Shipment courier

CF Industries warns of nitrogen fertilizer shipment delays

CF Industries Holdings, Inc. has advised customers served by Union Pacific rail lines that railroad-imposed shipping reductions will cause nitrogen fertilizer shipment delays during the spring application season and that it would not be able to accept further rail sales involving Union Pacific for the foreseeable future. The company understands that it is one of 30 companies facing 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 regions 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 a major producer of urea, UAN and DEF in North America, and its Donaldsonville complex is the largest production facility for these products in North America.

“The timing of this Union Pacific action couldn’t come at a worse time for farmers,” said Tony Will, President and CEO, CF Industries Holdings, Inc. “Not only will fertilizer be delayed by these shipping restrictions, but other fertilizer needed to supplement spring applications may not reach farmers at all. By imposing this arbitrary restriction on just a handful of shippers, Union Pacific is jeopardizing farmers’ crops and increases the cost of food to consumers.

On Friday, April 08, 2022, Union Pacific advised CF Industries without notice that it was requiring certain shippers to reduce the volume of passenger cars on its railroad effective immediately. The company has been ordered to cut shipments by almost 20%. CF Industries believes it will still be able to deliver products already under contract for shipment by rail to Union Pacific destinations, albeit with likely delays. However, since Union Pacific has advised the company that failure to comply will result in the embargo of its facilities by the railroad, CF Industries may not have shipping capacity available to take new rail orders involving Union Pacific rail lines to meet late season fertilizer demand.

Nitrogen fertilizer application is essential to maximize crop yields. If farmers are unable to obtain all the nitrogen fertilizer they need for the current season due to supply chain disruptions such as rail transport restrictions, the company expects yield is lower. This will likely extend the time frame for global grain stocks to replenish. Low global grain stocks continue to support high first-month and futures prices for nitrogen-consuming crops, which has contributed to higher food prices.

CF Industries intends to engage directly with the federal government to request that fertilizer shipments be prioritized so spring plantings are not negatively impacted.

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

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