New Illinois Fertilizer Project Planned

DECATUR, Ill. (DTN) -- After more than a decade of planning, Illinois Gov. J.B. Pritzker announced an ammonia fertilizer plant will be built in central Illinois, ideally producing nearly 1 million short tons of ammonia within the next four years.

Pritzker, a Democrat, and other officials used the Farm Progress Show as a backdrop Tuesday to announce Cronus Chemicals has secured all necessary state and federal environmental permits and is preparing to begin construction of a new ammonia plant that will cost up to $2 billion to $2.4 billion and take more than 3 1/2 years to build. The plant will be built on about 230 acres just west of Tuscola, Illinois, about an hour east of Decatur.

"This is a major win for our farmers, for our people, the people of Tuscola and, of course, our entire economy," Pritzker said.

Touting infrastructure investments in Illinois, Pritzker said the fertilizer project by Cronus "is a shining example of that vision in action with a new state-of-the-art production facility." He added, "They will be an anchor of the Illinois agricultural industry of today and tomorrow."

Pritzker and other officials also tied high input prices to the president's trade agenda and tariffs. Jerry Costello, director of the Illinois Department of Agriculture, pointed out the average import tariffs for fertilizers have gone from 1% to 12% in the past seven months. That includes an average 10% tariff on nitrogen.

"All of this at a time when row-crop prices are depressed: sub-$4 corn, $10 beans," Costello said.

He added the average U.S. farmer this year will lose income, and only about 5% of all farms are projected to be profitable. That demands more infrastructure to help lower prices and spur economic development, he said.

"Building and investing in ag and this type of infrastructure is more important than it's ever been," Costello said.

The governor mentioned in his news conference, "We've seen fertilizer prices skyrocket. This year, they reached one of the highest price points in over a decade -- a result of challenging federal trade policies with our farms already operating on tight margins."

Anhydrous ammonia right now is priced around $762 a ton. That's 12% higher compared to last year. Still, the all-time-high price for anhydrous is $1,534 a ton in the third week of April 2022 when the industry had major supply challenges, according to DTN Fertilizer Trends data.

In a video, Erzin Atac, CEO of Cronus Chemicals, talked about the need for more nitrogen fertilizer production in the U.S., noting the country imports more than 2 million tons annually.

"The United States of America is chronically short of nitrogen fertilizers in every form," Atac said.

Talking about the project, Atac also said the total investment in the project will reach $2.4 billion. The location for the plant is big enough to eventually add or upgrade facilities for urea and UAN production.

As was noted multiple times, Cronus has secured key environmental permits for the project, including the EPA air permit, as well as the permit for water discharge. Securing those permits was an arduous process given that Cronus and state officials began talking about developing the anhydrous facility more than a decade ago.

Pritzker also mentioned there are state tax incentives for the project, which were spelled out in a document posted on the state's website, though the specific dollar figure of Cronus's incentive package was not announced. The governor's press office stated Cronus would be eligible for more than $4 million from an economic development grant, but that appears to be just one of the incentives offered to Cronus.

An attraction for Cronus in Illinois also is geology. The rock formations under a large swath of Illinois geology are well-suited for carbon capture and storage (CCS). Cronus will be able to reduce the carbon emissions of its anhydrous production by as much as 90% by sinking greenhouse gas emissions back into the ground, Pritzker said. Pritzker noted, "Illinois has the industry technology and geology to be the national leader in CCS."

It's unclear whether Cronus would need to use a pipeline to sink carbon, but throughout the show on Tuesday, a small plane flew around with a banner stating "No CO2 Pipelines Eminent Domain."

Pritzker also got into a conflict in the middle of the farm show's streets when U.S. Rep. Mary Miller, R-Ill., a member of the House Agriculture Committee, was yelling at Pritzker and his staff, shouting, "Why are you supporting illegal aliens and criminals?" as Pritzker and his entourage drove away.

Chris Clayton can be reached at Chris.Clayton@dtn.com

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