Fertilizer Prices are Soaring

Posted by Louis Navellier on 5/27/08 11:12 am

This post contains two fertilizer stocks that are top-ten holdings.

If you thought food and energy prices were skyrocketing, take a look at what is happening in the fertilizer market.  Two of the most widely desired elements in fertilizers are phosphate and potash.  And prices for both are soaring off the charts.

Phosphate, a mineral found in fossilized marine life, is up roughly 175% since last year; and potash, a rock mined from the earth, is up a staggering 200%.

Fertilizer costs are now eating away at farmers’ profit margins more than fuels, seeds, livestock, machinery, and chemicals.  As such, farmers are begging lawmakers to step in and do something about it, but their plight will not be easily resolved.

The reason is there are obscure laws around the world that protect makers of phosphate and potash from antitrust laws.  In the U.S., the 1918 Webb-Pomerene Act is one such law that allows Mosaic Co. of Minnesota to set its prices by following price increases from competitors.

Here are two phosphate and potash companies that are top-ten holdings in one of our all-cap portfolios.

Dynamic MPT Portfolio:
Mosaic Co. (MOS); 1-yr Chart; Profile
Potash Corp. (POT); 1-yr Chart; Profile

As I mentioned, putting a lid on fertilizer price increases will not occur overnight.  In fact, prices will likely continue to climb for the foreseeable future.

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