Because of phosphate fertilizer customer trepidation, CF Industries Holdings Inc. made money when an activist lawsuit against Mosaic Company last summer put the operation and expansion of a Mosaic Florida phosphate mine in limbo.
CF Industries CEO Steve Wilson told those present and listening online to presentations during the BMO Capital Markets Farm to Market Conference in New York on May 18 that CF benefited when the Sierra Club sued to stop Moisaic, from what the group claimed would be irreparable damage to the environment. That was a tidbit of good news for CF, and good news for stockholders.
The heads of major agricultural companies listed on the stock market are calculated in the words they say in public because comments tend to either encourage or dissuade stock purchases. Providing insight often causes some shifts in stock prices, and there was a little bump up for CF Industries stock after Wilson’s comment.
Wilson indicated that CF has long-range plans to expand its operation, which is near Mosaic’s South Fort Meade surface mine, but CF is glad it didn’t step forward first to defend itself in court against activists’ challenges. “The biggest advantage that we have is that Mosaic went first,” Wilson is quoted as saying. “We empathize with what they're dealing with.”
Wilson knows that CF will have to address concerns of activists even though he sees CF as doing what is right environmentally to be a good citizen globally and locally. Although Mosaic was first in helping pave the way, he still sees approval for expansion as being a “difficult task,” Reuters news service quoted Wilson as saying.
Environmental concerns that have to be addressed by any fertilizer company is also why Wilson has repeatedly said that the company has no plans to construct new nitrogen fertilizer production facilities in the U.S. Normal nitrogen/anhydrous ammonia fertilizer production typically results in carbon dioxide as a byproduct, which has to be dealt with in an environmentally sound way. Future “carbon legislation” that could negatively impact the company’s carbon footprint is too much of a concern for constructing a new nitrogen plant even though nitrogen fertilizer demand should make such a facility economically feasible.