Send Message
View as an RSS Feed
  • Still Able To Purchase $1 For 40 Cents: CF Industries  [View article]
    Saw this awhile back...

    Canadian farmers store fertilizer to fight dealers' pricing power
    1:00 AM ET, 02/27/2015 - Reuters
    By Rod Nickel

    WINNIPEG, Manitoba, Feb 26 (Reuters) - Canadian farmers are plowing profits from bumper crops into fertilizer storage facilities to mitigate the pricing power held by major retailers and producers.

    Having their own storage lets farmers buy nutrients more cheaply during the off-season and creates fewer transport bottlenecks in the spring planting season.

    Over time, the practice might erode the steep premiums farmers pay in the spring to retail businesses owned by Agrium Inc, Richardson International and Cargill Ltd , while shifting distribution patterns of producers Potash Corp of Saskatchewan, Mosaic Co and CF Industries.

    The trend is part of a wider shift by North American farmers to gain more control over both costs and the prices they collect. In the U.S., farmers are building silos and bins to store grains and oilseeds until crop handlers entice them to sell.

    Canadian farmers produced record-large harvests of wheat and canola in 2013, boosting their net income to C$6.4 billion, the fourth straight year of gains, according to the most recent Statistics Canada data.

    After diammonium phosphate prices spiked in 2008 to $1,200 per tonne, compared with less than $500 a tonne today, Saskatchewan farmer Kevin Hruska spent about C$400,000 in 2010 to build storage for about 6,000 tonnes of blended fertilizer.

    "We want to store it all - we don't want to be held hostage by the logistics of springtime and the games the fertilizer companies play," said Hruska, who grows wheat and canola and uses about 6,500 tonnes of fertilizer a year on his sprawling 45,000 acre farm. "It gives you a lot of security knowing your fertilizer is in place out of season."

    The difference between harvest and spring fertilizer prices has been almost enough for farmers to pay the cost of storage within one season, said Lyndon Carlson, senior vice-president of marketing at Farm Credit Canada, the country's biggest agriculture lender.

    Fertilizer prices have been higher in April, the month when demand soars just before most planting gets underway, than in the previous October eight times in the last decade, according to a survey of Alberta prices by the provincial government. The price of urea, for example, was C$529 per tonne in October 2013 and C$721 six months later.

    Sales volumes of epoxy-lined bins - designed to withstand fertilizer's corrosiveness - have climbed 20 percent since 2010 at Westeel , Western Canada's second-largest seller of farm storage, said president Andre Granger.


    Farmers in North and South Dakota are also building storage for fertilizer, like their Canadian neighbors, but the trend has not caught on with much smaller U.S. Midwest grain farms. Farmers there lack the same scale to buy storage facilities or fertilizer spreading equipment and rely on local co-operatives to do the work, said Peter Trebuschnoj, Iowa-based director of U.S. operations at Meridian Manufacturing, which makes bins for the farm, industrial and energy sectors.

    U.S. hog farmers are avoiding high retail prices for spring fertilizer by cashing in on their own endless supply of free manure.

    Iowa grain farmer Chuck Souder said the ability to produce and store excess fertilizer was a deciding factor when his family built a hog barn last fall that can hold about 2,500 animals at a time. He estimates the hogs will produce at least $37,000 in fertilizer a year.

    North of the border, bumper crops and the strength of multi-generational farms allow some farmers to pay cash for storage, while others borrow, said Randy James, manager of agriculture in Manitoba for Bank of Montreal.

    The growing size of Canadian farms also makes building storage affordable. In Saskatchewan, the average farm is 1,668 acres, five times the average in Iowa.

    The benefits go beyond dollars and cents.

    The farm input distribution system often becomes congested during spring, with fertilizer in high demand during farmers' narrow planting window.

    For that reason, farmers' move to build fertilizer storage and buy off-season is positive for retail sellers, even though they might sell less product at premium spring prices, said Tom Hamilton, vice-president of Richardson Pioneer.

    To be sure, the more fertilizer farmers store, the more price risk they take. In 2009, retail dealers incurred heavy losses on inventories when prices collapsed.

