US CF Industries sees market tight on supply and has turned to allocations at Iowa facility

Mark Milam


HOUSTON (ICIS)–As US farmers charge after their spring sowings and flooding on the river increases, US fertilizer producer CF Industries is seeing the domestic market supply turn tight.

Speaking during its quarterly earnings conference call, CF confirmed it had turned to an allocation basis at its Port Neal, Iowa, facility to treat all customers fairly and that a shortage in urea could see product switching taking place.

“When you need that product promptly for walk-up demand, which is where we are today, you need it today, tomorrow, the next day and it is short and it is very tight. Then it is exacerbated by these river issues on the Mississippi with the closures and the difficulty to move product that may be in the Gulf up to the Midwest where it is need,” said Bert Frost, CF Industries senior vice president.

“We do not believe there is going to be enough urea. We believe that they will have to be migrating for second and third applications to ammonia and UAN, and we are preparing for that with positioning product throughout the system.”

Frost said beyond navigation issue for shipments coming north from New Orleans (Nola) that the market is facing increased overall cost.

“Pricing has extended from the normal spread of Nola. Let’s say $30 to the Midwest, it’s between $50 and $100 today and will probably go up towards the higher end as we get to peak applications,” Frost said.

CF said because of its positioning it is able under normal circumstances to move barges as far north as Minneapolis and that it has other logistic options besides barges with Frost noting their access to railroad transportation.

“This is a great year for an earlier question of what did we do when our customers weren’t  purchasing. Well, we focused on how we are going to deliver the spring needs in a way that makes sense,” Frost said.

“So we set out a strategy and a game plan late Q4, early Q1 to make that happen and that is leveraging all assets that are at our disposal and we have done that. So we feel very positive about what we have positioned in the interior through our terminals and ammonia tanks, our UAN terminals and urea storage places for dry.”


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