Average selling price
Previously in this series, we saw that shipments for Agrium’s (AGU) Wholesale segment have increased YoY (year-over-year). Let’s look at the pricing environment for the segment in this part.
Overall average selling prices for Agrium’s Wholesale segment have declined YoY (year-over-year) from $449 per ton to $387 per ton. Prices for potash have been hurt the most, declining from $482 per ton to $267 per ton YoY. Nitrogen fertilizer prices have also declined over the same period from $459 per ton to $403 per ton. Amid this weakening fertilizer price environment, phosphate prices declined only 7% YoY to $610 per ton in 4Q15 from $656 per ton in 4Q14.
An alternative way of investing in Agrium can be through the VanEck Vectors Agribusiness (MOO) ETF, which invests 3.8% of its holdings in the company. MOO also holds 6.8% of Deere & Company (DE), 2.51% of the Mosaic Company (MOS), and 7.7% of Monsanto (MON) in its portfolio.
Recently, the Potash Corporation released its 4Q15 earnings in which it announced a cut in dividends, which resulted from the weak potash pricing environment. To learn more, you may read Sufferin’ Potash! Your Key to PotashCorp’s 4Q15 Earnings. It may not be surprising to see companies like the Mosaic Company (MOS) and Intrepid Potash (IPI), which also have potash fertilizer segments, would also be impacted.
Read on to learn how Agrium’s Wholesale segment’s gross margins performed during 4Q15.