Fertilizer Handling Take A Hit

October 28, 2015 02:20 AM
 
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Anhydrous prices in doubt amid separate rules on storage, transit

Farm fertilizer is having its red carpet moment in Washington, but it isn’t winning any awards with officials. In two ongoing cases, rule-makers are taking a hard look at anhydrous ammonia, which could mean farmers will pay more for the input because of costs incurred by retailers.  

Ironically, while these measures are intended to protect fertilizer handlers and the rural communities that surround them after two tragic and public accidents, they are proving to be a headache 
in the heartland.

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“In this situation, there are not discernible benefits that would enhance worker or public safety,” says Doug Goehring, agriculture commissioner for North Dakota, referencing OSHA’s new reinterpretation of its retail exemption policy. 

Mandatory Storage Upgrades. It is important for farmers to follow OSHA developments as well as action in Congress involving upgrades to railroads that transport fertilizer to assess how they might affect anhydrous costs. In documents published to its website, OSHA says it projects up to 4,800 sites, including farm retailers, will need to upgrade storage to be compliant. 

In an email, the agency declined Top Producer’s request to answer questions, instead directing queries to its website.

It lists national costs for the first year of implementation at $2,160 per site.

The decision is a response to the 2013 explosion at West Fertilizer Company in West, Texas, which killed 15 people.

Yet Goehring notes the Texas incident involved ammonium nitrate and not anhydrous. He says OSHA underestimates costs: For example, one company that owns multiple fertilizer storage facilities in North Dakota received a third-party bid of $77,000 per facility. If those costs are realized, a third of the state’s retailers could be put out of business, he projects, resulting in higher farm anhydrous prices.

Unrelated to the OSHA decision is a second scenario causing concern over farm fertilizer costs. At issue is a Congressional mandate—set to expire at year’s end, as of early October—that all seven major U.S. railroads make sweeping technological upgrades enabling operators to stop trains with a remote control. 

Train Tech Cliff. The problem? None of them are anywhere close to meeting the deadline, says Mike Steenhoek, executive director of the Soy Transportation Coalition. An extension is highly likely this fall, but failure to move the deadline back could result in “catastrophic” liability for railroads unless they shut down transportation of chemicals.

“Railroads are saying, ‘We’re not going to be able to meet this Dec. 31 deadline. All of a sudden, when the calendar flips to 2016, if we continue to transport these products on our network and we don’t have [Positive Train Control] implemented, we’re operating in violation of federal law,’” Steenhoek says. Rail closures could halt grain shipments, too, so farmers should stay tuned.

To find resources and links to help make your voice heard on key issues facing farmers, visit agweb.com/agriculture-challenge

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