The writers over at Seeking Alpha presented an interesting article on March 11th about the upcoming fertilizer (namely Potash) trading market.

A few of the interesting points are;

… farmers typically have a large stockpile of potash on hand, and not buying on a regular basis causes them to use up what they have

The writer goes on to say that this factor will essentially force farmers large and small to re-up their supply of Potash fertilizer. Here’s another quote from the article;

The problem facing the three companies mentioned above is that several big financially strapped potash producers in Russia have dropped prices 25%

Here’s the rub. So when farmer’s go to replenish their supply of Potash they now have a bargaining chip with the big three Potash producers, namely supply us our fert at a lower price or we’ll walk. Now this can be the case for smaller users of Potash but many, if not most, of the large farming corporations entered into short to medium term Potash contracts at set prices and quantities. Now coming out of this market we’re likely to see some lower pricing models but of course by that time Russia may raise their prices back up and in turn negate any of the current leverage that smaller farmer’s hold

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