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How Lower Fertilizer Prices Are Hurting Intrepid Potash

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Realized prices

Realized prices for fertilizer companies are the main culprit for the dismal performances among companies in the agricultural fertilizer sector (MOO). While the demand for fertilizer products remain strong, falling fertilizer prices have been negatively impacting the YoY (year-over-year) sales numbers for companies (MXI) like CF Industries (CF), CVR Partners (UAN), and Terra Nitrogen (TNH).

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Intrepid Potash’s realized prices

As you can see in the chart, realized prices for fertilizers have trended downward for Intrepid Potash. Its Potash segment has seen prices slope downward since 1Q12 (except for a momentary rise in 2014).

Prices for Trio, on the other hand, remained firm from 1Q12 to 3Q15. After that, Trio prices took a deep dive, following the trend of other fertilizers. Notably, you can track prices of fertilizers weekly at Market Realist, starting with the latest series, Fertilizer Price Update for the Week Ending June 23.

As the market absorbs excess capacity, it’s wait-and-watch time for fertilizer producers. Companies such as PotashCorp have moved to lower-cost facilities, while Intrepid Potash has transitioned to Trio.

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