Saskatoon-based Nutrien said Monday its board has named its current chairman, Mayo Schmidt, as the company’s new CEO. Replacing Schmidt as Nutrien’s chair is Russ Girling, former CEO of TC Energy.

As CEO, Schmidt replaces Chuck Magro, who said Monday he’s stepping down from that post and his spot on the board of directors to pursue unspecified “new opportunities.” Nutrien said Magro will be “available” to the company until May 16 to help in the transition.

Girling described Schmidt as “a remarkable leader who is committed to our values of safety and integrity, our purpose and our strategy focussed on sustainably feeding the world.”

Kansas-born Schmidt played briefly for the NFL’s Miami Dolphins in 1980 and later rose through senior management at General Mills. He came to Winnipeg in 1995 as president of ConAgra’s Canadian grain unit.

In 2000 he left an executive post at ConAgra in California for the CEO post at what was then Saskatchewan Wheat Pool. Schmidt oversaw the Regina grain firm’s restructuring from near-bankruptcy, shutting most of its smaller elevators and shedding non-core businesses.

In 2007 he spearheaded SaskPool’s merger with Agricore United and remained CEO of the merged firm, Viterra, until 2012. He oversaw its sale to Swiss commodities trader Glencore — which in 2016 spun off its ag unit, now rebranded under the Viterra name.

A 2014 appointment to the CEO post for Louis Dreyfus’ commodities business didn’t pan out, and Schmidt in 2015 became CEO at Ontario power utility Hydro One. There he handled that company’s IPO before his 2018 “retirement” following the election of Doug Ford’s provincial Tory government.

Schmidt also joined the board at Agrium, chairing the Calgary fertilizer and ag input company’s merger committee for its combination with PotashCorp into Nutrien in 2018.

“The outlook for our business is exceptionally strong,” Schmidt said of Nutrien in that company’s release Monday. “I look forward to leading the continued execution of Nutrien’s strategy and driving industry-leading performance across all our lines of business.”

Schmidt said in the coming weeks he’d be “connecting with our employees, valued customers and shareholders to continue building our positive momentum and our focus on advancing sustainable solutions to feed a growing planet.”

Magro, who came to Agrium from Nova Chemicals in 2009, said Monday he’s “very proud of the strong foundation we have built at Nutrien over the last several years” and “look(s) forward to working with Mayo over the coming weeks to support a seamless transition and to my next adventure.”

With Magro’s departure, Nutrien said its board would now cut its seat count from 12 to 11, and the remaining 11 directors would all stand again for election at the company’s annual shareholders’ meeting next month. — Glacier FarmMedia Network

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The partner companies had made various promises at the time and many in Western Canada were cautious, hoping for the best but not fully knowing what to expect.

A year later, Nutrien has begun to settle into its new role in the agriculture world — and according to retailers and producers it hasn’t really shaken things up all that much.

However, a few aspects of the merger still have many in Western Canada cautiously watching.

“I don’t want to pretend to call it a non-event because there’s always a concern about consolidation and all I can say at the moment is it doesn’t have any obvious impact,” said Ray Redfern of Redfern Farm Services in southwestern Manitoba.

Before the merger, Redfern, an independent crop input retailer, sold both Agrium and PotashCorp products. Most Agrium products were bought directly from the company, while PotashCorp products were bought through a middleman, Agrico.

Since the merger, those purchases have continued as before. Redfern estimated, though, that an increasing portion of purchases are now being bought directly through Nutrien.

On the producer side, the merger remains a wait-and-see game as many of the new company’s changes are still ongoing, according to Todd Lewis, president of the Agriculture Producers Association of Saskatchewan (APAS).

“There were some concerns, I know, in some areas with the amalgamations that there was going to be lost capacity, as far as delivery opportunities and picking up fertilizer,” he said.

In July, Nutrien rebranded Agrium’s Crop Production Services retailers as Nutrien Ag Solutions and invested money in upgrades to the retailers.

Lewis expected producers will find out this spring when they go to pick up fertilizer if the changes helped to improve wait times for pickups.

Out of office

There is concern from producers, though, if Nutrien will follow through with all of the promises it made before the merger, according to Lewis.

