Nutrien, the top potash producer, reported lower-than-expected first-quarter profit on Wednesday. The company was impacted by lower prices and higher energy costs, which resulted in a decline in adjusted core profit for the quarter.
Trade tensions between the United States and China, as a result of President Donald Trump’s tariffs, have caused volatility in crop prices. Farmers have been cutting costs, leading to a decrease in demand for fertilizers. Nutrien’s quarterly net selling price for potash in North America fell by 21.6% from the previous year to $243 per tonne.
The nitrogen segment also faced challenges with higher energy costs, which increased the cost of goods sold by about 10% to $663 million. This led to a 12% decrease in adjusted core profit for the segment.
Rising natural gas prices have further added to Nutrien’s challenges. The average natural gas prices hit a two-year high on March 10, impacting the company’s costs.
Additionally, delayed field activity due to wet weather conditions in North America and strategic actions in South America also affected Nutrien’s quarterly earnings. The company’s sales for crop nutrients and crop protection products were down 8.7% and 12.7% respectively.
Earlier this year, Nutrien’s Brazilian unit announced plans to sell its fertilizer blending plants in the country. The company is shifting its focus to reselling farm inputs through local retailers after its previous acquisitions and investments did not meet expectations.
In the first quarter, Nutrien posted an adjusted profit of 11 cents per share, falling short of analysts’ average estimate of 31 cents per share.
Despite the challenges faced in the first quarter, Nutrien remains a key player in the agricultural industry. The company continues to adapt to market conditions and implement strategic decisions to drive growth and profitability in the future.
The article was originally reported by Tanay Dhumal and edited by Leroy Leo.
