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Phosphate industry expects minor impact from Irma

Loading phosphate at distribution center
There was a small uptick in phosphate sales ahead of Hurricane Irma’s arrival in Florida, where the bulk of North American phosphate production is located. Phosphate facilities there shut down as part of their hurricane preparedness plans.

Early reports from manufacturers are that damage at the facilities appears to be limited, but full assessment will take time. Some finished product has sustained water damage but no exact estimates have been released yet.

A major manufacturer expects to be able to resume production fairly soon, but says its third quarter production volumes could be impacted by the storm disruptions. It had stopped making price offers to either domestic or international customers until late Thursday, Sept. 14. The market has reacted and prices moved up significantly late last week.

Several import vessels of phosphates are arriving in the Gulf this month, including one vessel with CHS cargo, which arrived and was unloaded in between hurricanes. Most of that product is now making its way up the river system.

Staff at CHS terminals are busy filling orders and working with accounts to get product in position before the busy harvest season gets underway across the Cornbelt. CHS is working hard to make sure producers are being kept informed of any supply changes or concerns that might arise from the recent storm damage to production facilities or transportation infrastructure.

Leadership changes at CHS

CHS Leadership - Darin Hunhoff, CHS EnergyCHS Leadership - Jay Debertin, president and CEOThe CHS Board of Directors has elected Jay D. Debertin as president and chief executive officer (CEO) of CHS. Debertin succeeds Carl Casale, who led CHS during record performance levels and expansion.

During Casale’s seven years with the company, CHS returned $3 billion to its owners, invested $9 billion in new capital expenditures and nearly doubled the size of its balance sheet from $8.7 billion in 2010 to $17.3 billion at the end of fiscal 2016. Casale focused on prudent fiscal management and enhancing management systems at the company.

“As we take our cooperative into its next chapter, we are confident that Jay is the right leader,” says Dan Schurr, chairman of the CHS Board of Directors. “Jay’s experience in achieving operational excellence and driving results fits squarely with our unwavering goal to deliver returns to our member-owners now and for the long term.”


Let’s Talk Fungicide

The ability to successfully apply fungicides will be critical if you are dealing with an outbreak of rust in your wheat crop this year.  Some producers are indecisive on what to do. The decision to apply a fungicide should be impelled by the cost of the treatment, susceptibility of the varieties, presence of the disease and the outlook for the weather.

Leaf Rust

Currently, we are seeing moderate to high levels of leaf rust, low levels of stripe rust and low levels of powdery mildew. The producer needs to be educated on the characteristics of their wheat variety. If you have a resistant variety to these diseases, fungicide application can wait, but scouting your field should be continued on a weekly basis.

According to Kansas State University Plant Pathologist, Erick De Worf, stripe rust is favored by cool, humid weather and disease development is most rapid between 50 and 60 degrees Fahrenheit. The disease is inhibited when night time temperatures get above 68 degrees Fahrenheit or there are several days in a row in the mid-80s. Leaf rust is the most damaging when the upper leaves of infected plants become severely rusted before flowering. Heavy rusting causes early loss of the leaves, which reduces the grain filling period and results in smaller kernel size (Stephen N. Wegula, University of Nebraska-Lincoln Extension Plant Pathologist). The optimum temperature for infection in leaf rust is 59-68 degrees, and 68-77 degrees for disease development.

Stripe Rust

Foliar fungicides will effectively control rust. Products containing a triazole fungicide are considered the best option when the disease is established in the field (Prosaro, TebuStar, Tilt). Products belonging to the strobilurin class of fungicides (Headline) are most effective when applied before infection. The triazole class of fungicide is generally considered to have stronger curative activity (Wolf).

We are currently running two products for fungicide application, TebuStar and Prosaro. If you are finding rust on a field of seed wheat or wheat that normally yields higher in bushels, it would be wise to go with Prosaro. Prosaro is a curative and preventative giving you approximately 30 days of residual. If you have an average yielding field and you’re focusing on the economics of your crop, TebuStar would be a great option for that. It is a curative giving you a 7-10 day residual. These products need to be applied when there is flecking on the flag leaf and pustules on the lower leaves. Please keep in mind fungicide does not produce yield increases, but helps maintain what the crop has already formed.

While application timing is key, water volume is the most important application parameter when it comes to achieving good coverage. When applying fungicide with a row crop, we run 20 gallons of water. We work closely with NOE Aviation in Watonga, Okla for all of our aerial applications and strongly recommend running 3 gallon of water. You cannot put a price on good coverage. According to spray technology specialist, Tom Wolf, “increasing water volumes has a greater effect on fungicide performance than droplet size or spray pressure.”

Moving forward, now is the time to be planning for cover crops. We have a full line of cover crop options to choose from. Integrating cover crops into your farming practices is an effective way to improve your soil fertility by adding nitrogen back into the soil, reduce soil erosion, reduce run off and countless other benefits. Soil health benefits are often improved when using cover crops in combination with no-till.  Please contact your local agronomist for seed or to help you get a plan for this summer.

CHS reports fiscal 2017 second-quarter and first-half results

CHS office in winter

Earnings increase in second quarter on improved conditions across CHS wholesale and retail agricultural related businesses

ST. PAUL, MINN. (April 5, 2017)CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $14.6 million for the second quarter of its 2017 fiscal year (the three-month period ended Feb. 28, 2017), compared to a net loss of $31 million for the second quarter of fiscal 2016. Operating earnings for the company’s second quarter were $10.5 million, up from a loss of $91.8 million from the second quarter of fiscal 2016. Revenues for the second quarter were $7.3 billion, up 11 percent compared with $6.6 billion for the second quarter of fiscal 2016.

Earnings for the six months of the company’s fiscal 2017 (the six-month period ended Feb. 28, 2017), were $223.7 million, compared to $235.5 million for the first six months of fiscal 2016, a decrease of 5 percent. The decrease is a result of increased loan loss reserves, higher income taxes and continued challenges in the energy operating environment, which were partially offset by improved conditions across CHS wholesale and retail agricultural related businesses.

Revenues for the first six months of fiscal 2017 were $15.4 billion, compared to $14.4 billion for the first six months of fiscal 2016, an increase of 7 percent.

“As our operating environment remains challenging, we continue to act prudently, taking appropriate and measured actions regarding costs and investments, while positioning ourselves to take advantage of opportunities as they arise while focusing on return on our invested capital,” said CHS President and Chief Executive Officer Carl Casale. “We are on a journey and are starting to see the benefits of our focus.”


© 2017 CHS Inc.