C magazine

Building velocity

Loader moving crop inputs in storage facility

Strategic crop nutrient investments help Sunrise Cooperative provide a range of options for growers as they respond to seasonal challenges.

Dec 04, 2019

Another turbulent growing season has crop producers looking for suppliers with deep bench strength and more answers.

Dakota Agronomy Partners, based in Minot, N.D., is the result of a complex series of mergers engineered over two decades. While the cooperative business has continued to expand its trade territory and assets, growth wasn’t the driving factor in the mergers.

“It’s not how big you are, but how good you are at servicing customers,” says Dan Sem, general manager. “Farmers have grown their operations faster than many cooperatives can keep up with. Their velocity, especially during the spring season, requires us to have more labor and more supplies within a small window of opportunity.”

The cooperative’s latest merger in September 2018 pulled all the agronomy assets of three founding cooperatives under the Dakota Agronomy Partners umbrella. Chief among them are mega fertilizer plants located in Minot, Bowbells and Bottineau, N.D. “Being able to manage that kind of fertilizer volume gives us much greater flexibility to transfer tons from one location to another if we need to,” says Sem.

The merger doubled the cooperative’s employee base and doubled the equipment it can dispatch across its trade territory that now stretches 160 miles south from the Canadian border and about 130 miles across the western side of the state.

“Since field activity across that area is rarely all taking place at the same time, we’re able to move applicators where they’re needed, when they’re needed,” says Sem. “That kind of flexibility allows us to provide better service and that helps us capture more business.”

Achieving that kind of capacity and flexibility to meet the needs of Dakota Agronomy Partners and other progressive agronomy suppliers were two key factors earlier this year when CHS expanded its agronomy offerings by completing the acquisition of West Central Distribution, LLC, a full-service wholesale distributor of agronomy products. CHS had purchased a 25 percent stake in the company in 2015.

“Adding crop protection assets, capabilities and expertise positions CHS as a leading supply partner to cooperatives and retailers serving growers throughout the United States and adds value for CHS owners,” says Gary Halvorson, who leads CHS Agronomy, the company’s comprehensive agronomy platform.

CHS Agronomy distribution map 

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Along with 20 crop protection warehouses and more than 200 employees, the acquisition brought with it a portfolio of adjuvants, seed treatments, plant enhancement products, micronutrients and enhance defficiency fertilizer products.

Those capabilities dovetail with CHS leadership in crop nutrients, with a supply chain that includes 14 river terminals on the Mississippi, Ohio and Illinois rivers, more than three dozen crop nutrient terminals and joint ventures in 14 states, and significant interest in U.S. and Canadian fertilizer production through CF Nitrogen.

The combined CHS Agronomy business is a good fit, says Michael Fiebelkorn, former West Central president and now leader of CHS Agronomy crop protection. “Combining our assets and capabilities certainly made sense financially, and combining our expertise in crop protection and crop nutrients will help us better understand and serve the needs of our customers.

Crop input bulk storage  
Combining crop protection assets with crop nutrients strength makes CHS a leading supply chain partner.

“We know customers can buy products elsewhere. The key difference is the service and expertise that comes with those products. That’s where CHS Agronomy really shines, with an experienced sales force and the agronomic expertise to back them up,” he adds.

For cooperatives, the acquisition also eliminates a step along the supply chain for crop protection products, notes Sem. “Creating a competitive buying advantage means we can add value to the co-op and the grower to improve both of their bottom lines.”

“Farmers and ag retailers face many complex issues and every year is different. From weed resistance to a reliable supply of crop inputs to managing environmental or regulatory issues, farmers and retailers need reliable information from trusted advisors,” says Josh Nuytten, who heads up the CHS Agronomy sales team.

“Complementing CHS supply chain strength and industry-leading crop nutrient expertise with crop protection capabilities and expertise allows CHS Agronomy to provide the inputs and services retail customers and growers count on, from one convenient source.”

Eye on the Prize

There were moments in early 2019 when one of those customers, Farmers Co-op Oil General Manager Brad Hebrink, second-guessed his cooperative’s decision to build a new fertilizer plant near Clara City, Minn. Aside from a week of planting in mid-May, extraordinarily wet conditions across west-central Minnesota prevented many farmers from getting back into fields until June. Most of them were forced to abandon preplant fertilizer applications so they could focus on getting seed into the ground.

