That fever I told you about? The world's farmers have still got it.
I'm talking about the demand for fertilizer, and potash in particular. Unlike a certain unfortunate footwear maker, this is no fad, Fools.
Farmers are suddenly flush, and as long as they keep getting strong prices for their products, they have an incentive to increase plantings. Fertilizer is a small part of the overall cost of farming, and it provides a lot of bang for the buck. Yara International, the Nokia
The crazy thing is that realized potash prices in the quarter, at a little over $400 per metric ton, were a mere fraction of where prices stand today. In April, after a drawn-out negotiation, China signed on for a $400 per ton increase. There's simply much more cash to be made in potash. The supply constraints are just that substantial.
I used to think that the valuations on guys like PotashCorp and Mosaic