Red potash in a warehouse at Nutrien’s Cory potash mine near Saskatoon. The company's products extend across potash, nitrogen and phosphate produced in Canada and U.S.The Globe and Mail
When bad things happen in the world, you need a little fertilizer in your portfolio. That’s the takeaway from the latest rally by Nutrien Ltd. NTR-T, whose share price is on its second geopolitical-inspired rip within the past three years.
But will the current rally take the stock toward new heights?
Saskatoon-based Nutrien, the world’s largest fertilizer producer, emerged as one of the hottest Canadian stocks after Russia invaded Ukraine in 2022.
Trade restrictions and transportation bottlenecks turned a tight market for crop nutrients into a frantic one. That fattened the profit margins at Nutrien and drove its share price up – if only briefly – about 60 per cent in just over two months, to a high above $147.
Though now well off those peaks in 2022, the stock is moving again: It has rallied about 31 per cent so far in 2025, as of Thursday.
Much of this gain followed corporate cost savings, higher potash prices and upbeat spring planting activity. The price of corn, a key indicator of where fertilizer prices are headed, rallied about 25 per cent from October to February.
But Israel’s surprise attack against Iran, which began June 13 and has intensified this week with potential U.S. involvement, has added a geopolitical reason to the mix.
“In terms of how big a deal this is, this is enormous,” said Chris Lawson, head of fertilizers at CRU International Ltd., the Britain-based commodities consultancy, in an e-mail.
Iran has shut down its seven ammonia and urea production facilities. Israel has halted natural gas exports, which has forced Egypt to halt its urea production, which requires gas. And a potential blockade of the Strait of Hormuz, an essential sea passage for exports, would constrain supply even more.
Egypt and Iran were responsible for nearly 20 per cent of global urea trade last year, according to Mr. Lawson. But add other exporters that use the Strait of Hormuz, and the share of global urea exports now at risk rises to 40 per cent.
The old argument in favour of investing in fertilizer producers – at least long term – rested on rising demand for global food production and threatened arable land owing to urbanization and climate change.
The new argument could include global instability.
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Apart from the current problems in the Middle East, the European Union has proposed new tariffs on crop nutrients imported from Russia, a major supplier.
Joel Jackson, an analyst at BMO Capital Markets, noted that two nitrogen plants in Russia may have been hit by Ukrainian drones, halting production.
“So it’s not just one war, it’s two. And you’re not just impacting production, you’re impacting logistics,” Mr. Jackson said in an interview.
That should put Nutrien – whose products extend across potash, nitrogen and phosphate produced in Canada and the United States – in a good place.
Yes, the stock comes with a few risks.
Its gains this year have left some analysts cautious about whether the share price can move much higher.
The stock’s valuation is about midway between its historical five-year average, according to Steve Hansen, an analyst at Raymond James, meaning that it is by no means a screaming bargain.
As well, rival producers could take advantage of this year’s higher fertilizer prices by ramping up production, adding a point against the case for a looming supply crunch.
In any case, BHP Group Ltd.’s Jansen mine in Saskatchewan is expected to become operational next year, and will become one of the biggest sources of potash when fully operational.
And lastly, the price of corn has been declining since February, as Nutrien’s share price has risen. This decoupling is “a dynamic that’s rarely proven sustainable,” Mr. Hansen said in a note this week.
If that doesn’t make you nervous, then consider Nutrien’s volatile share price. From its high in 2022, it fell 33 per cent by the end of the year, and flirted with a four-year low last year, as fertilizer prices meandered at cheap levels.
Arriving late to a fertilizer rally or holding too long, in other words, can be painful.
Still, Nutrien’s share price is below highs reached during other rallies in recent years, and miles off its 2022 peak. That may give the stock some room to run.
If continuing conflict and logistical hurdles keep fertilizer prices elevated, skeptical long-term investors could return to Nutrien as a stable, homegrown commodity producer that can generate consistent profits – potentially increasing the stock’s valuation.
Think of it as a kind of safe-haven play: The worse the world gets, the better Nutrien looks.