The global agricultural market could expand to US$15.5 trillion this year, with a compound annual growth rate (CAGR) of 7.9% from 2024. According to the Business Research Company, the growth drivers include population growth, trade globalization, government policies, and crop protection products.
Nutrien (TSX:NTR), one of the world’s largest fertilizer producers, says the tariff war disrupts agricultural trade. Tariffs will increase farmers’ costs, especially in the United States. Nonetheless, this Canadian stock is a buying opportunity despite the tariff turmoil.
At $80.93 per share, current investors enjoy a +27.2% year-to-date gain and partake in the 3.71% dividend. Also, the materials sector, where this large-cap stock belongs, is the top performer (+18.37%) among the TSX’s 11 primary sectors thus far in 2025.
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Advantageous position
Saskatoon-based Nutrien provides crop inputs and services globally. The $39.45 billion company produces potash, nitrogen fertilizer, and phosphate. The world-class production, distribution, and agriculture (ag) retail facility network gives Nutrien an advantageous position across the ag value chain. It’s also the key differentiator versus competitors.
Nutrien’s retail operations in seven countries serve growers. The retail business, or downstream network, delivers agronomic advice, seed, crop nutrition, and crop protection. It also provides financial services to farmers. The potash (six mines), nitrogen (13 production facilities), and phosphate (six production facilities) businesses form the upstream network.
All agricultural solutions aim to maximize yields and improve profits. Nutrien’s upstream fertilizer manufacturing assets in North America have access to high-quality resources, lower-cost inputs, and an extensive midstream distribution network to ensure efficient supply. However, the retail business serves or focuses on farmers in key agricultural markets in North America, South America, and Australia.
Earnings profile
According to management, the diversified business enhances Nutrien’s earnings profile. The downstream network provides greater stability to the earnings base and counter-cyclical cash flow. Its low-cost upstream fertilizer production assets are well-positioned to generate significant cash flow for future investments or business growth.
Despite the $19 million net earnings in the first quarter (Q1) of 2025 compared to $165 million in Q1 2024, Ken Seitz, president and CEO of Nutrien, is confident the business has tremendous potential to create long-term shareholder value. “Global fertilizer market fundamentals have strengthened, supported by growing demand and tight supplies, providing a positive outlook for our business in 2025,” he said.
Seitz added, “Our world-class asset base and resilient business is built to generate free cash flow (FCF) in a range of market conditions.” The ongoing concerns are prioritizing high-value investment opportunities, divesting non-core assets, and returning cash to shareholders.
Feeding the future
Nutrien’s vision is to be the leading global agricultural solutions provider. Management has a set of targeted growth investments with relatively low execution risk. It includes investments in its proprietary products business, retail network optimization, nitrogen debottleneck projects, and automation of the potash mine.
The built-in competitive advantages will enable Nutrien to move forward with its central theme, “Feeding the Future.” Moreover, the stock’s performance, notwithstanding the earnings drop, is proof of investors’ confidence in the ag-crop nutrient business and its long-term viability.
