Offshore sourcing of Fertilizer: the Challenge to Local Cooperatives

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Off-shore sourcing of Fertilizer the
Challenge to Local Cooperatives
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(No Transcript)
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Manufacturing/Supply Chain

• 1990
• Domestic
• All products

• 2005
• Off Shore/Imports
• Urea
• UAN
• Domestic
• Phosphate
• Anhydrous

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Energy Costs

• 1990
• Stable Market
• Natural Gas 2.50

• 2005
• Volatile Market
• Natural Gas 13.00

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Transportation

• 1990
• Reliable
• Predictable
• Long term rates
• Barge to Truck

• 2005
• Multiple rate changes
• Fuel surcharges
• Mode of Transportation,
• Routes Change
• Vessel to Barge or Rail to Truck

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Warehousing/Storage

• 1990
• Continuous
• Supply

• 2005
• Planned Supply
• Blocks offered by Month

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Relationships

• 1990
• Seamless
• Manufacturer
• Distributor
• Dealer

• 2005
• Price sensitive
• Commodity driven

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Marketing/Risk Management

• 1990
• Fill Programs
• Price Protection
• No Contract Penalties

• 2005
• Daily Pricing
• Contract enforcement

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Dealer to Grower

• 1990
• Priced product
• For the season
• Unlimited supply
• Little risk

• 2005
• Planned approach
• Offer risk management tools

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Potential Market Risk/Retailer-Grower

• 1990
• 20

• 2005
• 200