Fertilizer producers are next in line to benefit from rising crop prices, with farmers poised to plant more acres in 2021.
For the world’s handful of companies that produce potash — a potassium-rich fertilizer mined underground from evaporated sea beds — it is the light at the end of the tunnel following several volatile years. Bloomberg’s Green Markets pegs global potash demand at a record in 2021, while Morningstar Inc. says it will likely set a new “high watermark.”
Farmers’ incomes in the U.S. and Canada are up from a year earlier, boosted by crop prices that surged to multi-year highs on the back of strong demand from China and by pandemic-related government stimulus.
As farmers invest their profits back into their farms and expand their plantings, they’ll need more fertilizer.
“That was a false start with the pandemic and all the talk of a terrible year, but now we see a huge rally in food prices ll the vital signs,” Pedro Farah, chief finance officer of Canada’s Nutrien Ltd., said during a presentation last week.
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