FNA Announces Limited Partnership Moving On Fertilizer Plant.

[Rareearth]

Years back farmers were asked to invest in the
hog industry. Many communities invested in
tangible (depreciating) barns and yard structure.
Sounds good but... All feed was supplied,
genetics and or breeding stock, trucking in and
out, sales through marketing companies,
slaughter plants, retailers, etc.

The core ideals were there, control and
opportunity were not. Everything going into the
barns, and everything going out was controlled by
others, they would never make a profit. At best
they wound make bank rate returns and at worst...

For a nitrogen plant to survive it has to be small
enough that the farmer investors can take and
use all production , at a very handsome price,
don't offer product for retail sales, not to threaten
the big boys. Must have poison pill for the shares.
Make the plant scalable, original investors can
benefit through dividends on expanded production
and new share holders,etc

Been there're, done that.

[bobfriesen]

I’ve been reading with interest the comments about the FNA Fertilizer Limited Partnership Seed Capital launch. Some of the concerns expressed are certainly legitimate and we take them very seriously. We have already, and will continue to hold farmer meetings to get as much constructive input as possible. Please attend – go to www.projectn.ca to find out more details. Let me address a few of the issues raised:

• In the past farmers have invested in projects that failed. That is certainly true. One of the biggest strengths of a farmer owned fertilizer manufacturing project is that the farmer owners will be investing in something that produces a product that they themselves create a growing demand for. Similar to a livestock farmer building an on-farm feed mill to avoid paying the retail price for feed. You’re not looking for other markets or trying to push someone else out of the market, you’re producing for yourself. This is why our financial advisor has emphasized the importance and strength of getting as much of the volume of the plant committed to by farmer own use.
• Taking on larger fertilizer companies: ProjectN is meant to facilitate farmers’ participation up the value chain. Governments as well as many others have long insisted that to stabilize income and improve profits farmers need to be involved in the value chain. This project is meant for farmers to share in the profits that exist in the fertilizer industry. This project is not meant to destroy the market price of nitrogen fertilizer. If that happened all the farmers with no skin in the game would benefit just as much as the farmer investors. As well it would most definitely attract unwanted attention from current very large industry players. This project is meant for farmers to reap the profits from fertilizer manufacturing and use those profits to offset the escalating costs of fertilizer.
• Farmer Ownership: Everyone working on this project is determined to achieve as much farmer ownership as possible. We will need some level of third party investment because we want an expert, professional operator for the plant, but aside from that we want farmers to own this. We also want to make sure that it stays in farmers hands and doesn’t fall prey to the same problems that lost farmers their ownership in other initiatives started by them.
• Seed Capital Drive: this initial step is meant to ensure that project development doesn’t falter because of lack of funding. Typically FNA budgets a certain amount of farmer membership money for new project development. But this project is so much bigger than anything we’ve ever done before and because all the work done to date is very positive, including farmers urging us on and telling us to hurry up, we need to maintain momentum and carry on to a successful completion. Money spent to date has been membership money and that is why being an FNA member is a requirement. Farmers currently not members can engage by first becoming a member.
• Watch for more positive news releases in the next few days that will highlight the team of experts we have working on this project.

[dave4441]

Sorry, but I was able to bring glyphosate into
Canada cheaper without FNA a few yrs ago. What
was there response? Lock supply up in USA and
drive up the price to just under the mkt value in
Canada effectively shutting down a federal
program that was owned by no one. FNA
margins were huge for basically brokering product
at "supposed cost". Fert plant will work as long as
price stays up, just like hog barns work when
grain is cheap. If price goes down everyone will
run to the lowest cost supplier. Not saying this is
not a good idea, but better be careful of the
vehicle.

[GlennCaleval]

@dave4441 I was deeply involved in the "glyphosate wars" and it's just completely wrong to say FNA "shut down a federal program." FNA, and I personally -- and at significant professional cost -- battled to keep the OUI program. The industry convinced a few key players that their replacement program would allow farmers to bring over whatever they wanted. I publicly told them this was not true, told a Parliamentary Committee they were being misled and FNA expended much effort and money to try to keep that program going. It didn't happen. So FNA moved on and found other ways to get competitive pricing into the farm chemical sector. Seriously, no one in the country has anything to teach me about the OUI program and how it was lost.