“A lot (of the news) about (Nutrien) in the media is about the head office here in Saskatchewan. I think Saskatchewan producers see that and kind of wonder about some of the promises that were made, if that wasn’t being kept, are some of the other ones at risk as well.”

Before the merger Nutrien had promised Saskatchewan it would keep Saskatoon, the home city for PotashCorp’s headquarters, as its head office location. PotashCorp was originally a provincial Crown corporation and when it was privatized in 1989, legislation required PotashCorp and any successors to maintain a head office in Saskatchewan.

Since the merger, though, almost all of Nutrien’s executives have been based out of the company’s Calgary office.

One unexpected change made by Nutrien was the company’s decision in February to shut down phosphate production at its facility near Redwater, Alta., northeast of Edmonton.

The Redwater plant, owned by Agrium before the merger, was the only phosphate manufacturer in Canada, while PotashCorp had phosphate facilities in the United States. For cost savings, Nutrien decided to move all of its phosphate production to the U.S.

Independent retailers have been warned by Nutrien they will have to ship phosphate in themselves, Redfern said.

However, for retailers in Manitoba such as Redfern Farm Services, Nutrien has said it will still distribute phosphate product from its facility near Portage la Prairie.

The shift to U.S.-made phosphate products has provided an incentive for more competition in the market. Before the merger, Agrium had the advantage of being the only retailer of Canadian phosphate products.

However, now that all phosphate products will be coming from outside of Canada, other retailers have started to expand their physical presence in Canada.

“(We’re hoping) that added competition here will bring fertilizer prices down, (or) at least keep (them) throttled a little bit anyway because we need good competition to make sure we’re paying a fair price,” Lewis said, adding Nutrien has assured farmers they won’t end up paying more for phosphate because of the closure.

— Ashley Robinson writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow her at @AshleyMR1993 on Twitter.

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Crop input retail stores and facilities run by Crop Production Services (CPS) — the brand today used across North America by the retail arm of the company formerly known as Agrium — will rebrand as Nutrien Ag Solutions, starting July 1.

Nutrien, now based in Saskatoon, officially formed in January from the merger of Calgary-based Agrium with its fertilizer industry rival PotashCorp. The CPS arm, headquartered in Loveland, Colorado, maintains a Canadian head office in Regina.

The name change will cover all of Nutrien’s 220-odd CPS retail sites in Western Canada — plus all other Nutrien facilities in North and South America that carry the CPS, Utilfertil and Agroservicios Pampeanos brand names, the company said Thursday in a release.

Landmark, Nutrien’s farm service and retail subsidiary in Australia, was not mentioned in Thursday’s release.

Farmers in parts of the U.S. have known the Crop Production Services brand in ag retail since 1983. Agrium bought the CPS input retail chain in 1994.

CPS has served as the brand for Agrium retail facilities in the U.S., Canada and Chile, including sites acquired when Agrium bought UAP in 2008, Viterra’s Prairie ag retail business in 2013 and Cargill’s U.S. ag retail sites in 2016, among others.

“Our goal is to create a consistent global agriculture brand that represents value and productivity for our customers,” Nutrien CEO Chuck Magro said in Thursday’s release.

“We’re extremely proud of the retail organization we’ve built,” said Mike Frank, president of Nutrien Retail, in the same release. The rebranded operation “will continue to partner with key suppliers and to invest in best-in class technology, platforms and tools.”

The new retail division, he said, will have more details to share “in the coming months” regarding an “enhanced digital platform and other investments.” — AGCanada.com Network

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Nutrien, the world’s biggest fertilizer company by capacity, also said higher input costs would shrink nitrogen and phosphate margins.

The company, reporting its first results since the merger, said it expects full-year earnings before interest, taxes, depreciation and amortization of $3.2 billion to $3.7 billion, and earnings per share of between $2.10 and $2.60 (all figures US$).

CEO Chuck Magro said that following the merger, the company achieved $40 million in run-rate synergies and was “focused on capturing half a billion dollars” in annual merger synergies by the end of 2019.

The acquisition of Brazil’s Agrichem in January would help Nutrien gain foothold in the country, which is seen as a driver of crop prices in the coming months.