Agronomy manager checking crop nutrients in storage facility
Mike Bosch, agronomy manager at Farmers Co-op Oil, Clara City, Minn., checks crop nutrients in storage at the cooperative’s new fertilizer plant.

“The new plant was part of the board’s 10-year plan, and we all knew we needed to replace our 20-year-old facility to meet the needs of our growers,” he says. “It was just unfortunate timing.”

Many of the cooperative’s customers, including board chairman Phil Pieper, didn’t get all their 2019 acres planted. “About 20 percent of our corn acres didn’t get seeded,” Pieper says, “and we didn’t use our usual starter fertilizer on many sugarbeet and corn acres. Instead we relied mostly on sidedress applications.”

Chippewa County, where the cooperative is centered, tallied some 41,000 prevented planting acres — most of them corn acres, notes Hebrink. “It really impacted our fertilizer volumes, especially after several really wet falls with limited postharvest application.”

Spreader in field
Crop nutrients are applied near Minot, N.D.

While co-op management felt the stress, grower enthusiasm for the new 13,000-ton plant never waned. “It’s more than twice the size of our old plant, with more bins and micronutrient bins for specialty mixes,” he says. “And we can load trucks in one-third the time loading used to take.

“Some farmers in this area have their own fertilizer spreaders and with the old plant, in a normal spring, we had trouble keeping up with demand,” he recalls. “And with limited storage we used to have to buy at least 30 percent of our fertilizer in season. That shouldn’t be a problem anymore.” The increased storage should offer better price opportunities and reduce concerns about having enough nutrients on hand, Hebrink adds.

Minimizing Risk

According to USDA prevented planting data, Ohio farmers set records for not planting last spring. Nearly 1.5 million acres were left fallow, including 881,000 corn acres and 599,000 soybean acres. A large percentage of those acres were in the state’s northwest corner, which includes a sizable part of the trade territory of Sunrise Cooperative, a major customer of CHS Agronomy.

CHS agronomist with producer in wheat field
Agronomist Mackenzie Derry, right, CHS Ag Services, based in Warren, N.D., checks late-season wheat acres near Grand Forks, N.D., with farm employee John Mager.

With so many fertilizer tons unneeded, CEO George Secor and the Sunrise agronomy staff looked for ways to move product where they could and minimize outside storage fees. “Anhydrous ammonia was our only challenge, since we couldn’t store it all on site. One of our sales staff suggested calling customers who had used it years ago but weren’t planning to this year,” he says. “Several farmers agreed to use ammonia instead of another nitrogen source if they didn’t have to do the application, and that helped us pull all the ammonia from other storage locations onto Sunrise property.”

River Roulette

It takes creative maneuvering to move fertilizer when the U.S. river system is out of commission. Roger Baker, head of supply, trading and risk management, CHS Agronomy, lists some ways the CHS Crop Nutrients team overcame the 2019 transportation logjam at the Gulf:

  • The deep-water CHS port terminal at Galveston was used to move imported fertilizer out of vessels and into railcars for shipping to central and northern Plains states.
  • Leveraging the strength of its investment in nitrogen production, CHS secured more tons from the CF facility at Port Neal, Iowa, and staged tonnage in Minnesota, Iowa, Nebraska, North Dakota and South Dakota.
  • Barge tons were diverted up the Ohio River to CHS terminals at Owensboro and Melbourne, Ky., then trucked into the Upper Midwest.
  • Northbound barges were diverted up the Illinois River to a Peru, Ill., terminal CHS operates in a joint venture with Northern Partners Cooperative. Then fertilizer was trucked into Wisconsin, Minnesota and Iowa.
  • Barges were off-loaded near St. Louis, Mo., into railcars for shipment to the Dakotas.
  • CHS crews from Muscatine and Davenport, Iowa, pitched in at the Peru terminal, and others from St. Paul, Savage and Winona, Minn., helped out in Memphis, Tenn., to keep nutrients moving.

Sunrise Agronomy Solutions Advisors (ASA) including Zach Smith spent hours watching weather patterns and checking fields. “We were constantly on the road, checking conditions. I put more than twice the miles on my truck that I usually do in spring trying to help farmers find fields that were dry enough to plant.”

Farmers who could plant were able to get a lot done in just a few days, adds fellow ASA Brian Rhodes. “More than anything else, the 2019 season reinforced the importance of farmers having good relationships with their agronomists and suppliers.”

