Fertilizer prices keep climbing due to an unprecedented supply crunch, which shows no signs of abating anytime soon. Given this backdrop, we think it could be wise to bet on fundamentally sound fertilizer stocks Nutrien (NYSE:NTR), The Mosaic (MOS), and Intrepid Potash (NYSE:IPI). Read on.Soaring fertilizer prices have been worrying farmers. The Green Markets North American Fertilizer Price Index increased by 4.4% to hit $1,094.35 per short ton on November 12, 2021, surpassing the $1,048.23 per short ton previous high set the week before. Farmers are unable and unwilling to soak up the price hikes as they set their sights on shifting to other less fertilizer-intensive crops.
Meanwhile, natural gas prices in Europe and Asia have skyrocketed to record highs due to low storage levels and supply constraints. This is contributing to increasing fertilizer prices. Natural gas is a necessary raw material for making nitrogen fertilizers like ammonia, urea, and nitrates. In addition, China has restricted its fertilizer exports until June 2022 to maintain domestic availability. So, fertilizer prices are expected to remain high amid demand-supply imbalances.
Therefore, we think it could be wise to scoop up quality fertilizer stocks Nutrien Ltd. (NTR), The Mosaic Company (NYSE:MOS), and Intrepid Potash, Inc. (IPI) to capitalize on the rising fertilizer prices due to the supply constraints.