Jonathan Knutson, Forum News Service, Published December 20 2013
Fertilizer executive shares his perspective on volatile industryGRAND FORKS – Don Pottinger has spent four decades in agribusiness, much of it working with fertilizer. He said the experience has convinced him of two things:
Predicting the direction of fertilizer prices is difficult, if not impossible.
Farmers in the Upper Midwest would benefit if at least one nitrogen fertilizer plant is built nearby.
Pottinger, CEO of Northern Plains Nitrogen, spoke Thursday at the annual Prairie Grains Conference in Grand Forks. About 500 people attended the two-day event. The conference was organized by a number of North Dakota and Minnesota farm and commodity groups.
Northern Plains Nitrogen has proposed building a $1.5 billion nitrogen fertilizer plant near Grand Forks. Boosters of the plant continue to seek financing.
Pottinger’s presentation at the Prairie Grains Conference primarily involved his thoughts and observations on the fertilizer industry in general.
“This fertilizer game is a tricky game,” he said.
About 60 percent of the nitrogen fertilizer used by U.S. farmers is imported. Most of the imported fertilizer is shipped first to New Orleans, then taken by barge, truck or both to customers across the U.S. Agriculturalists in the Upper Midwest are “the end of the line” in the supply chain, he said.
The region’s location becomes increasingly troublesome as more corn, a heavy user of nitrogen fertilizer, is grown in the Upper Midwest, he said.
Corn and wheat, another big user of nitrogen fertilizer, account for half of the planted acres in North Dakota and South Dakota and nearly half of the planted acres in Minnesota, he said.
The combination of location, need and growing availability in western North Dakota of natural gas, a key component of nitrogen fertilizer, makes a strong case for an a new plant in the area, he said.
CHS is investigating whether it should build a $1.4 billion nitrogen fertilizer plant near Spiritwood, N.D.
Pottinger said he’s often asked whether there’s enough demand to support two nitrogen fertilizer plants in the state.
His answer: Upper Midwest agriculturalists should hope that both plants are built.
Pottinger offered these “takeaways” to his audience:
• “Tip your hat to your ag retailer,” who does excellent work securing fertilizer for customers.
• Producers should make greater use of technology involving precision agriculture.
• “Don’t try to outthink (global fertilizer) supply and demand factors. Don’t try to outthink what’s going to happen in terms of pricing and supply.” Instead, “Run your farm.”
• “Aim high” by using fertilizer to increase yields. “That last bushel (of additional yield) is very important to people who can grow it cost-effectively.”