But I agree with you to a large extent about how this stuff works. Instead of a free competitive market, farmers largely have to live with a managed market for their inputs. That's why I am so optimistic about the FNA Fertilizer plan. It's not going to get into any brawls with the guys who own the market. It won't have to. Partners will get back their returns through earnings on the plant and through wholesale pricing arrangements that won't disturb the price management of the retail market at all. Those farmers who aren't partners will continue to supply the rather impressive profits to the established fertilizer companies and the Partners will see an effective decrease in price through non-retail price mechanisms. The FNA partners will be happy and the market managers will be happy. No muss, no fuss.

[dave4441]

So, do you think it is reasonable to sell a membership to a grower, to supply cost pricing on glyphosate, but then charge the grower over a dollar per litre over the cost pricing? I know the numbers becuase i went to the US and brought back glyphosate the year before and your prices where $1/L higher. OUI was lost after FNA monopolized the supply. THere was one year though, were OUI was still valid, but your company monoplized supply and magically the price was almost exactly same as generic from Canadian companies.

[dave4441]

And of course you battled to keep OUI open, cause you had locked up the US supply so you were the only company that could use OUI at that point. Sorry, but gotta call a spade a spade on this one as i was also involved in this process.

[GlennCaleval]

I wasn't going to respond as this thread has gone rather off-topic, but the saying is you can have your own opinion, but not your own facts. Or as my dad used to say, "horse puckey's still horse puckey, no matter how loudly you call it cake."

So your version of reality is that FNA, at the time quite small, little FNA, somehow managed to "Lock supply up in USA and drive prices up."

So FNA locked up all the glyphosate from Monsanto and Syngenta and all the many U.S. generic companies?

FNA exerted so much market power in the U.S. that the glyphosate supply was "locked up."

Or do you mean that FNA organized its Members so that a single, mid-range U.S. manufacturer agreed to let its specific brand be used by FNA's supplier for the costly scientific laboratory testing and regulatory review required by law under the OUI? So FNA Members' dues went to pay for the equivalency testing and PMRA work to get the product approved. Because FNA Members paid for that process, the supplier agreed to sell his product to FNA Members in Canada. Is that what you mean? That you were hard done by because a group of farmers worked together to get a competitively priced product into the country? Tell me who stopped you from doing your own lab work and regualtory approval procedures, getting your equivalency certifications and bringing in your own glyphosate; tell me who stopped you and I'll help you go after them. Shame on them for preventing you from making that kind of investment and achieving something good for yourself. Oh, you mean you don't want to have to invest anything to achieve the gains? I see. It's coat tail riding, all the way, is it? Well the fact that the efforts of FNA Members resulted in glyphosate of all brands dropping in price by more than 70% is a long coat tail ride that I think should be met with approval, and provide a motive to join.

Because you get it that FNA never sold a drop of glyphosate, right? FNA is not a retailer and does not sell product. It sources, negotiates and organizes.

And it's not "my company." Like I said, I have worked with them in the past and hope to do so in the future. They've created the only model that is proven to create permanent structural improvements in farm profitability. Those farmers who become partners in the fertilizer plant will have a big advantage over others. Are you then going to complain that you should get the benefits of their investment too?

[dave4441]

Once FNA achieved equivalency it was available to the public. That was the deal with the program. By locking down all supply in USA FNA closed the loophole on the program. FNA margins for at least one year were a dollar per L. The idea that FNA sold at cost to the FNA members is complete horseshit. You comment that FNA is not a retailer. This is my exact problem. They are a retailer that pretends to be a broker for a membership fee. It is simply not correct. Add in a feel good board of directors to make it look transparent and you still have a retailer, plain and simple.

Sorry, thought you still working with them. I will not invest in this fert plant cause i just dont trust the principles. Weather it is a lentil trading program or a port terminal or a fertilizer plant. Same deal over and over.