Case
Teaching Notes
Supplementary Resources
Abstract
CF Industries’ products—nitrogen fertilizers—are a crucial input to making agriculture productive enough to feed the world. However, its products are undifferentiated commodities. Throughout parts of its history, CF has struggled to be consistently profitable, yet over the last decade it has been very profitable. The case provides an opportunity to examine how CF manages to create value and capture it as profits despite being in a commodity business.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Selected Financial Information for CF Industries
Source: CF Industries 10-K filing, 2014.
Exhibit 2: Anhydrous Ammonia Being Applied
Exhibit 3: Corn Acreage by Year (U.S.)
Source: U.S. Department of Agriculture, National Agricultural Statistics Service, http://www.nass.usda.gov/Charts_and_Maps/Field_Crops/cornac.asp (accessed April 1, 2015).
Exhibit 4: U.S. Domestic Corn Use
Source: U.S. Department of Agriculture, Economic Research Service, http://www.ers.usda.gov/media/521847/cornuse.jpg (accessed April 1, 2015).
Exhibit 5: Ammonia Fertilizer Manufacturing Process
Source: CF Industries.
Exhibit 6: Donaldsonville Expansion
Source: CF Industries.
Exhibit 7: Natural Gas Prices (USD per mm BTU)
Source: BP Statistical Review of World Energy, 2014.
Exhibit 8: CF Industries Sales by Product Segment
Source: CF Industries 10-K filing, 2014.
Exhibit 9: CF Industries Production and Distribution Locations
Source: CF Industries.
Exhibit 10: Ammonia Storage Facility
Exhibit 11: Ammonia Transportation
Exhibit 12: Map of CF Industries and Terra Industries Locations, Pre-Merger
Source: CF Industries.
Exhibit 13: Exports of Urea by Largest Exporting Countries, 2009–2012 (tons)
Note: Exhibit also shows U.S. consumption, production, and exports of urea.
Source: Based on data from the Food and Agriculture Organization of the United Nations, Statistics Division, http://faostat3.fao.org/download/R/RF/E.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
