bluetick

Potash Substantially Reduces Guidance

This co could have had a banner year in 08-09, second only to the year previous. But for reasons unknown, they decided that selling potash for $550 with production cost at $100 just wasn't good enough, so they raised the price another $250. The "deferred purchases" you mentioned are not deferred, they are gone. US farmers decided that $800/ton potash was too salty to digest and elected to use little or none on the 2009 crop. They will not "double up" in 2010 either, as POT's mgt would lead you to believe. The 08-09 profits that could have been are lost forever, thanks to mgt who thought they could create a shortage and fleece it's longtime farmer customers, totally disregarding crop prices that were cut in half from the previous year. The POT shareholders, employees, and customers got hosed, and greed on POT's part was the culprit.

Global Farmland Disappearing at an Alarming Rate

There is a substitute for farmland, to some extent, called fertilizer. Without it, we would be starving today. To those who think organic farming is the answer, organically grown crops could not feed a minor fraction of the world's demand for food. Fertilizer simply allows a quantity of grain to be grown on a lesser acreage of land than could be possible without it.

Potash: Thesis versus Reality Yet Again

Potash might get in short supply at $250/ton, but at $750/ton there will be plenty to go around. Doyle should know by now that farmers won't pay the price for a shortage somebody tried to create by cutting production in half. Who really lost out? The mining employees who were sent home and the stockholders who thought POT knew what they were doing regarding running the company's business.

Potash: Fertilizer for the Economy's Green Shoots

I just read where POT cut their potash production another 800,000 tons for calender year 2009, which made a total of 5.5 million metric tons of production cuts since Aug 2008. Their DAP plant in FL is also either shut down or seriously throttled back also, I'm told.
I thought you said "these products are obviously in strong demand."
Did I miss something here?
This stock crashed & burned last fall amidst the greatest earnings period in history, then doubled from the low during a period when it's sales of potash plummeted worse y-o-y than ever before.
There may be a strategy to trade this co, but fundamentals will get you killed.

Mosaic's Earnings Miss Is Not So Terrible

Phosphate buyers are returning to the table slowly because Dap prices have dropped $700/ton from Mosaic's posted prices of $1000/ton from April through Oct '08 to the $300 range now in the US mkt.
Potash prices have dropped from the $800/ton range in Q3 of '08 to the $600/ton range in April '09, but farmers are still staying away in droves. They got mad last fall when fertilizer prices skyrocketed while crop prices were crashing, and left the party.
Mosaic held the line on potash during this time, and their results for Q3 were predictable. They killed the golden goose (greed?) and the results were the same as in the story.

If Stupidity Got Us into This Mess, Why Can't It Get Us Out?

TeresaE, You could not have said it any better.
I cannot conceive how the masses who populate the greatest nation on earth, with the most opportunity for those masses to prosper, degenerated to the level of stupidity present today. You see it in personal finance, the lack of effort in raising their children to be responsible citizens, the lack of honesty and work ethic, you name it.
We have even let our country come to be run by professional politicians who largely have no clue how to do anything constructive outside getting reelected, and we accept that fact while we do nothing about it but moan.
This country has literally thousands of 80 yr old millionaires who made every penny by hard work, common sense living, and the gift of a little logic.These same men were barely educated, many in two room schoolhouses, likely for 8 or fewer years. Yet they succeeded far beyond their wildest dreams, while many of our people don't have enough sense to even avoid buying lottery tickets or taking on debts they could never begin to repay. How did this proliferation of sheer stupidity get this entrenched in our country?

Adding to My Short Position in Potash

Nitrogen & phosphate prices have dropped dramatically since last fall, but the potash price has dropped little if any. For that reason, potash usage in North America will be drastically lower this spring. Look for earnings to drop likewise in Q2 for the potash producers. All said, the farmer has the last word, and he will show the producers that he can live without potash for a year. The producers can likewise live with lower sales for a year, but it won't be pretty.

Taking Prudent Approach: Exiting Potash

Potash Corp needs to look no further than last Sep's $250/ton price increase to find the error of it's ways. A close parallel would have been for the oil co's to increase the price of gasoline to $6/gallon when it was selling at $4. The potash market was straining to sell potash to farmers before the $250 price increase, but Potash Corp, in a typical show of arrogance, thought potash was the new gold, and took an almost 50% price hike. Guess what? Their phone stopped ringing,their customer's phones stopped ringing, mines had to be shutdown, (a prolonged miner strike actually delayed the shutdown), sales went to hell in a handbasket, inventories maxxed out, and the customers of Potash, who get the product from the mine into the hands of farmers and onto the ground, have been slaughtered by destruction of demand and falling value of inventory. Thanks Potash, congratulations for killing the golden goose.

Intrepid Potash: Funny Business?

What did the author say that confused IPI with POT?
I read it again and must have missed the implication re $240 you made.

Killer IPOs: A Cautionary Tale

Can anyone explain how IPI has a 9X increase in earnings vs same qtr last year, no debt, solid demand for their potash at 5X production cost, and the stock goes to hell in a paper sack?

Corn and Its Industry: The Next Tobacco

Fertilizer prices will get in line with the value of the crops they are used on, and sooner than later.

The POTs, MOS, TRA's, CF's of the world can no more afford to not sell the only product they produce than can the rest of us. Their mgt is reluctant to cut prices when there is no prompt demand (now), but when serious demand returns in Nov/Dec, their prices will fit what a farmer can afford to pay. Otherwise, no sales, no profits, no jobs.

Also, has anybody read that the Asians have changed their eating habits back to rice 3X a day? Have they solved their projected population increases in the last 60 days? Just wondered, since corn dropped from $8/bu down to $3.50 in last quarter or so. Thank the 1)Hedge fund fiasco, 2) Financial collapse, 3) Upcoming election.

Corn and Its Industry: The Next Tobacco

This is probably the most ridiculous article I have ever read. The US is full of 75-90 yr old geezers who have eaten corn fed critters every day of their entire lives.

The US & world can no more exist as we know it without corn, it is as essential as clean drinking water and electricity to our lives.

Corn provides about half of the feed rations for cattle, pork, & poultry, the other major ingredient is soybean meal. There is no suitable substitute that can be grown in adequate volume to replace corn- none.
If there was, we would have switched to it decades ago.

The author is correct about our general poor state of health, but it is solely due to the fact that we sit on our dead butts and refuse to get a needed amount of exercise on a regular basis. The ones of us who do can get away with almost anything in our diet and still remain very healthy. The ones who shun exercise are the ones you read about in the obits in their 50's.

Finally, E85 will likely never be a viable, competitive source for auto fuel.
But ethanol, as an additive to gasoline (to replace MTBE maybe ?), probably has a future. When that level of ethanol production is reached, there will likely be no new plants built.