What Is Going On? Union Pacific Rail Lines Begin Restricting Rail Shipments of Nitrogen Based Fertilizer During Spring Planting Season


In early March, Tucker Carlson invited Iowa Corn and soybean farmer Ben Riensche on his top-rated program to discuss the massive inflation we are about to see in food prices here at home.

According to Rienshe, grocery prices may increase up to $1,000 per month due to Russia’s sanctions on fertilizer.

Transcript via Real Clear Politics.

“It’s embarrassing how little most people know about fertilizer, what it means, tell us the implications of this sanction?” Carlson asked.

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“Soaring fertilizer prices are likely to spike food prices,” Riensche said. “If you’re upset that gas is up a dollar or two a gallon, wait until your grocery bill is up $1000 a month. And it may not manifest itself in terms of price, it could be quantity as well. Empty shelf syndrome must just be starting.”

“I’m sorry, I just wanted to make sure I heard you correctly. Up $1000 a month?” an incredulous Carlson asked.

“Sure,” Riensche responded. “The price of growing my crops, or the major crops, corn, soybeans, wheat, rice, cotton are up 30 to 40%. They are on my farm. And most of it is fertilizer. Nitrogen prices are up 3 times from the left crop we put in. Phosphorous and potassium have doubled.”

That was in March.

Now this…
A leadering manufacturer of hydrogen and nitrogen products was informed Union Pacific rail lines were reducing and limiting shipments of fertilizer during the planting season this year.

Who made this decision?

CF Industries reported:

CF Industries Holdings, Inc. (NYSE: CF), a leading global manufacturer of hydrogen and nitrogen products, today informed customers it serves by Union Pacific rail lines that railroad-mandated shipping reductions would result in nitrogen fertilizer shipment delays during the spring application season and that it would be unable to accept new rail sales involving Union Pacific for the foreseeable future. The Company understands that it is one of only 30 companies to face these restrictions.

CF Industries ships to customers via Union Pacific rail lines primarily from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa. The rail lines serve key agricultural areas such as Iowa, Illinois, Kansas, Nebraska, Texas and California. Products that will be affected include nitrogen fertilizers such as urea and urea ammonium nitrate (UAN) as well as diesel exhaust fluid (DEF), an emissions control product required for diesel trucks. CF Industries is the largest producer of urea, UAN and DEF in North America, and its Donaldsonville Complex is the largest single production facility for the products in North America.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” said Tony Will, president and chief executive officer, CF Industries Holdings, Inc. “Not only will fertilizer be delayed by these shipping restrictions, but additional fertilizer needed to complete spring applications may be unable to reach farmers at all. By placing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ harvests and increasing the cost of food for consumers.”

On Friday, April 8, 2022, Union Pacific informed CF Industries without advance notice that it was mandating certain shippers to reduce the volume of private cars on its railroad effective immediately. The Company was told to reduce its shipments by nearly 20%. CF Industries believes it will still be able to fulfill delivery of product already contracted for rail shipment to Union Pacific destinations, albeit with likely delays. However, because Union Pacific has told the Company that noncompliance will result in the embargo of its facilities by the railroad, CF Industries may not have available shipping capacity to take new rail orders involving Union Pacific rail lines to meet late season demand for fertilizer.

More here.

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