Illinois farmer Patrick Scates is getting ready to cut the ribbon on a project that is rising from the ashes like a Phoenix.
He is betting that the cheapest fertilizer storage is the kind nobody has to build alone.
His newest site, at Shawneetown, Ill., on the Ohio River, is in testing and targeted to go live around Dec. 1. The site previously had a fertilizer warehouse but it wasn’t rebuilt after a fire in the early 2000s.
Scates says now is the time and the timing is the point.
The next fertilizer crunch will not wait for a farmer’s schedule, so the infrastructure has to be there first.
As president of Scates Group Intermodal River Terminal, LLC, he led the effort to open a fertilizer warehouse in Helena, Ark. This southern Illinois terminal is the second project, and the third and fourth are also in the works.
A service company, not a fertilizer company
Scates Group isn’t entering the market as a wholesaler. Rather, the company contracts its storage space and manages the product receiving, blending, and handling.
“We don’t buy, sell, or trade any product,” he says. “I get an agreement to offload their product, store it, and ship it out. I’m paid to do that.”
The model matters because of instead of a single company investing in storage, Scates’ terminals can house multiple companies’ products at a time.
“They’re [fertilizer suppliers] building infrastructure for just their business,” Scates says.
His answer is to put two wholesalers under one roof, with him as the neutral party.
“We’re that firewall,” he says.
Neither wholesaler sees the other’s customers orders or volumes. If the shared costs shave “a few dollars per ton” off fertilizer, he says, that reaches the farmer’s price.
“You’re not going to bring it down by 50%, but if you can shave a few dollars per ton off of that.”
Why storage matters when supply leans on imports
The U.S. makes a lot of its own nitrogen, but a large share still arrives by ship and then dispersed via the inland waterways. Josh Linville of StoneX lays out the exposure: The country imported 5.2 million tons of urea, 2.2 million tons of UAN and 2.1 million tons of ammonia.
Take urea as the example, the U.S. imports about half of what is used here. Linville’s analysis shows roughly 6.7 million tons of urea produced in 2025 against about 5.4 million imported and about 11.2 million of demand.
The Strait of Hormuz is where that exposure shows up. Stone X’s numbers put urea exports from Qatar, Iran and Saudi Arabia at 14.7 million tons in 2025, about a third of global urea exports. That is the corridor Scates points to when he describes this year’s logistics breakdown.
A farmer or a wholesaler cannot change where a ton of urea is made. Scates’s argument is that they can change where it sits when a disruption hits, and how fast it moves once it does.
Terminals that unload at 500 to 1,000 tons per hour, blend a truck in minutes and let several wholesalers share the cost are the pieces of the system that can be built in months, not the years and billions a new plant takes. Storage also changes who is exposed. Product already on the river in the spring is not on a vessel somewhere else when the next disruption closes a shipping lane.
Speed is the product
Scates started in Helena, where his company has operated for four years. The old terminal moved about 20,000 tons of fertilizer in the year before he took it over, and he expects close to 100,000 tons this year. Barges come off at about 200 tons per hour there.
Shawneetown is built from the ground up with modernization foundational to its design. The 20,000-ton building receives at 500 tons per hour and loads out at 250. Scates says a future site he is looking at would unload at 1,000 tons per hour.
The local market is large-scale.
“Efficiency and speed is the name of the game,” he says of southern Illinois farms.
Fertilizer there has traditionally come from Metropolis, Ill.; Scott City, Mo.; Mount Vernon, Ind.; or Henderson, Ky.
Scates says blend speed is also key, and the Shawneetown site will have a 8-minute turnaround time for a truck from the point in time they scale in to getting fully loaded and the tarp on. He expects 70% of the product leaving the terminal to be blended and headed straight to the field, mostly in tender wagons, and reducing the stopover at a retail storage site. And the site is equipped to custom blend by the truckload.
“You’re cutting that transportation cost, and you’re cutting that on your retail storage site as well,” Scates says.
“Twenty years ago, there were 5 recipes that went out. Now there’s 200,” he says. He expects retailers and farmers to use that capacity to build a recipe for a specific farm and pick up “a little extra yield.”
He’s working to pair the inbound capacity for fertilizer with outbound river loading for other products, including grain via partnerships.
The case for a fertilizer reserve
Scates’s larger argument is about national security.
“Food security equals national security. For food security, you gotta have fertilizer security,” he says.
He points to this year’s disruption out of the Strait of Hormuz. “There are people that will argue that in June, we were 1.3 to 1.5 million tons short of urea,” he says.
New domestic plants will not close that gap quickly, because “it takes 4 years and $4 billion to build a plant.”
Storage is faster.
He is pitching a strategic fertilizer reserve to USDA and elected officials, and he has a pilot in mind: roughly 100,000 tons of storage each at four sites: St. Louis, Tulsa, Mount Vernon, Ind., and Helena. He chose them for river access, rail and truck markets. If the pilot works, he would look next at St. Paul-Minneapolis, Cincinnati and Louisville.
Scates says it cannot work like the oil reserve.
“You can’t just stick urea in a warehouse and leave it and never think about it again until you need it. It’s got to constantly rotate into the market,” he says.
He does not claim a reserve could carry the country through a planting season.
“We could never build enough storage to get us through an entire planting season, but we can move the needle enough that maybe urea doesn’t go from $420 to $900 like it did this year. Maybe it only goes to $600.”
His comparison: “If the government is going to invest in rare earth mines and storage and semiconductor factories, it is as important, or more important, that we invest in fertilizer infrastructure and storage.”
Why the river
Scates calls barges the most economical way to move product inland, and says rail and the river should work together.
“The interstates are kind of like the heart, and the river system are those veins providing commerce to the heart of the ag industry,” he says. His strategy is to push product as far inland as the water goes and connect to rail from there.
Scates will share more at the 2027 Top Producer Summit, where he’s a panelist for the general session: From Farm Gate to Global Market: The Transportation Shifts Reshaping Agriculture. Click here to register