Nutrien said fourth-quarter net earnings for Agrium fell to $18 million, or 13 cents per share, from $67 million, or 49 cents per share, a year earlier.

PotashCorp reported a net loss from continuing operations of $120 million, or 14 cents per share, from a profit of $13 million, or two cents per share, a year earlier.

Agrium’s total sales rose 9.5 per cent to $2.45 billion, while PotashCorp’s sales were up two per cent at $1.08 billion.

— Reporting for Reuters by Karan Nagarkatti in Bangalore.

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“(The merger is) a hard one to find a whole bunch of negatives or positives about it. A year from now it might be a different story,” said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan (APAS).

Initially announced in 2016, the merger between the two Canadian-based international companies received final regulatory approval from the United States Federal Trade Commission the last week of December. The new company, Nutrien, was officially formed as of Jan. 1. In order for the merger to go through the companies had to receive clearance from Canada, India and China, as well as the U.S.

There were concerns for producers before the merger, according to Lewis but now with the new company being final thoughts are mixed. APAS was concerned there would be a lessening of competition as there have been numerous mergers in the agriculture industry lately, however they are pleased to see it being two Canadian companies merging.

Dan Mazier, president of the Keystone Agricultural Producers (KAP) echoes Lewis’ sentiment, stating if at the end of the day it makes the companies stronger it is good for Canada as a whole.

“I understand that they don’t plan on shutting down any mines or shutting down any nitrogen manufacturers, it’s actually letting Sask (Saskatchewan) potash into the network of Agrium and vice versa. So probably at the end of the day it’ll be a much more robust company,” he said.

Before the merger the companies had said they expected to see an annual operation synergy of up to US$500 million from the deal. Nutrien is now Canada’s third-largest natural resource company at a value of approximately US$36 billion.

Mazier is concerned the new company could have an effect on independent retailers who sell Nutrien’s products. Nutrien has its own retail division, Crop Production Services, which was previously part of Agrium.

“It’s more where people get their supplies from and if this is actually cutting out retailers or cutting out where people (get the) products (from) … I’m still thinking the Canadian way though … if I’m going to support anything we definitely support the Canadian companies,” he said.

According to Craig Klemmer, the principal agricultural economist with Farm Credit Canada, the merger had to undergo rigorous scrutinization before being approved.

“When we think about specifically the nutrient market and these mergers and acquisitions that we’ve seen and the recent merger there’s a number of safe guards that have been put in place that help to protect consumer prices,” he said.

Things could change but as of right now, both APAS and KAP aren’t concerned there will be an immediate effect.

“(It’s) yet to be seen as far as the pricing. But it’ll be the supply and making sure that they stay viable at the end of the day,” Mazier said.

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Saskatoon-based Potash Corporation of Saskatchewan and Calgary-based Agrium Inc. announced Wednesday they’ve received clearance from the U.S. Federal Trade Commission (FTC) to close their US$25 billion merger-of-equals transaction and form up under a new name, Nutrien.

With the deal’s closing date set for Jan. 1, common shares of Nutrien are expected to start trading Jan. 2 in both Toronto and New York under the ticker symbol “NTR” and PotashCorp and Agrium common shares will be delisted at market close that day, the companies said.

Agrium CEO Chuck Magro, who next month becomes Nutrien’s CEO, said Wednesday the two firms “expect to move quickly upon closing to begin delivering on the many strategic benefits and synergy potential of this combination.”

The companies have previously said they expect to see annual operation synergies of up to US$500 million from the deal, which will create Canada’s third-largest natural resource company with an enterprise value of about US$36 billion.

Nutrien expects to have a combined workforce of almost 20,000 employees in potash, nitrogen and phosphate production and in Agrium’s crop input retail division, Crop Production Services (CPS). The company said it will have corporate offices in both Calgary and Saskatoon, with Saskatoon serving as the registered head office.

Antitrust regulators in Canada, India and China had already signed off on the deal in September, October and November respectively. Canada’s Competition Bureau granted unconditional approval, while the clearances from China and India call for PotashCorp to shed minority stakes in fertilizer companies in Chile, Israel and Jordan.

