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Fertilizer Manufacturer Warns of Supply Crisis Due to Railroad-Mandated Shipping Reductions

Fertilizer Manufacturer Warns of Supply Crisis Due to Railroad-Mandated Shipping Reductions

Priorities! Buttigieg is in the Netherlands attending Invictus Games as major fertilizer suppliers say Union Pacific train reductions shrinking supply during crucial planting season.

A leading global manufacturer of fertilizers is warning customers that Union Pacific rail lines’ new railroad-mandated shipping reductions would result in shipment delays during the crucial spring plating season.

Fertilizer producer CF Industries is criticizing Union Pacific’s plan to reduce the number of railcars on UP’s network in order to reduce congestion, saying the measure would result in delays to customers’ shipments during the spring application season.

CF Industries, a Deerfield, Illinois-based manufacturer of hydrogen and nitrogen products, also said it would be unable to accept new sales involving UP (NYSE: UNP) for the foreseeable future.

UP said Monday in a service update that it would be removing 2% to 3% of UP-controlled cars from the network across multiple commodity groups to maintain fluidity and reduce inventories on the system.

UP’s plan to improve network fluidity also includes adding more employees and locomotives.

CF Industries said it would appeal UP’s actions to the federal government and ask that fertilizer shipments be prioritized ahead of the spring season.

The company is going to ask the Surface Transportation Board, which is part of Pete Buttigieg’s Department of Transportation, for an assist in resolving this situation.

“The timing of this action by Union Pacific could not come at a worse time for farmers,” CF Industries CEO Tony Will said in a statement on Thursday. “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.”

….CF Industries said it will ask the Surface Transportation Board to intervene so that fertilizer shipments are prioritized.

“CF Industries’ North American manufacturing network continues to produce at a high rate to meet the needs of customers, farmers and consumers,” Will said. “We urge the federal government to take action to remove these Union Pacific rail shipment restrictions to ensure this vital fertilizer will be able to reach U.S. farmers when and where they need it.”

We wish the fertilizer manufacturer a ton of good luck with that plan. Given that the Transportation Secretary is busy at the Invictus games with his spouse and his presidential ambitions, resolving this issue does not seem like a priority.

Transportation Secretary Pete Buttigieg will travel to the Netherlands this week to lead a presidential delegation to the Invictus Games, an international sporting competition for wounded veterans, U.S. officials said.

Buttigieg and his husband, Chasten Buttigieg, will be at The Hague for the event, which Prince Harry and his wife, Meghan Markle, are also attending. The secretary will be in attendance for the opening ceremony and speak at a welcome event for the U.S. team.

It is the second international trip on behalf of the Biden administration by Buttigieg, who has sought to burnish his foreign policy credentials as he considers whether to run for president again in the coming years. In November, Buttigieg traveled to Glasgow, Scotland, for the COP26 U.N. climate summit.

How worried should Americans be about the potential for food shortages? CNBC recently did a piece concluding that American need not worry.

Despite the prospect of continued rising prices, however, experts don’t expect food shortages to occur in the United States.

“It’s important to realize that the U.S. doesn’t import very much from Ukraine,” explained Joseph Glauber, a senior research fellow at the International Food Policy Research Institute.

“We may see some shelves that are empty for various kinds of food products like we have for a while now as we recover from the pandemic,” said Scott Irwin, chair of agricultural marketing at the University of Illinois Urbana-Champaign. “But I can say with some real confidence that in the United States, the average consumer is not going to see a shortage of bread because of what’s going on in Ukraine.”

Given the quality of reporting by the American press, and the complete lack of interest in pursuing challenging stories related to infrastructure and economics, I assert that it is very much time to worry. Especially as our leaders are more interested in hanging out with international glitterati and celebrities.

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Comments

taurus the judge | April 22, 2022 at 9:11 am

Never allow yourself to believe this isn’t well planned, coordinated and precision executed to destroy what we currently know as the USA in order to bring about globalism.

Also, realize that the RINO ( not the left) is the greatest enabler and threat.

I never really wanted to live in the universe of Atlas Shrugged but here we are. When will they pass the Anti-Dog Eat Dog Rule?

    henrybowman in reply to Martin. | April 22, 2022 at 4:24 pm

    Look back on the homepage for a story about California’s Net Neutrality, a perfect Anti-Dog-Eat-Dog Rule.

Typical Dem-Coward hit and run avoidance strategy. Petey is enjoying a taxpayer paid vacation anywhere but here. What a mook,

“…the average consumer will not see a shortage of bread….”

Heads-up: prepare for a shortage of bread.

    henrybowman in reply to lichau. | April 22, 2022 at 2:17 pm

    Perzackly.
    “How worried should Americans be about the potential for food shortages? CNBC recently did a piece concluding that American need not worry.”
    Is it anything like the piece they did reassuring us that inflation was transitory and good for us?

