Fertilizer prices are soaring and that’s sending the stocks of companies that make crop food skyrocketing as well.
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The stock of CF Industries (CF), a leading U.S. fertilizer producer, is up 48% year-to-date. Canada’s Nutrien (TSE:$NTR), the world’s largest fertilizer maker, has seen its share price jump 15% since the war in Iran started on Feb. 28, disrupting global supplies in the process.
While rising stocks of crude oil companies have gotten all the attention, fertilizer stocks have been running higher right alongside them. This as fertilizer products jump as much as 50% in some markets due to the conflict in the Middle East.
Soaring Fertilizer Prices
Oxford Economics says that urea and ammonia prices, two key ingredients in farm fertilizer, have surged by 50% and 20%, respectively, since the Iran war began. Other fertilizers, such as potash and sulfur, have also risen dramatically over the past six weeks.
The current situation is bad news for farmers as they prepare for the spring planting season. And the United Nations (U.N.) has warned about increased prices being passed down to consumers, as well as rising food insecurity around the world. Still, the difficult situation is proving to be a boon to fertilizer stocks.
Is CF Stock a Buy?
CF Industries stock has a consensus Hold rating among 13 Wall Street analysts. That rating is based on three Buy and seven Hold recommendations issued in the last three months. The average CF price target of $117.55 implies 0.52% downside from current levels.
