North Dakota facility | Location of the nitrogen plant will be decided before Christmas, says the corn growers president
The proponents of a farmer-owned nitrogen fertilizer plant in North Dakota will make an offering to potential investors soon, says the president of the North Dakota Corn Growers Association.
“It really is our goal to have it (the offering) out in the near future,” said Darin Anderson, who farms near Valley City, N.D. “We’d like to have it out before the first of December.”
The corn growers, other commodity groups in North Dakota and Minnesota and the Manitoba Canola Growers Association (MCGA) plan to build a $1.5 billion plant that would use flare natural gas from the Bakken oil deposit to manufacture nitrogen fertilizer.
Anderson, who was reluctant to put a precise timeline on the offering to farmers, said it will definitely occur before Christmas.
The corn growers announced plans to build a plant in early July. Two months later, CHS Inc., the largest farmer-owned co-operative in the United States, said it would construct a $1.4 billion nitrogen fertilizer plant in Spiritwood, N.D.
Anderson said producers behind the farmer-owned plant understand the implications of the CHS proposal, but it’s not going to derail their plans.
“Even though we have to take it into consideration, we’re still going forward with our project,” he said.
“We’re looking at the lack of (fertilizer) production in our area and this region has room for more than one plant.”
The steering committee guiding the project is still considering three possible sites in North Dakota for the proposed plant, Anderson said.
The MCGA assumed a role in the project this summer. It paid $25,000 for a seat on the board because the plant, if successful, offers a way for Manitoba producers to control their fertilizer costs.
MCGA vice-president Brian Chorney, who represents the association on the project’s board, said Canadian farmers would have a chance to invest in the plant.
“We’re definitely going to open it up to Canadian farmers,” said Chorney, who farms near Selkirk, Man.
“(But) that will be up to individual producers to make that decision, if they want to hedge their fertilizer costs with an investing in a fertilizer plant.”
Chorney said he remains confident in the farmer-owned plant in North Dakota.
“We’re not overly concerned about the CHS development,” he said. “Everybody’s projects are evolving and we continue to assess ours versus others, to ensure it makes sense to go forward.”
North Dakota Corn Growers hasn’t publicized the project since the initial announcement in July, but Anderson said producers he speaks with are “definitely interested.”
“They know that they’ve been paying way, way more for their nitrogen fertilizer than what they should be,” he said. “It (the high price) is capitalism … but that doesn’t mean we have to sit back and take it for the rest of our farming careers.”
In addition to the proposed plants in North Dakota, Farmers of North America held public meetings this fall in Alberta, Saskatchewan and Manitoba, asking producers to support a farmer-owned $1 billion nitrogen plant in Western Canada.
The FNA Fertilizer Limited Partnership had raised $3.6 million in seed capital to fund environmental studies and other activities required to move the project to the equity investment stage.
As well, CF Industries, one of the major players in the global fertilizer trade, announced in November it would spend $3.8 billion to expand capacity at its plants in Iowa and Louisiana.
The expansion would add 2.1 million tons of ammonia, two to 2.6 million tons of granular urea and 1.8 million tons of UAN solutions (urea and ammonium nitrate) to its capacity.