Nutrien Ltd. (NTR) is a Canadian fertilizer company. It was formed in 2018 through the merger of PotashCorp and Agrium. Nutrien is the world’s largest producer of potash and the third largest producer of nitrogen fertilizer. It has over 2,000 retail locations across North America, South America, and Australia with more than 23,500 employees. Nutrien’s products are used by farmers to grow crops. The company’s potash is used to improve crop yields, while its nitrogen fertilizer is used to increase crop quality. Nutrien also produces phosphate fertilizer, which is used to improve crop nutrient uptake.
Nutrien operates through four main business segments:
- Retail: Nutrien’s retail business provides crop inputs and services directly to farmers through a vast network of retail outlets. The company offers crop nutrients, such as nitrogen, phosphate, and potash fertilizers, as well as crop protection products, including herbicides, insecticides, and fungicides. Nutrien also provides seeds, equipment, and other agricultural services to help farmers improve crop yields and sustainability.
- Potash: Nutrien is one of the world’s largest producers of potash, a vital crop nutrient that improves water retention, yield, and nutrient value in plants. The company operates potash mines and production facilities in Canada and has a strong global distribution network.
- Nitrogen: Nutrien is a significant producer of nitrogen fertilizers, which are essential for plant growth and development. The company operates nitrogen production facilities in Canada, the United States, and Trinidad. Nutrien produces and distributes ammonia, urea, and other nitrogen-based products to agricultural and industrial customers.
- Phosphate: Nutrien also produces phosphate fertilizers, which are important for root development and energy transfer in plants. The company has phosphate production assets in the United States and operations in Latin America.
Nutrien’s primary focus is on supporting global food production by providing essential agricultural inputs and services to farmers. The company aims to help increase crop yields sustainably, promote environmental stewardship, and contribute to a more secure global food supply.
as of April 5, 2023
The largest company in the Agricultural Inputs segment of Basic Materials and still undervalued. A continued focus on M&A will likely push the top and bottom line higher in the next decade. Right now the market prices NTR at just about 8x forward earnings, where the sector median is 14x earnings. Do we need potash and other inputs? Sure. These inputs play a vital role in modern agriculture, and their efficient management is essential for sustainable farming practices. Agricultural inputs must be carefully managed to maximize productivity while minimizing environmental impacts. Overuse or improper use of certain inputs, like chemical fertilizers and pesticides, can lead to soil degradation, water pollution, and the development of resistant pests. So, there are some risks legally and socially that may not be fully accounted for at the moment. That said, if the company can continue to grow sales and profit the stock should follow.
