Food prices have been rising. The price change has been significant enough to create difficulties in emerging markets. Some countries have had demonstrations and riots. There are several reasons for the increase in food prices:

• Emerging markets such as China and India have a new middle class.

• With increased industrialization, people move from rural to urban areas.

• Increased wages are first spent on a better diet.

• An increase in meat consumption versus a grains-based diet creates more demand for food.

• It takes significantly more to feed animals that go to slaughter as opposed to crops going straight to the dinner table.

• Biofuels also have increased consumption.

• Mandates for ethanol production from corn and biodiesel from soybeans have tightened supply and demand.

• Very few countries have additional acres to convert to farmland. This creates problems as industrial growth creates demand for residential and commercial property.

• As the world population increases, the total amount of farmland will continue to decrease.

• The only way to increase the amount of food is to increase yield.

Since much of the world under-applies fertilizer, it creates an interesting scenario.

Fertilizer is composed of three key nutrients. Potash is mined and is primarily used as a crop nutrient. Its potassium strengthens plant stalks and roots. Potassium also helps plants fight disease and injury, while improving yields. It also improves color, flavor and texture. Phosphate is made from ancient marine fossils. It is used in fertilizer, feed and industrial products. Phosphate aids in photosynthesis, cell division, crop maturity and yields. When used as a feed supplement, it aids in skeletal development and animal muscular repair. Nitrogen occurs naturally in the air, but has to be converted for use in agriculture. Nitrogen increases crop yield, and plant growth. It is responsible for how green a plant is.

There are several reasons to be bullish fertilizer and the companies that produce it.

….see the reasons, the stock recommendations and read more HERE