OK lets all put money in for the FNA seed capital

[Hopperbin]

Kathy Mathers, vice president of public affairs for The Fertilizer Institute, said the cost of natural gas represents 70 percent to 90 percent of the cost of producing nitrogen. Natural gas is the heat source in the chemical process that produces nitrogen.

http://qctimes.com/news/local/article_ac1798b4-d153-11e1-8b79-001a4bcf887a.html

[Hopperbin]

Activist shareholder Jana Partners LLC thinks Agrium is underperforming in its retail arm.

http://in.reuters.com/article/2012/08/15/us-agrium-jana-meeting-idINBRE87E18Q20120815

Perhaps the bigger they are the harder they fall cause no way in hell the retail arm will do better. Yet the Makars would like to believe it. Not sure why.

[sumdumguy]

I have no idea if this will actually materialize and
all will be better off, but I do remember Round-
Up and how expensive it was. Maybe history will
repeat.

[bucket]

But FNA never built a glyphosate plant. They made deals with the manufacturers.

I think they could do the same thing now with an overseas supplier of fertilizer.

[Hopperbin]

Jana wants to sqeeze more money out of
agriums retail

[Hopperbin]

Jana wants to sqeeze more money out of
agriums retail

[dmlfarmer]

Bucket, if it is cheaper to bring in off shore fertilizer, don't you think someone would already be doing it and competing with the Agrium and Cargill and CHS's of N.A. That is the nature of the open market and free enterprise.

The fact is Agrium knows exactly what is would cost to bring in off shore fertilizer and they price their N.A. supply at that price which stifles any competition from importing. Meanwhile, their profit margin is boosted by the fact natural gas in N.A. is cheaper than elsewhere, that China imposes export tarriffs on fertilizer, that N.A. imposes import tarriffs on Russian fertilizer, and that the shipping costs and risk costs for importing fertilizer are much greater than other commodities because of physical composition of fertilizer. It cannot get wet and tends to dust off when handled. And it does not hurt that nearly all the N.A.port facitlites that could handle unloading fertillizer are owned or operated by the current fertilizer manufacturers or their partners.

Agrium also know building a new, efficient production facility will cost about a billion dollars and take 3 years to construct. They know farmers alone can not come up with that type of money with no payback for 3 years and that investors are not going to support a plant working on selling the product at cost.

A single new plant in Canada will have little or no effect on fertilizer price now or in the future. However, investors in a new plant may do well provided the world fertilizer price stays high,our natural gas prices stay low, and demand for N continues to grow.

[dmlfarmer]

correction to my last post "CF Industries" (not CHS)

[HappyFarmer]

Well said dmlfarmer
My thoughts exactly!!!!!!

[bucket]

That's right and maybe someone could explain how federated co-op now has the 4th largest refinery in Canada.

Oh, oh maybe someone doesn't want to talk to a major player in the oil and gas business for a new enterprise with massive memebership and resources to build a competetive plant.

Just an example of how partnering might work in the case.

Yara, agrium and cargill/mosaic are big but I'm not sure too many companies refuse opportunities to build to their base.

The distribution system for the co-ops would be an easy fit and a plant south of belle plaine would be perfect. Hits the major markets with an reasonable infrastructure.

[cottonpicken]

Global natural gas price is a funny thing,its not the
same all over.

I'm guessing but i don't think you would need to buy
a very big producer and i know one these companies
could easily be taken over,they are at rock bottom
and struggling.

[dave4441]

THere are gas wells in Shackelton field that have effectvely been abandonded. There is a receiver or two that have gas wells they can't sell. Heard Action Energy was offered to Ererplus for $1 and they didnt take it.

THe Co-op idea is a good one i think. As an investment i dont think so. Was only a couple years ago that N was 36 cents/lb. Bought 2 years supply. It will cycle back. And it is more likely to cycle back long before the 1 billion in construction is spent. What then?