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Fertilizer sales help co-op break records

Sales of insecticides, herbicides, other farm chemicals called strong


Capital Press

AMERICAN FALLS, Idaho -- Led by the strength of their fertilizer division, officials with Eastern Idaho's Bingham Cooperative said they set a sales record during the fiscal year that ended Aug. 31.

The cooperative's Minnesota-based parent organization, Cenex Harvest States Inc., has reported strong fertilizer sales across the board among member cooperatives.

Jim Grauberger, agronomy manager with Bingham Co-op, said overall profits were up by roughly 15 percent from the prior fiscal year. Sales volumes were also up, though more specific numbers won't be available until February. Profits are returned to the cooperative's 500 members, most of whom are growers, in proportion to their purchases.

Grauberger said sales of insecticides, herbicides and other farm chemicals were also strong. He attributes the increases largely to strong commodity prices leading growers to make greater investments in their crops to generate maximum yields.

"These guys are making sure that what they spend on their acre gives them a return on their investment. As we increase our acre output, it takes more fertilizer and chemicals to get that done," Grauberger said.

"Fertilizer has been a major contributor to the financial performance of many farm supply dealerships," CHS spokeswoman Annette Degnan said. "With grain prices at the levels that they are over the last several years, farmers have responded with a more robust program for their fertilizer application."

CHS represents 1,100 cooperatives and 50,000 individual producers in the Central Plains, Upper Midwest, Eastern Corn Belt and Pacific Northwest.

Due to market volatility, however, Grauberger said the cooperative has put off buying a supply of fertilizer for spring.

"Typically by now we would have one-third to 50 percent of our spring needs put into our sheds. At this point, we're not buying fertilizer for spring because we don't know where that market is going to go," Grauberger said.

University of Idaho Extension economist Paul Patterson said this growing season has been marked by volatility within the fertilizer industry, with dry urea prices rising 13 percent and liquid costs up 7.7 percent in southern Idaho. He agrees favorable commodity prices have helped drive fertilizer sales.

"When commodity prices are higher, growers are both capable and willing to spend more on inputs," Patterson said.

He noted growers this season also shifted acreage toward crops that use more fertilizer -- stepping up corn production by 4.5 million acres nationally and increasing potato and sugar beet acres in Idaho.

J.R. Simplot Co. vice president of global agricultural sales, Mark Auchampach, said demand for fertilizer is up throughout the world, and he envisions it will be a long-term trend.

"Volumes (of fertilizer sold) are growing globally just because of the increased food production required," Auchampach said. "What's driving that is the fundamental of global population growth."


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