There is so much fertilizer news flying around that a simple update on the fortunes of Agrium (NYSE:AGU) has morphed into a full-blown Potashapalooza. Let's get started.

Agrium, a knight of nitrogen, is the largest fertilizer retailer in the United States. The company is pulling down such premium prices for its products that it just vaulted its quarterly earnings guidance to $2.80-$3.00 per share. The prior forecast was $1.92-$2.22, so at the midpoint of each range, we're talking about a 40% hike. No wonder shares are blasting higher today.

Also interesting is that Agrium is angling to build a new potash mine. These are mammoth construction endeavors, and Agrium would only get a new mine into production by 2014 at the earliest. While Potash Corp. of Saskatchewan (NYSE:POT) is as bullish on the nutrient as anyone, that company's CEO recently noted that the economics don't justify new mine construction. Expansions such as the 50% capacity increase being undertaken by Mosaic (NYSE:MOS) are at a decided cost advantage.

That splash of cold water has done nothing to cool the speculative fervor for new sources of fertilizer supply. Exhibit A: a Canadian micro cap that exploded 670% in a single session on news that the firm secured two permits to explore for potash in Saskatchewan. And I thought Intrepid Potash (NYSE:IPI) was overpriced!

The mania extends further. There's Potash One, another Canadian junior looking to secure financing for an estimated $1.5 billion mine plan. Additionally, multiple exploration outfits are turning to new frontiers like Newfoundland in the hopes of uncovering the next potash prize.

As with every bubble, there's a terrifically good story underlying the run-up in potash and other crop nutrient suppliers. Fertilizer appears to be getting frothy, so tread carefully, Fools.

Agrium is rated five stars in Motley Fool CAPS. Think the party's just getting started? Rate the firm outperform right here.

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