Fertilizer Stocks Are Coming Back to Earth, Dragged Down by Falling Crop Prices
Falling crop prices are threatening what has been one of the surest bets in the stock market over the past two years.
Shares of fertilizer makers, including Mosaic Co. (US.MOS) and CF Industries Holdings Inc. (US.CF), have been dragged down in recent weeks by declining prices for corn, wheat and other crops. Though fertilizer stocks remain above where they traded before the pandemic, they have since spring shed much of their 2022 gains.
In mid-April, Mosaic and CF were up 99% and 55% for the year, respectively. Though they have tumbled since, they remain among the better performers in the S& P 500 this year. Mosaic has added 13%, and CF has gained 18% in 2022, compared with a 19% decline in the broader stock index.
Competitors Nutrien Ltd. (US.NTR), Corteva Inc. (US.CTVA) and CVR Partners LP (US.CVI) have traded in similar arcs.
Supplies of grains and fertilizer are low around the world and energy prices are high, which should keep food and fertilizer prices inflated through 2023, said Tracey Allen, commodity strategist at JPMorgan Chase & Co.
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