion as important also to Iowa despite a similar project in southeastern Iowa "being a little controversial" because of the support being provided by the state.

"The (northwest Iowa) project is something that plays into the strength of production agriculture in the state," he said. "Anything that we can do to help production agriculture to grow is important," he continued.

Iowa (agriculture) has had record income, record exports and record conservation efforts, according to the ag secretary.

"This is just going to continue that momentum," he added.

Iowa Gov. Terry Branstad said following the CF announcement that he, too, is aware of what the expansion means to Iowa calling the investment one which "will have a major impact" for this area of the state as well as neighboring states.

The expansion by CF Industries, is viewed as the largest capital investment in Iowa history.

CF is a fertilizer brokerage company organized in 1946 and acquired the former Sioux City-based Terra Industries in 2010.