The FTC on Wednesday, meanwhile, ruled that a PotashCorp/Agrium marriage would “likely harm competition” in the North American market superphosphoric acid (SPA), and in a specialized, more localized market for nitric acid.

Specifically, the FTC said, PotashCorp and Agrium are two of just three companies in North America making SPA, which is only “rarely” imported from overseas. Agricultural wholesalers and retailers use SPA to produce ammonium polyphosphate (APP) fertilizer.

Also, the agency said, PotashCorp and Agrium each have nitric acid manufacturing plants in Ohio and are the two primary suppliers of 65-67 per cent concentration nitric acid in Ohio, Kentucky, Pennsylvania, Maryland, West Virginia and New Jersey.

Nitric acid at that concentration is used in making fertilizers, explosives, stainless steel and certain specialty chemicals.

The FTC, in its release, cited a complaint that “for most customers, there are no functionally equivalent chemical substitutes for 65-67 per cent concentration nitric acid,” and that it’s “unlikely” a competing player would set up another plant in that region.

Thus, the agency said, PotashCorp and Agrium’s settlement agreement with the FTC requires them to sell Agrium’s SPA plant at Conda, Idaho, about 100 km east of Pocatello, to Itafos, a Cayman Islands-based phosphate fertilizer maker.

Also, the FTC said, the settlement agreement requires the sale of Agrium’s nitric acid plant at North Bend, Ohio, just west of Cincinnati, to New York-based fertilizer and commodity firm Trammo.

Neither of the FTC’s conditions will come as a shock to Agrium, which had already announced deals in early November to sell the SPA plant to Itafos for US$100 million and the nitric acid plant to Trammo for an undisclosed sum, with both sales “intended to address U.S. regulatory concerns.”

When PotashCorp and Agrium first announced their merger plans in mid-2016, major farm groups in both Canada and the U.S. said they would take up the issue with regulators in both countries, citing concerns about lost pricing power.

Canada’s Competition Bureau said in September it had consulted stakeholders in the lead-up to its decision, including the two companies’ customers, competitors, industry groups and government.

However, it ruled the deal “is not likely to lead to a substantial lessening of competition relating to potash in Canada,” and effective competitors were in place in the dry phosphate market.

The bureau also said it didn’t see significant overlap or rivalry between Agrium and PotashCorp in Canadian markets for SPA or nitric acid.

The Nutrien partners in 2016 said they also “remain committed to Canpotex,” the Saskatoon-based potash export logistics and marketing company they own jointly with U.S. fertilizer firm Mosaic Co. — AGCanada.com Network

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Louis Dreyfus is to sell Macrofertil Australia, which has annual sales of around US$120 million, to Agrium’s Australian unit Landmark Operations in a deal expected to close in the first quarter of 2018, the companies said on Tuesday.

Financial terms were not disclosed.

Global merchants such as Louis Dreyfus have seen their margins eroded by large crop inventories, low prices and limited volatility, triggering cost-cutting and divestment moves.

The group has said it would seek partners for its fertilizer, metals, juice and dairy activities to focus more on core activities such as grains and oilseeds.

The group earlier this year agreed to sell its African fertilizer distribution business to Helios Investment Partners, and has hired banks to sell a stake in its metals unit.

“This transaction is another step towards the implementation of our strategic roadmap, enabling us to concentrate on businesses with closer ties to product sourcing and strong farmer relationships,” Gonzalo Ramirez Martiarena, Louis Dreyfus’ CEO, said in a statement.

Louis Dreyfus will retain a fertilizer business in South America following the sale of the African and Australian activities.

Macrofertil Australia, whose network includes six fertilizer storage and distribution assets, has annual volumes of over 300,000 tonnes.

Agrium said in a separate statement the acquisition would complement its existing network of around 400 sites in Australia.

The deal comes as Agrium is preparing to merge by the end of the year with PotashCorp to form Nutrien, a transaction valued at US$25 billion.

The downturn in crop markets has encouraged a wave of consolidation among firms that supply crop chemicals and seeds to farmers.

— Reporting for Reuters by Gus Trompiz in Paris and Rod Nickel in Winnipeg.

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Reuters – Canadian fertilizer maker Agrium Inc , the world’s biggest farm retailer, reported a bigger-than-expected quarterly loss as demand for its products was reduced by severe dry weather in Australia and Canada.

