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Are you pleased with the acceptance of ESN Smart Nitrogen, and how does that new product fit with retailers and their relationships with their customers?
ESN has been very well received. ESN is a new agricultural-grade, controlled-release nitrogen fertilizer, and it represents a significant advance in the fertilizer industry. Growers now have a great product to improve their nitrogen-use efficiency, and they are seeing positive results. Growers can get the same yield with less nitrogen applied in the form of ESN, or when growers use the same nitrogen units, they are seeing an increase of 7 to 10 bu. of corn/acre. Retailers have been very receptive to selling ESN, because it is a product that really complements their offering.
It was available in limited supply in 2004 and will be again in 2005; however, we are planning to expand production capacity significantly in 2006.
What is Agrium doing to provide value-added services to its dealers as margins continue to get tighter and growers carefully watch their input costs?
We offer significant support to ESN retailers, including several management tools, such as grower meetings with agronomy support, point-of-purchase promotional material and a value calculator model that allows the dealer to demonstrate comparative values of different forms of nitrogen. Also, with limited supplies, we are working to validate the performance of ESN with a select number of retailers. They see the value in having a unique product and believe ESN will provide a significant competitive edge, both in terms of the improved nitrogen utilization and by potentially eliminating field application work, such as a sidedress.
As environmental issues continue to be a high priority for retailers and growers, tell us about some of your environmental initiatives and how retailers can play a role in your company's stewardship efforts.
Agrium is committed to protecting the quality of the environment and ensuring the safety of employees, our customers and the public. Agrium's products play a role in replenishing soil nutrients, indirectly reducing greenhouse gases and minimizing destruction of wildlife habitat.
ESN will provide environmental benefits, especially in areas of high rainfall or irrigated land, where a significant amount of applied nitrogen can be lost through leaching. With increasing pressure on growers for responsible nutrient management, we believe that ESN will be a viable solution.
Does the playing field change from Agrium's viewpoint with the new Mosaic Company (formerly IMC Global Inc. and Cargill Crop Nutrition)?
Agrium expects to see little change as a result of the new company. We've been a competitor with both IMC and Cargill for several years, and we will continue to compete with Mosaic. Generally, I think consolidation is positive for the industry. It helps to optimize the overall supply chain; however, retailers will have one less supply source.
What keeps you optimistic about agriculture as the 2005 planting season begins?
As people across the world become more affluent, and their diet and consumption levels change, the ag industry needs to meet that demand for more and better-quality food. Nutrients are a key component in meeting that challenge.
In 2004, we saw some record crop yields across North America and record farm income in the United States. Increased yields mean a lot of nutrients were used last year and need to be replaced. Although grain and oilseed prices are low, it still pays for the grower to fertilize the crop and maximize his yield potential. We believe that growers will continue to use best management practices and replace the nutrients the crops will require to attain their maximum economic yield. Our recent announcement that we are investing in a new plant to expand the production capacity of ESN Smart Nitrogen in 2006 is a good indication of just how optimistic we are about agriculture.
As senior vice president of Agrium's wholesale business, Ron Wilkinson is responsible for marketing, distribution, supply management, plant operations, and environment, health and safety.
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Software developers and suppliers 2005
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Fertilizer outlook
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