    "Bottom line, the risk of inventory change will always overshadow the desire to store up," said Potash Corp Chief Executive Jochen Tilk. (Additional reporting by P.J. Huffstutter in Chicago. Editing by Amran Abocar and John Pickering)
    Apr 20, 2015. 02:15 PM | 5 Likes Like |Link to Comment
  • Still Able To Purchase $1 For 40 Cents: CF Industries  [View article]
    take a look at the five-year chart (beautiful, BTW) but this stock is the poster-child for buy-on-the-dip.
    Apr 20, 2015. 02:12 PM | 1 Like Like |Link to Comment
  • It's A Good Time To Accumulate GasLog  [View article]
    Like all shipping companies, GLOG has some "aggressive" financials. It's looking like they have turned the corner though. Even though last year's spike was totally nuts, I've held it since 2013 and even added this January.
    Apr 9, 2015. 01:18 PM | Likes Like |Link to Comment
  • Oil Prices Rose 6% Yesterday - What Does It Mean?  [View article]
    I'm thinking that I that there is no rush here also...although I don't really care about Cushing. I'm waiting for the next round of earnings.
    Apr 8, 2015. 09:28 AM | Likes Like |Link to Comment
  • Kraft Foods, H.J. Heinz Merger To Drive Significant Potential Synergy And Dividend Growth Opportunities  [View article]
    Energy, all the food companies will be in play for awhile now. Might be a good trade.
    Mar 25, 2015. 10:40 AM | Likes Like |Link to Comment
  • Disney's Dividend Growth Outlook Is Outstanding  [View article]
    Own the company in my IRA, hate the annual payment. This is unfortunately one of those stocks that is NEVER on sale...well, maybe once every 10 years or so. It is always painful to buy it.
    Mar 25, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Carrizo Oil And Gas Shows Why It Has The Best Assets  [View article]
    A great reminder that there are always companies that buck even the most fierce bear markets. Carrizo recovered for a good reason, nothing random here. I missed the trade, so I'm not in it. But I would consider it if I saw some smart acquisitions.
    Mar 25, 2015. 09:46 AM | 1 Like Like |Link to Comment
  • It's Time To Start Shorting The U.S. Dollar  [View article]
    The author is obviously excited by the little rally the Euro just had.

    I put this article right up there with the guy that was planning to hold leveraged ETFs indefinitely, because the market was doomed to fail, sooner or later. With the USD basically being about the only major currency NOT in a devaluation cycle...I just don't know where to start...yikes!

    ...not to mention that many of these other currencies are from resource-based economies (materials priced in US$) that are getting crushed right now.

    I call this "second-guessing the facts."
    Mar 24, 2015. 04:16 PM | 10 Likes Like |Link to Comment
  • It's Time To Start Shorting The U.S. Dollar  [View article]
    Let's see... nope.
    Mar 24, 2015. 03:29 PM | 3 Likes Like |Link to Comment
  • Chevron Stock At The Magic 4% Yield Mark  [View article]
    Long-term, I'm a believer in CVX, COP, etc... but majors have all hit the mid-single digit P/Es before. No reason to be in a hurry. The damage to earnings has not played out yet.
    Mar 20, 2015. 09:55 AM | 5 Likes Like |Link to Comment
  • The Worst Is Not Over For Mattel  [View article]
    Two words for you... STALKER BARBIE...lot's of bad media already.
    Mar 19, 2015. 10:36 AM | 2 Likes Like |Link to Comment
  • Twitter: Why It's Still A Short  [View article]
    Don't own it, but I get the feeling that TWTR is going to surprise the crowd. Interestingly, there's not as much short-interest as I would have expected.
    Mar 17, 2015. 02:27 PM | Likes Like |Link to Comment
  • BHP Billiton - Is It The Right Time For This Basic Materials Giant?  [View article]
    You Aussies love to hate your miners. No doubt BHP has made some really poor growth decisions over the past few years; and their labor practices are know in the media to be ... not the best. Unfortunately, that's how it usually goes for a big commodity company. If and when investments pay off, it takes a long time.

    As for the POT attempt, it did seem a rather odd pick. Canada was bound to block that. I would like to see them get into the fertilizer business though. Lots of other vectors there.

    Don't own it, BTW. Always close to pulling the trigger, but never have the conviction.
    Mar 16, 2015. 10:46 AM | Likes Like |Link to Comment
  • Philip Morris Yield Surges Past 5.00%  [View article]
    none that I see...see Bill's comment.
    Mar 11, 2015. 02:33 PM | Likes Like |Link to Comment
  • Philip Morris Yield Surges Past 5.00%  [View article]
    didn't say it was smart talk, ha. It was more based on the premise that the reasons for spinning the company out (legal protection) have been "mostly" put to bed back in the U.S., therefore...
    Mar 11, 2015. 02:30 PM | 1 Like Like |Link to Comment