Agrium (AGU) earned about 22% of its sales (including inter-segment eliminations) 15% of its gross profit from its Wholesale business. The company sells all three primary NPK (nitrogen, phosphorous, and potassium) fertilizers. Under the Wholesale segment, nitrogen fertilizers contributed about 41% to 3Q16 sales, while phosphate contributed about 26%, and potash contributed 17%. The remaining sales came from other blends and products for resale.
Wholesale shipments rise
Agrium’s (AGU) overall shipments from its Wholesale segment rose YoY (year-over-year), from 1.7 million metric tons in 3Q15 to 1.8 million metric tons in 3Q16. This rise represents a 7% growth in shipments, and most of this growth came from potash, which rose 29% YoY.
Potash shipments from North America and international markets rose during the quarter by 35% and 26%, respectively. Phosphate shipments rose 3% to 278,000 tons from 269,000 tons.
By contrast, the segment’s nitrogen shipments in 3Q16 rose 3% to 739,000 tons, down from 760,000 tons in 3Q15. This decline in shipment volume primarily came from urea and ammonia products. Ammonia shipments fell 5% YoY to 207,000 tons from 219,000 tons, while urea shipments fell 5% YoY to 359,000 tons from 378,000 tons.
By contrast, the segment’s other products shipments rose 6% to 173,000 tons from 163,000 tons in 3Q16.
Nitrogen players (IYM) CF Industries (CF), PotashCorp (POT), and CVR Partners (UAN) are under a constant threat from Chinese manufacturers, but both PotashCorp and CF Industries saw rises in nitrogen shipments during in 3Q16.
In the next part, we’ll cover average realized prices for Agrium’s Wholesale segment.