Analysts See Potash Prices Continuing To Rise

Two separate Wall Street reports could give fertilizer producers a boost for the remainder of the year. Both Citigroup and Barron's have raised price targets on the sector citing strong short term and long term fundamentals. Citigroup upgraded both top producers Mosaic (NYSE: MOS) and Potash Corp. of Saskatchewan (NYSE: POT) to buy, citing strong long term global agricultural needs as well as reduced Chinese exports of fertilizer. Barron's upgrade, cited depleted inventories and consolidation among Russian producers as bullish catalysts for the sector. Along with growing global populations, fertilizer prices are seeing new highs. The average U.S. farm price of fertilizers has soared over the past 12 months and has exceeded record highs set in 2008. USDA data shows that price for fertilizers have surpassed the rate of income increases farmers have experienced over the past two decades. As the world continues to grow, the task of feeding all of those people will be immense. With many fertilizer and potash companies owning virtual monopolies on their assets, their long term growth is assured. For investors, adding a dose of the fertilizer miners seems a prudent long term bet. Both the previously mentioned Mosaic and Potash make ideal choices. For investors preferring a broad approach, the new Global X Fertilizers/Potash ETF (NYSE: SOIL) follows a global basket of companies related to the sector.