The U.S. fertilizer sector is doing well, buoyed by solid demand and strong commodity prices, but the industry is increasingly concerned about disruptions like low water levels in the Mississippi River and a potential rail strike, says Corey Rosenbusch, president and CEO of The Fertilizer Institute.
“From a general sense, everyone is strong right now,” Rosenbusch told Agri-Pulse Wednesday on the sidelines of TFI’s annual conference, held in Houston this year. “The ag economy is strong. The fertilizer industry is strong. It’s just the volatile events that you wake up to each week that are scary,”
First and foremost is the low water level of the Mississippi River. The river gauge at Memphis, Tennessee, reached minus 8.49 feet Wednesday, according to the National Weather Service. That’s up from the low point this year of -10.81 feet last month, but still a concern.
“We heard anecdotally last week there was a vessel inbound to New Orleans that got cancelled because there were no barges available to offload that cargo and get it up the river,” Rosenbusch said. “Cargoes are going up about a quarter loaded on barges. A lot of the docks where fertilizer is transloaded into terminals are off the main river and access to those docks is a challenge.”
But that’s not the only immediate concern for fertilizer companies and farmers that need the inputs. The threat of a rail strike is looming large.
That threat was pushed back Wednesday, but the fertilizer industry is still bracing for the potential impact of not being able to move product.
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The National Carriers’ Conference Committee and the Brotherhood of Maintenance of Way Employees announced that the deadline to avoid a strike is being pushed back from Nov. 19 to Dec. 4.
“Three unions have open ratification votes, and the cooling-off period extension announced today will allow the members of these unions to complete their voting without disruption from the threat of a strike,” they said in a statement.
But Rosenbusch stressed that fertilizer shippers using trains will be impacted even before the deadline if the unions haven’t reached a decision before the deadline. When the deadline was still planned for Nov. 19, Rosenbusch said ammonia shipments would be impacted five days ahead of time if there was no resolution.
That’s because ammonia cannot be stuck in train cars during a strike.
“What they have to do is secure all of the ammonia and other chemical shipments,” he said.
If that happens, the delays start adding up.
“For every day that we’re not able to ship product, it takes five to seven days to catch up,” he said and stressed that it would not take long until storage could become a problem. “There’s not a lot of long-term storage. If this drags on and you have to start curtailing production, it can get serious fast.”
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