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sdholloway56
Senior Advisor

Farmer owned green N

I never considered it entirely a coincidence that the government Ag boom kicked off just as most of the last of the fertilizer assets were pried away from the co-op system.

If you still owned it as least you'd be getting dividends back off the $700-1000/ton profit margins on NH3.

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18 Replies
clayton58
Veteran Advisor

Re: Farmer owned green N

if not a coincidence, would you consider it a conspiracy?  And who are the players?

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sdholloway56
Senior Advisor

Re: Farmer owned green N

oh, Cargill, Nutrien, the Kochs some others.

The one thing you could count on in the co-op world was inferior management and boards.

Amateurs playing with pros.

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sdholloway56
Senior Advisor

Re: Farmer owned green N

The co-ops could continue on as primarily retail outlets and Co-Bank (Farm Credit) had a safe, easy to manage loan portfolio.

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BA Deere
Honored Advisor

Re: Farmer owned green N

I vow to not get political, even though this thread is seeping political.  Demand for nitrogen is worldwide, India is behind the 8-ball and will soak up all available nitrogen $950/urea is where the bar is set (according to Josh Lindahl Stone X).   Putting up new nitrogen plants is a good idea (and we have) but $1/lb today and 30¢/lb tomorrow, you can`t build a church expecting the attendance of Easter Sunday.   Russia and Egypt limiting exports.   We had hurricane Ida issues, there`s a fair amount of runway behind us.

Here`s what one new Iowa Nitrogen plant has to say.

https://www.greatamericancrop.com/news-resources/article/2017/04/21/new-iowa-nitrogen-plant-opens  

snip

Due to changing economics in producing nitrogen fertilizer with the ready supply of natural gas found in the Bakken region, many companies, and even commodity groups, decided they would build nitrogen-producing facilities over the last decade. The Bakken region encompasses parts of Montana and North Dakota in the U.S. and Saskatchewan and Manitoba in Canada.

However, the reality of raising enough money to cover construction costs, as well as increasing building costs over the years, prevented most groups from ever getting plans off of paper and moving soil. Several existing nitrogen-producing facilities were rebuilt and began to produce increased amounts of nutrients in recent years. But the IFCo plant marks a significant accomplishment in the fertilizer industry.

sdholloway56
Senior Advisor

Re: Farmer owned green N

Doin’ the BA two step in double time.

Yeah, globalization is turble and responsible for all our troubles.

But gee, its global. Whocouldathunkit!!!

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sdholloway56
Senior Advisor

Re: Farmer owned green N

Gubmint/corporate agriculture good.

Capitalism bad.

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Re: Farmer owned green N

So, which is it.

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BA Deere
Honored Advisor

Re: Farmer owned green N

SD Holloway is saying that the rest of the world is awash in cheap nitrogen and it`s only America that has $1100 NH3 of which there are $900/ton profit....so under that logic, every time farmers bought anhydrous under $900/ ton the domestic fertilizer producers were breaking even or losing money???  Boy, they were sure generous for many years, I nominate the Koch brothers for sainthood!

We could invade Borat`s home country for some cheap potash   🙂  

BADeere_0-1636630737207.jpeg

 

sdholloway56
Senior Advisor

Re: Farmer owned green N

I’m saying that the technology to produce a cheap, stable, near carbon neutral source of N is well within reach.

The Kochs, CFS et al are not going to do it for you.

And yes, if an under capitalized conventional startup entered the market they would just cut prices for a couple years, buy it for pennies on the dollar and then start shutting “inefficient” plants in order to regain market power. An oligopoly has you by the throat.

N margins were already huge even before the current global mess.

The only way to beat that gorilla is with at least the help of a bigger gorilla- which is the dadburn gubmint.

Which is why the Koch’s et al have devoted themselves to convincing people that the gubmint is bad.

 

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