potashcompaniesblastingoff

The Mosaic Company (MOS) reported blowout earnings on April 4 due to strong demand from farmers
for their agriculture fertilizer products. Earnings increased twelve-fold from the same quarter of last year
with the company also increasing its gross margin to 33.9% of net sales from the previous year's gross
margin of 8.8%. The market was quite pleased with this and subsequently pushed Mosaic's share price
up 20% to new all-time highs.

Looking forward at the earnings calendar, we see that Potash Corporation of Saskatchewan (POT) will
be reporting before the market open on Thursday April 24. Also reporting on that date before the
market open will be Terra Industries (TRA) which holds a 75% stake in Terra Nitrogen Company, LP
(TNH). One would expect that both companies will deliver strong earnings reports and that Potash Corp.
could surprise the market a bit more to the upside than Mosaic if they began selling some of their extra
capacity they had begun to hold off of the market last year due to supply constraints related with the
'Russian Sinkhole'. Potash Corp. is the Saudi Arabia of the potash industry as they possess the unique
ability to add capacity quicker than any of the other potash companies in the world at this moment.
Currently they have plans in place to spend two billion dollars to add capacity over the next few years
and cement their status as the world's dominate potash supplier.

Also of interest to investors is the fact that Canpotex Limited, an export company owned equally by all
three big potash producers in Saskatchewan (Potash Corp. of Saskatchewan, The Mosaic Co. and
Agrium Inc.), and its Russian counterpart have been signing ever more profitable contracts abroad with
the likes of India, China and Brazil. As the world rushes to grow more food due to the U.S.'s insistence
on burning corn for gas rather than feeding the world, more and more fertilizers will be needed to
increase crop yields of such crops as corn, soybeans and wheat. As mentioned in previous articles, all
three of these crops use their fair share of potash, so it is logical to believe that as the world plants more
of these crops that they will also consume more fertilizers.

In the potash industry today investors are faced with two options when picking out a suitable investment:
purchasing shares in a current producer or shares in an explorer. There are currently three large
producers of potash which derive large percentages of their revenue and profits from it. They are
Potash Corp. of Saskatchewan, The Mosaic Co. and Agrium Inc., and all possess mines in Canada's
prolific province of Saskatchewan. Coming to market soon via an IPO in the United States will be Intrepid
Potash, which mines its potash in the Western United States (two mines in Utah and one in New Mexico).
Other options include CF Industries (CF), Terra Industries (TRA) and Terra Nitrogen Company, LP
(TNH). Terra Nitrogen pays rich dividends- one that will be lower next year- and requires one to spend a
bit more time on their tax return due to the unique nature surrounding how its payouts are accounted for
under U.S. tax code.