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Business of buying department

CNH turnaround?

Things are looking sunnier for CNH (Case IH/New Holland) just weeks after a five-for-one reverse stock split and a debt exchange with primary stockholder Fiat. At least one analyst has upgraded CNH stock to a “buy” in recent days. The main reason for that upgrade is a drop in CNH equipment operations net debt to about $1.5 billion. And the company's net debt-to-capitalization ratio changed from 56 to 24%. The company now has more breathing room — time it needs to get its new tractors, combines and equipment out in front of farmers.

Fueling production costs

Higher diesel fuel prices are driving up the cost of producing an acre of corn and soybeans. The current diesel fuel price of about $1.50/gal. is $0.50/gal. higher than last year's price, reports Gary Schnitkey, University of Illinois Extension farm financial management specialist. Because most farms use 5 to 6 gal. of fuel/acre for tillage, planting and harvesting operations, production costs will rise $2.50 to $3.00/acre due to the extra $0.50/gal. diesel price. Schnitkey points out that other fuel needed for general use and grain hauling will raise the overall fuel cost to about $3.50/acre.

Farmland sells fertilizer assets

Koch Nitrogen Company recently purchased selected fertilizer assets from Farmland Industries. A federal bankruptcy court in Kansas City, MO, approved the sale.

The purchase was valued at $293 million. The assets included four fertilizer plants in Beatrice, NE; Dodge City, KS; Enid, OK; and Fort Dodge, IA; and 12 terminals in Aurora and Greenwood, NE; Barnesville, Murdock, and Vernon City, MN; Conway, KS; Farnsworth, TX; Henry and Mattoon, IL; and Garner, Sergeant Bluff, and Keota, IA. The purchase also included Farmland's 50% share of Farmland MissChem Limited, which owns an ammonia plant in the Republic of Trinidad and Tobago.

Other purchased assets not included in the Koch Nitrogen bid were the nitrogen plant in Pollock, LA, purchased by Vanguard Biosynfuels LLC, and the ammonia terminal in Devils Lake, ND, purchased by CF Industries.

New corn herbicide

Sipcam Agro has received U.S. EPA registration for Stalwart, a new metolachlor herbicide. The selective preemergent controls annual grasses and broadleaf weeds in corn. The company did not divulge price information but said it is positioning the product as “a value-oriented choice” in metolachlor herbicide. The emulsifiable concentrate will be available in 2- × 2.5-gal. cases, 260-gal. mini bulk and bulk. The product label can be viewed at

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