River Challenges

It was a record-setting season on other fronts too — few of them good. One of the most significant for agriculture was a new record for the longest-lasting flood conditions along the length of the Mississippi River.

High water levels prevented locks and dams on the Upper Mississippi from being opened all the way up to St. Paul until mid-June, nearly three months later than average. Along the Lower Mississippi, key river towns, including Greenville and Vicksburg, Miss., experienced water levels above flood stage from March until mid-July.

There was no moving the usual barge tows of fertilizer from the Gulf to terminals above St. Louis until well into June, recalls Roger Baker, who heads up crop nutrient supply, trading and risk management for CHS Agronomy.

Weeks before, when early signs began pointing to the possibility of spring transportation delays, CHS logistics specialists and terminal and product managers started thinking outside the box to come up with alternatives, he says. “With weekly flow-plan meetings, they did a great job leveraging our other terminal assets and relationships with fertilizer producers, railroads and trucking firms to find new ways to get tons to customers in affected areas, especially those in the Upper Midwest.”

3 Can't-Miss Agronomic Efficiency Strategies

1 Get More From Fertilizer

“Fertilizer is the next frontier of innovation in agronomy,” says Josh Nuytten, CHS Agronomy sales lead. “Enhanced-efficiency fertilizer products are good examples.

“Products such as Trivar™ broadcast phosphate fertilizer additive and N-Edge® nitrogen stabilizers help protect a grower’s crop nutrient investment, improve overall plant nutrition and preserve water quality.”

U.S. farmers applied an estimated 4.695 million tons of phosphate fertilizer in 2016, according to USDA estimates. That volume has been typical in recent years, due in part to inefficiencies of many phosphate fertilizers, says Steve Carlsen, crop enhancement manager, CHS Agronomy. Once applied, up to 80 percent of phosphorus can get tied up in soil, making it unavailable to crops.

Producer and agronomist in corn field
Brian Rhodes, left, agronomy solutions advisor with Sunrise Cooperative, checks corn progress with grower Mike Kocher, Galion, Ohio.

One way to make phosphorus more available is through chelation, which prevents negatively charged phosphorus from binding with positively charged soil micronutrients. Trivar contains Levesol®, the strongest available chelate, plus an enzyme that converts organic phosphorus into its inorganic, plant-available form, and key micronutrients zinc and boron.

“The result is up to 80 percent increase in plant phosphorus uptake,” says Carlsen. “Trivar helps maximize availability of phosphate and micronutrients to protect a grower’s nutrient investments.”

Trivar can be impregnated on dry phosphorus fertilizer for fall or spring broadcast applications.

2 Make Smart Adjuvant Choices

Using the right adjuvants with herbicide applications is another important crop management decision, especially with the transition to newer trait-specific growing systems, says Dean Hendrickson, head of crop protection product and business development, CHS Agronomy.

“The industry has gone from glyphosate-only systems just four or five years ago to now having several new dicamba and 2,4-D seed-trait-and-herbicide combinations. Each of those herbicides requires different adjuvants. CHS Agronomy now offers a full range of adjuvants, from drift inhibitors and buffers to compatibility, deposition and activator agents.”

The new soy-enhanced adjuvant CHS Acuvant™ provides a unique grower connection. Available through CHS retail locations, CHS Acuvant contains oil refined by CHS from soybeans grown by CHS owners. Refined oil has fewer impurities than regular soybean oil for superior mixability and coldweather stability.

“CHS Acuvant produces a spray solution with denser droplets to optimize drift control and deposition for maximum herbicide, fungicide and insecticide effectiveness,” says Hendrickson.

3 Leverage Crop Nutrient Value

With tight crop margins, the cost of every input matters. One factor to consider is the fact that the prices of most fertilizers are at the lowest levels in recent years, says Todd Dysle, product manager for UAN and ammonia.

To get a broader perspective on those markets, consider the fertilizer and corn index, which compares price changes over time, he says. “Over the past year, the index illustrates that compared to the price of corn, all major types of fertilizer are undervalued, making fertilizer a good buy.”

Fertilizer and corn index graph

Another valid relationship is fertilizer cost compared to corn and soybean values, says Dysle. “Look at how many bushels are required to pay for a ton of fertilizer. At today’s fertilizer prices and new-crop corn and soybean prices, fewer bushels are needed to pay for all types of fertilizer than the 10-year average. So fertilizer continues to be a good value, even at today’s crop prices.”

New crop prices graph

 Check out the full C magazine with this article and more.