You may not like Vladimir Putin or the Russian government, but we all have to eat. That is the core of the argument for investing in a new type of Russian natural-resource company on the world stage: potash and phosphate producers such as Uralkali.
Fertilizer stocks remain a cult on Wall Street as a way to get exposure to the theoretically unlimited upside potential of the agricultural business. After all, everyone needs to eat, and we trade what we know, right?
The biggest potash supplier in the euro zone is forecasting only a marginal dip in profitability this year and then sees the fertilizer boom picking right up where it left off by 2013. And the stock has gone berserk.
And they said it couldn’t be done: a $20 billion a year tax credit for ethanol has ended in the United States. Sometimes the American political system does work, even when losing the subsidy directly hurts Iowa farmers in an election year.
Tomorrow they will be talking a lot about La Nina and whether China has leaned too far in the direction of corn to grow enough soy. The entire agricultural group could be in play depending on how the numbers stack up.