CALGARY — Saskatoon-based fertilizer giant Nutrien Ltd. surged to all-time high profits in the first six months of 2022 as the war in Ukraine destabilized agriculture markets and heightened global food security fears.
The Canadian company, which is the largest fertilizer producer in the world, raked in US$5 billion in profits in the first half of the year as crop input prices soared to multi-year highs.
For the three months ended June 30, Nutrien’s net profit increased 224 per cent to US$3.6 billion. (The company said its earnings for the second quarter were affected by a non-cash impairment reversal related to its phosphate operations of US$450 million.)
On Wednesday, the company revised its full-year earnings guidance for 2022 to between US$14 billion and US$15.5 billion, down from a previously forecast US$14.5 billion to US$16.5 billion, due to lower nitrogen pricing and higher natural gas costs.
However, in spite of the slightly lower outlook, interim CEO Ken Seitz told analysts on a conference call Thursday that the ripple effects of the conflict in eastern Europe will continue to drive demand for Nutrien products for many years.
“We believe structural changes to global energy, agriculture and fertilizer markets will provide a support environment for Nutrien well beyond 2022,” Seitz said.
Record high temperatures in Europe this summer have reduced summer crop yields, Seitz said. While crop commodity prices have been affected over the past month by broader market volatility, they are still 25 to 35 per cent above the 10-year average, he said.
While the recent deal to reopen Ukrainian wheat exports through the Black Sea would be a positive development for global food security if there is a sustained increase to shipments, Seitz said, it won’t be enough to stabilize global agriculture markets.
“Analysts believe volumes will continue to be challenged by labor and logistical constraints in addition to ongoing military strikes in the region,” he added. “Ukraine’s grain production and export levels are projected to be down dramatically compared to 2021, leaving little buffer for any supply issues in other regions this growing season.”
In June, Nutrien announced plans to increase its potash production capacity to 18 million tonnes per year by 2025, a 40 per cent increase over 2020 levels, to meet rising global demand.
Seitz told analysts Wednesday that potash shipments from Russia and Belarus were down an estimated 25 per cent and 50 per cent, respectively, in the first half of 2022. While Russian potash exports are not currently sanctioned, they have been impacted by restrictions on financing activities that facilitate exports.
“The impact of sanctions on Belarus supply has been more significant due to the loss of access to tidewater through Lithuania,” Seitz said.
Nutrien’s potash sales volumes for the three months ended June 30 were 3.7 million tonnes, a second-quarter record high.
Nutrien, which was created in 2018 as a result of the merger between PotashCorp of Saskatchewan and Calgary-based Agrium Inc., has six potash mines in Saskatchewan and two large phosphate mines in the U.S. It is also the world’s third-largest producer of nitrogen. (Potash, phosphate and nitrogen are the three main plant nutrients used in commercial fertilizer.)
The company exports its products around the world, with Brazil, China, India, Indonesia and Malaysia accounting for 70 per cent of its offshore sales.
This report by The Canadian Press was first published Aug. 4, 2022.
Companies in this story: (TSX:NTR)
Amanda Stephenson, The Canadian Press
Red Deer South MLA lambastes Premier Kenney for weighing in on the race to replace him
Article submitted by Red Deer South MLA Jason Stephan
Kenney, the time for you to be quiet is now
When you are a departing leader of a political party, one of your responsibilities is to build unity. One way of doing so is to stay out of the leadership race to replace you. Jason Kenney promised he was not going to be a “color commentator” in the race, and then proceeded to become one. Kenney misrepresented a platform commitment of Danielle Smith —a leading candidate—sowing division and creating disunity.
While misrepresenting the ideas of others and then attacking the straw men manufactured out of the misrepresentation may be standard practice in a junior high school debate, it’s dishonest and disrespectful.
Kenney called the Alberta Sovereignty Act “nuts” and “nuttier than a squirrel turd”. Is that going to produce unity? In his leadership review, when he called those who disagreed with him “bugs”, “kooks” and “lunatics”, how did that work out
Kenney says the Sovereignty Act would make Alberta the “laughingstock” of Canada. Perhaps we already are.
When Albertans held a provincial referendum and rejected equalization, who did Trudeau appoint as environment minister? He chose Steven Guilbeault, the Greenpeace activist, arrested for climbing on Ralph Klein’s roof when he was away, frightening Klein’s wife who was home alone. I bet Trudeau thought that was funny.
What does Trudeau do with Kenney’s sternly worded letters? Perhaps they are trophies he hangs on the walls.
The premier of Quebec said one of his favorite things about Canada is equalization, so what progress has Kenney made on equalization? None.
The Sovereignty Act seeks to do what Quebec does. Is Quebec a laughingstock?
Kenney says the Sovereignty Act would be a “body blow” to Alberta jobs and the economy and “draw massive investment away”. Isn’t that going to be the result of Trudeau’s new “discussion paper?”
This paper was released in August with a submission deadline in September. It proposes either a new cap-and-trade or carbon tax only on oil and gas development, disproportionately punishing Alberta while sparing Quebec and other provinces that Trudeau bribes for power.
Kenney should consider stopping his straw man attacks and start focusing on Ottawa where he came from. No straw man is required as Ottawa is already responsible for driving away hundreds of billions in investment out of Alberta and thousands of Alberta jobs with it along with more “body blows” to come if we get this imminent new cap and trade or new carbon tax imposed on our natural resources.
Is Kenney working on his latest sternly worded letter?
But wait, under section 92A of Canada’s constitution, isn’t Alberta supposed to have jurisdiction over the development of our natural resources? Isn’t Trudeau again seeking to do indirectly what he cannot do directly? Isn’t this a sneaky,
backdoor, constitutional trojan horse? Isn’t this what the Sovereignty Act is intended to address, to assert constitutional boundaries that Ottawa continually seeks to circumvent, trespass, attack and undermine? When Ottawa abuses its
power, isn’t the Sovereignty Act to be a check and balance?
Yes, a good idea, improperly applied can be detrimental, and if that is the version that Kenney wants to manufacture, attack, and fearmonger, that is his choice.
Properly applied the Sovereignty Act will benefit Alberta, counteracting the commercial uncertainty and chaos from Ottawa by asserting the constitutional boundaries that Ottawa habitually disrespects, seeking to undermine and intrude into
Alberta’s constitutional jurisdiction to develop its oil and gas resources.
Kenney says the Sovereignty Act does not respect the rule of law.
Properly applied the Sovereignty Act supports the rule of law as it asserts Alberta’s constitutional jurisdictions and resists abuses of power emanating out of Ottawa.
Kenney says he “isn’t really following the leadership race”. He is.
Kenney started saying he does not know which candidates are supporting the Sovereignty Act. He knows.
He also knew the deadline for members to participate in the leadership race had ended the day before he chose to improperly misrepresent a platform policy of a leading candidate who is not part of his inner circle.
Great leaders speak the truth in love inspiring the best in those they serve. They do not fearmonger, they do not call names, they do not misrepresent others’ ideas and then attack the straw men they manufactured with their misrepresentations.
It is disappointing to see Kenney failing in his responsibility to build unity. I have faith his successor will do better.
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