US President Donald Trump announced on his social media platform the US is working on a deal to purchase potash from Belarus. Shares of potash producers Nutrien and Mosaic fell on the news.
Declining arable land per person will force growers to be more productive and should drive growth in a variety of crop inputs.
Bears
Volatile pricing and demand for crop nutrients have characterized Nutrien's business in the past few years, highlighting the cyclical nature of the company's cash flows.
Created in 2018 as a result of the merger between PotashCorp and Agrium, Nutrien is the world’s largest fertilizer producer by capacity. Nutrien produces the three main crop nutrients—nitrogen, potash, and phosphate—although its main focus is potash, where it is the global leader in installed capacity with a roughly 20% market share. The company is also the largest agricultural retailer in North America and Australia, selling fertilizers, crop chemicals, seeds, and services directly to farm customers through its brick-and-mortar stores and online platforms.