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Investing Specialists

The Saudi Arabia of Fertilizer?

We dig into one of our favorite agriculture firms.

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In the past several issues of StockInvestor, I have discussed agriculture and fertilizer, areas that have seen a dramatic increase in prices (and profits) in recent years. After taking a closer look at the industry, we decided to upgrade the moat rating of  Potash Corporation of Saskatchewan (POT). I sat down to talk about the company with Ben Johnson, who has covered the industry for about two years. (For more on Potash Corp., see my recent video report.)

Paul Larson: Ben, set the stage for us. How does Potash Corp. (PCS) make money?

Ben Johnson: Potash Corp. is the world's largest fertilizer producer. It produces all three of the essential plant macronutrients: nitrogen, phosphate, and potash. The bulk of the firm's production is sold into the fertilizer market, while the remainder is sold for use in animal feed and various industrial (mostly food-related) applications. PCS sells its products in more than 50 countries worldwide, and in 2007, about 30% of the company's sales were to customers outside of North America.

Paul Larson has a position in the following securities mentioned above: CMP, MOS. Find out about Morningstar’s editorial policies.