16 February 2012 16:52 [Source: ICIS news]
HOUSTON (ICIS)--US fertilizer maker CF Industries said on Thursday a 2m-3m acre increase in US corn plantings this year will result in robust wholesale demand for nitrogen and phosphate fertilizers this spring.
"At current and forecasted crop prices, the economics available to North American farmers are extremely attractive and favour the planting of corn over soybeans," said CF CEO Stephen Wilson in a conference call with investors.
Illinois-based CF projects that US farmers will plant about 93.5m acres of corn in 2012, equal to the record established in 2007.
"An excellent fall ammonia application season was followed by unusually high January shipments because of mild weather, leaving ammonia inventories depleted," Wilson said.
An availability of ammonia storage capacity gives CF considerable flexibility in production planning and nitrogen product mix in 2012, Wilson said.
An additional 2m-3m acres of corn planted in the US in 2012 will result in a boost in demand for nitrogen fertilizers.
"Many of those additional acres will come from marginal ground that will need added nutrients to boost productivity," Wilson said.
CF on Wednesday reported fourth-quarter 2011 net earnings of $438.9m (€338.0m), a 119% increase from the net earnings of $200.3m in the same quarter of 2010.
The net earnings, a CF record for the quarter, came on fourth-quarter net sales of $1.7bn, a 39% increase from the same period in 2010.
Total fertilizer sales volumes in the fourth quarter of 3.8m short tons, down 44,000 short tons from the same quarter in 2010.
CF's earnings for the full year were $1.5bn on record net sales of $6.1bn, compared with $4.0bn in 2010.
Low natural gas costs will benefit CF margins this year, Wilson said. CF expects urea production costs to be less than $150/short ton this year. Granular urea is selling above $420/short ton FOB US Gulf.
Wilson said demand for phosphate fertilizers in 2012 in the US and globally will be positive.
"The global supply-demand balance for diammonium phosphate [DAP] and monoammonium phosphate [MAP] is improving, largely because of production curtailments by several of the world's largest producers," Wilson said.
CF also curtailed phosphate production partially in the first quarter of 2012 by advancing the timing of scheduled plant turnarounds, Wilson said.
($1 = €0.77)
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