The fertilizer industry is well positioned to capitalize on rising food prices. That is why domestic fertilizer companies Scotts Miracle-Gro (SMG) and Mosaic (MOS) are increasing their production. But let’s find out which of these two stocks is a better buy now.The Scotts Miracle-Gro Company (NYSE:SMG) manufactures, markets and sells branded consumer lawn and garden care products worldwide. The company operates through three segments—U.S. Consumer, Hawthorne and Other. In addition, it offers hydroponic products and lighting components that help in growing plants and vegetables indoors, using little or no soil. It serves home and garden centers, nurseries, large hardware chains, e-commerce platforms, and food and drug stores.
The Mosaic Company (NYSE:MOS) produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments—Phosphates, Potash, and Mosaic Fertilizantes. In addition, it provides nitrogen-based crop nutrients and animal feed ingredients, and other ancillary services. MOS sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts.
The huge rise in food consumption during the COVID-19 pandemic has benefited the fertilizers industry, resulting in record net sales last year. However, the high demand for fertilizers to get good crop yields had caused a shortage in the supply of potash and phosphate, two major components used in producing fertilizers, leading to a rise in their prices.