Overall Outlook Good, But Ag Stocks Falter

Shares in the once-flourishing fertilizer sector have hit the dirt in recent weeks after investors worry that global recessionary pressures would stem demand for commodities despite assurances from the agribusiness sector that its fundamentals remain strong. Ag nutrients company Agrium certainly agrees.

Calgary-based Agrium has its finger on the pulse of the agribusiness industry as the third-largest nitrogen producer and the U.S. leading retailer of crop supplies. On Nov. 5, the company said earnings soared more than seven-fold on strong global demand for meat and dairy products, which increased the cost of animal feed and, subsequently, feedstock prices.

Despite its staggering third-quarter results, Agrium was at the time cautious regarding its outlook for the remainder of 2008, citing falling commodity prices amid a global credit crunch that could force growers to delay supply spending until conditions improve. Agrium, however, said industry fundamentals wouldn’t be strongly affected by recessionary pressures since consumers will never stop buying food and the world’s supplies are in short supply.

Chief Financial Officer Bruce Waterman told Reuters on Nov. 5 that Agrium recently reduced its debt and has expanded credit lines. Waterman said the company is well-positioned to take advantage of acquisitions and other opportunities.

Agribusiness stocks continued to lag. Agrium, Potash Corp. of Saskatchewan, Mosaic, and CF Industries Holdings all closed lower on Nov. 5. Shares of seed companies Syngenta AG and Monsanto haven’t fared much better despite a recent crop report from USDA that said the year’s corn and soybean harvests would be smaller than originally forecast.

Farm equipment companies are likely to be the most affected by tightened credit markets, since growers can delay machinery purchases without sacrificing much crop yield, unlike fertilizer investments.

(Source: Forbes.com)

Leave a Reply

Latest News
Corn Field
Eric SfiligojFacing Ag Industry Challenges
September 26, 2016
At the 2016 annual Mid America CropLife Association (MACA) meeting in September, a pair of crop protection company representatives discussed Read More
Syngenta Seedcare Institute
Seed/BiotechSyngenta Opens New North America Seedcare Institute In …
September 23, 2016
Syngenta unveiled its new Seedcare Institute in Stanton, MN, during a recent grand opening celebration. More than 150 industry leaders, Read More
StewardshipMonsanto Invests $1.6 Million In System To Quantify Gre…
September 23, 2016
The USDA – Natural Resources Conservation Service (USDA-NRCS) recently awarded the National Corn Growers Association (NCGA) and its Soil Health Read More
Pipe rack
LegislationCourt Sides With Ag Retailers On PSM
September 23, 2016
The D.C. Court of Appeals has ruled the Occupational Safety and Health Administration violated the Occupational Safety and Health Act when Read More
ManagementPacific Coast Fertilizer Announces Interest In Longview…
September 22, 2016
Pacific Coast Fertilizer LP (PCF) announced at the Cowlitz Economic Development Council board of directors meeting its interest in developing Read More
Young corn plants in soil
UncategorizedCool Planet Raises Additional $9 Million To Commerciali…
September 22, 2016
Cool Planet has announced the first close of a new financing round to commercialize the company’s Cool Terra Engineered Biocarbon Read More
Crop InputsJim Loar Promoted To President And CEO Of Cool Planet
September 22, 2016
In a move that reflects and reinforces the company’s commitment to the agricultural market, the Cool Planet board of directors Read More
BlendersNorth Dakota Coop Debuts Dry Fertilizer Plant
September 22, 2016
North Central Grain Cooperative has begun operations at a new dry fertilizer plant at its Rolla, ND, site. It is Read More
Crop InputsMonsanto, Bayer Officials Defend Proposed $66 Billion M…
September 21, 2016
Top officials for Monsanto and Bayer defended their proposed $66 billion merger before skeptical senators on Tuesday, insisting that the Read More
ManagementUpcoming Shows & Recent Events
September 19, 2016
Editors Paul Schrimpf and Eric Sfiligoj talk about upcoming trade shows and events and review the Mid America CropLife Association Read More
Industry NewsVerdesian Life Sciences Appoints New CEO
September 19, 2016
Verdesian Life Sciences, a plant health and nutrition company, today announced that its board of directors has named Kenneth M. Avery Read More
Corn
Crop InputsEPA Settles With Syngenta For Alleged Multi-Regional Pe…
September 19, 2016
The U.S. EPA has announced a multi-region settlement with Syngenta Crop Protection, LLC (Syngenta) in Greensboro, NC, for alleged violations of Read More
ManagementMerger Mania
September 16, 2016
Editors Paul Schrimpf and Eric Sfiligoj discuss this week’s mega-ag mergers of Bayer and Monsanto and Potash and Agrium. Read More
Monsanto sign
Crop InputsMonsanto Ends Up Being A Bargain For Bayer
September 16, 2016
History will say Bayer got a bargain in its $66 billion purchase of Monsanto, writes David Nicklaus, St. Louis Post-Dispatch. The Read More
Greg Musson, Gar Tootelian
CropLife 100California Ag Retailer Steps Up To Feed Families Affect…
September 16, 2016
GAR Tootelian, Inc. (GAR) in Reedley, CA, is challenging the Central Valley to help raise enough money and provide 525,000 meals Read More
Crop InputsBayer, Monsanto CEOs Discuss Merger
September 15, 2016
Werner Baumann, Bayer CEO, and Hugh Grant, Monsanto CEO, discuss why they decided to merge their companies. Read More
Corn close up
Crop InputsNY Times: Bayer-Monsanto a Bad Deal for Farmers
September 15, 2016
Via NY Times: Don Halcomb, a 63-year-old farmer in Adairville, KY, is expecting his profit to vanish this year, largely Read More
Werner Baumann, Bayer AG, and Hugh Grant, Monsanto
Crop InputsBayer-Monsanto Merger Creates New Global Ag Giant
September 14, 2016
During the whole of 2016, many of the companies that do business in the agricultural industry have concluded the best Read More