About W. Will
In a March 2022 interview, W. Will, CEO and president of CF Industries Holdings, described the global fertilizer shortage as a "huge problem" and a "catastrophic" situation. He attributed the shortage to unprecedented demand, a falloff in supply, and the war in Ukraine, which disrupted exports from Russia and Ukraine. Will noted that Russia and Ukraine have historically exported about 30 percent of global wheat trade and 20 percent of global corn trade, and he stated that Ukraine is not expected to plant a normal crop the following year due to damage to infrastructure and displacement of people.
Will stated that CF Industries has pushed out some maintenance activities and added logistics capabilities, such as vessels and rail cars, but said there are "very few incremental tons" of nitrogen production that can be added. He highlighted that North American producers have a cost advantage because natural gas prices in Europe are significantly higher than in North America. Will said the company is in close contact with customers in Latin America and is beginning to export on a humanitarian basis to get nutrients to that region. He called for a peaceful ceasefire in Ukraine to allow farmers to return to the fields.
Source: AI-verified profile updated from W. Will's recent appearances.
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Transcript (8 segments)
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Sarah0:10
Sarah, great to be here. Thanks for having me. It is a huge problem. The globe is very tight on fertilizer. It's a confluence of factors: unprecedented demand coupled with a huge falloff in supply availability, only just exacerbated by the war in Ukraine and what's going on with exports coming out of Russia and Ukraine.
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W. Will0:37
What are you doing about it? How do you ramp up to help meet that demand?
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Sarah0:42
Nitrogen production is very much large refineries, chemical plants. We run those plants 24/7, 365. There are very few incremental tons that we can make.
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W. Will1:10
As I understand it, it takes natural gas to produce fertilizer, something that you have access to, unlike some of your international competitors, pretty cheaply. So how much of an edge is that for you?
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Sarah1:21
Being a North American producer is huge for us. We pay somewhere in the neighborhood of five to six dollars per MMBtu of natural gas. Europe is currently paying about 35 to 38 dollars per MMBtu. That is multiplied by 35 just to get to one ton of ammonia, multiplied by 10 million tons, which is what we produce annually. So that is the huge spread between low-cost production and high costs, and that's one of the reasons why fertilizer price is what it is. It's not only a lack of availability but the high cost.
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W. Will2:11
This is a problem of catastrophic proportion. Not only is the issue lack of availability and affordability of nutrients and inputs, but also Russia and Ukraine have historically exported about 30% of global wheat trade and 20% of global corn trade. Stocks are not getting out of the market because the Black Sea is closed. We do not expect Ukraine to plant a normal crop next year due to damage of fuel depots, infrastructure, farm equipment, and dislocation of people. So take a very tight food situation and multiply it tenfold by a lack of production coming out of the world. This is a problem of epic proportion.
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Sarah3:10
We need to bring about a peaceful ceasefire as quickly as possible and try to get farmers back into the fields in Ukraine and make that growing region productive. Additionally, we're doing all that we can, not only in terms of logistics assets here domestically but in close contact with a number of our customers in Latin America. We're going to begin exporting on a humanitarian basis just to get nutrients down to a region that's a very rich growing area but also starved for nutrients right now. I think that that is really what we need to do: point tons that are available to the regions that are most in need of them.
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W. Will3:51
Tony, will you thank you for joining us?