Can it be simple coincidence that on the heels of a pandemic, that we now know was almost certainly man made, during which we locked down and destroyed many small businesses while protecting mega corporations that:
1. We have oil above $105
2. An Admin that lowered rig count by 18K by regulation and EO
3. A proxy war in Ukraine that contributes to energy disruption
4. Shortages of fertilizer from Belarus and Russia exports
5. A poor winter wheat harvest
6. Bad prospects for Spring planting in Ukraine and sanctions on Russia;
7. Riots over food prices/shortages in Sri Lanka and Peru
8. Famine or severe food shortage across N Africa and Central Asia predicted by every organization
9. Rampant inflation caused by massive money printing and foolish policies in response to Covid
10. A dozen mysterious damaging incidents at domestic food warehouse or processors

All of which combine to cause sustained high fuel prices, sustained crop interruptions worldwide and a tattered supply chain/ distribution system. I suppose that all these things could be the result of successive bad rolls of the dice. On the other hand, if one had a goal of eliminating the middle-class yeomanry to create a neo-fuedal system with a technocratic elite ruling the impoverished masses all these things in combination would be a good place to begin the process of transformation.

Lack of fertilizer is bad, but maybe not enough to shock the public into action. Give it a couple of months when the movement of the reduced amount of grain that farmers manage to produce is further restricted by the same ridiculous manufactured freight “shortages”.

We likely won’t starve but we are going to be paying hugely inflated prices for food this year (including grain fed meat).

Bright side – the real impacts of the short harvest will become glaringly evident right before the mid-term elections.

E Howard Hunt | April 22, 2022 at 11:28 am

The byproduct of Mayor Pete’s special kind of love should more than make up for any manure shortage.

Warren Buffett owns oil tanker railroad cars which ware in competition to XL. What is displacing shipments of fertilizer and who owns those cars or benefits from their reduction?

Why are we taking the fertilizer manufacture’s word for this? I need much more information myself. If UP is trying to relieve congestion wouldn’t that improve throughput, thus improving fertilizer throughput as well? I am not saying we trust one over the other, we should just have more information before deciding this is actually a problem. After all UP is claiming they want to reduce inventories on their lines, not deliveries.

    Dathurtz in reply to NotCoach. | April 22, 2022 at 5:54 pm

    I don’t know the cause for sure, but I can tell you that farmers in my area are mostly skipping the N fertilizer this year if possible. Prices are much much more expensive than what they were last year.

    My country boy prediction: grains are going to cost significantly more and livestock that depends on that grain will cost significantly more. Other types of crops shouldn’t be too horribly affected this season, but will be in the future if this continues.

Invictus games or in-rectus games?

Buttigieg is such a sanctimonious and narcissistic clown. He perfectly typifies the Dumb-o-crats’ obnoxious sanctimony and self-perceived “enlightenment.”

“Fertilizer company warns of supply crisis.”

Which means” “We are worried our profits will be down.”

    Another Voice in reply to Peabody. | April 23, 2022 at 12:39 am

    Up State Corn, Oats, Hay and Soy Bean Country
    Fertilizer orders for this coming month are up over 30% with no guarantee the quantity needed will be available to be picked up (or delivered) as needed. Family member putting in 1600 acres.
    How is this not going to raise your end come this time next year? Let’s not even go there for Diesel Fuel to put it down, to planting and harvesting.

Geez… I looked at lawn fertilizer recently and it’s ridiculous. LGB.

Free State Paul | April 22, 2022 at 5:07 pm

Another thing in short supply in the Midwest is “Diesel Exhaust Fluid.” Hadn’t heard of it before, but it’s used to reduce Diesel engine emissions. Evidently, the engines are programmed to shut down without it. Sounds like there’s no workaround.

No DEF and farm equipment doesn’t work, even if the farmer can afford the price of diesel.

    If it what I think it is, it should be just a mixture of urea. As I recall they use it to bind to some of the stuff in diesel exhaust.

    Given various localizable production methods, I would be surprised if some enterprising folks didn’t find some viable substitutes.

    Or reprogrammed the engine control units, but that would be illegal.

      Free State Paul in reply to Voyager. | April 22, 2022 at 5:56 pm

      From what I read, the DEF has to meet very exact specifications for the engine to recognize it as such. Not something a farmer could mix up himself. But maybe someone with chemical expertise and the proper facilities could mix it up locally? I don’t know. Like I said, I never even heard of it until a few weeks ago.

How can UP have a congestion problem, when overall shipment volume must be way down considering the problem with west coast ports.

    Gosport in reply to randian. | April 23, 2022 at 12:23 am

    Good question. I’d also ask how UP managed to be short of locomotives and trained crews right when it potentially hurts the nation the most.

    Some might claim coincidence, but I’ve learned not to take coincidences at face value.

      CommoChief in reply to Gosport. | April 23, 2022 at 1:11 pm

      Perhaps early retirement due to proposed vax mandate? This one issue, people who had the financial ability to walk, has a good deal of impact in a tight labor market. Especially in occupations that require training and years of experience. Add in regulatory barriers or union rules and we have a lot of friction all at once.

      Yes an employer can replace a particular worker but the new guy/girl won’t be nearly as productive as the person who near replaced. In a normal labor market this impact is smothed out but when a large % of the most experienced and therefore most productive employees depart simultaneously the impact cuts deep.

The most interesting thing about this story is that CF Industries and Union Pacific are owned by the same investors.
Vanguard Group is the largest shareholder in each. The others in the top ten of ownership shares are pretty much the same for each company, in a different order.
The do not need to complain to the DOT, they could just deal with it at the next board meeting. Unless this is a scam to get more piles of cash.