The company cut its full-year forecast for earnings per share from continuing operations to between $4.65 and $4.80, from its previous estimate of $4.75 to $5.25, on expectations of dry weather in Australia and parts of Brazil.

Expenses rose 4.5 percent due to maintenance turnarounds at the company’s production facilities and higher natural gas input costs.

On Nov. 7, Agrium said it had received approval from Chinese regulatory authorities regarding its merger with Potash Corp of Saskatchewan, but still requires U.S. regulatory approval.

The company’s net loss increased to $251 million, or $1.84 cents per share, in the third quarter, from $39 million, or 29 cents per share, a year earlier.

Excluding items, the company lost 23 cents per share, bigger than the loss of 5 cents per share expected by analysts, according to Thomson Reuters I/B/E/S.

Agrium said sales rose 8.7 percent to $2.38 billion.

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Separately, Agrium will sell its North Bend, Ohio, nitric acid plant to a subsidiary of Trammo Inc for an undisclosed price.

The combination of Agrium and Potash Corp is expected to close by year-end, and requires U.S. approval. Agrium did not specify what concerns U.S. regulators have, but Potash is already one of the biggest U.S. phosphate producers.

Earlier on Tuesday, China’s commerce ministry said it has approved the merger on the condition that Potash divest certain stakes in other companies.

Agrium’s U.S. listed shares fell 1.7 percent to $106.01.

Under the deal, Itafos gets Agrium’s Conda, Idaho, phosphate production plant and adjacent mineral rights. The deal includes an agreement for Agrium to supply ammonia to the Conda facility and buy the monoammonium phosphate it produces.

Agrium said it will take a $178 million impairment charge on the Conda sale and retain its historic environmental obligations.

Agrium’s sales to both Itafos and Trammo are subject to approval by the U.S. Federal Trade Commission, the company said.

The merger combines Potash Corp’s fertilizer production capacity, the world’s largest, with Agrium’s network of farm supply stores, the biggest in the United States.

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Winnipeg-based Richardson on Tuesday announced it would buy CHS’s Alberta retail sites at Alix, Beiseker, Bow Island, Carseland, Craddock, Lacombe, Rolling Hills, Standard and Vauxhall, and the co-op’s lone Saskatchewan site at Edenwold, northeast of Regina.

Financial terms of the sale won’t be disclosed, a spokesperson for privately-held Richardson said. The deal is expected to close next month.

All 10 of the sites are full-service crop input retail outlets, providing chemical, fertilizer and seed services, Richardson said.

“We look forward to expanding our presence in these areas and working with local producers to provide them with leading seed, fertilizer and crop inputs technologies, supported by our CropWatch agronomy team and best-in-class service,” Tom Hamilton, Richardson’s vice-president for agribusiness operations, said in a release.

St. Paul, Minn.-based CHS had bought several of those retail outlets from Calgary fertilizer and crop retail firm Agrium in 2014.

Agrium was ordered by the federal Competition Bureau to sell several retail sites after making a deal to buy Viterra’s retail agri-products business. Those sites had included Agrium’s CPS stores at Bow Island and Lacombe and the Viterra stores at Alix, Craddock, Edenwold and Vauxhall.

CHS had already set up a stake in Prairie ag retail at that time, having bought the Alberta ag retail operations of DynAgra Corp. in 2012, including its sites at Beiseker, Standard, Rolling Hills and Carseland.

CHS’s remaining businesses in Canada include its energy operations, based in Calgary; a grain marketing office in Winnipeg; its stake in flour miller Ardent Mills; and a joint venture stake with Alberta co-operative UFA on Bridgeland, a retail and fertilizer operation in the province’s Peace region.

Richardson has been expanding its Richardson Pioneer network on the Prairies in recent years through both new builds and buys. The company this summer bought outlets at Vermilion and Forestburg, Alta., opened a new site at Elrose, Sask. last summer and plans to open a new site at Pasqua, Sask. next month.

Hamilton said Richardson “will continue to target strategic locations to expand our presence and ultimately offer our services, products and expertise to more producers across the Prairies.” –– AGCanada.com Network

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