Tailwinds Into 2013 for Fertilizer Producers?

Companies that produce nitrogen-based fertilizers experienced a tough third quarter this year, after the record droughts plagued the Midwest and imports challenged domestic companies in the urea and ammonium nitrate market. The downward pressure affected both CF Industries (NYSE: CF  ) and its subsidiary Terra Nitrogen (NYSE: TNH  ) over the past three months, leading to decreases in year-over-year revenue for both companies. Thankfully, lower natural gas prices than a year ago propped up margins, leading to positive earnings growth.

Moving forward, though, CF management believes the industry could be in for a nice ride through 2013. Because of the drought, it's likely that corn demand will be much higher this year, as inventories were depleted to meet demand this summer. Those in the know also predict low domestic supply of the nitrogen necessary for fertilizer production. If these two situations play out, look for CF and Terra Nitrogen to benefit, along with larger competitors such as Agrium (NYSE: AGU  ) and PotashCorp (NYSE: POT  ) .

See more in the following video.

Low natural gas prices can have the reverse effect on companies in other energy industries. Investors in SandRidge were startled after its shares plummeted when natural gas prices reached 10-year lows, but with the company halfway through its ambitious three-year plan to profitability, the future looks bright. If you're unsure about the future of this emerging oil and gas junior and are looking to find out more about its strengths and weaknesses, you should view this brand-new premium report detailing SandRidge's game plan and what to expect from the company going forward. To get started, click here!


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2099173, ~/Articles/ArticleHandler.aspx, 8/29/2014 10:14:59 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 17,069.68 -9.89 -0.06%
S&P 500 1,997.51 0.77 0.04%
NASD 4,563.03 5.34 0.12%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/29/2014 9:36 AM
TNH $150.00 Up +1.10 +0.74%
Terra Nitrogen Com… CAPS Rating: *****
AGU $94.33 Down -0.53 -0.56%
Agrium, Inc. (USA) CAPS Rating: *****
CF $258.18 Down -2.07 -0.80%
CF Industries Hold… CAPS Rating: ****
POT $35.32 Up +0.02 +0.06%
PotashCorp CAPS Rating: ****
SD $5.25 Up +0.01 +0.10%
SandRidge Energy CAPS Rating: ****

Advertisement