What’s the relationship between your company and ethanol?
“Ethanol is really the icing on the cake. Food demand comes first,” explains Doyle. “About 25% of our demand is now based on bio-fuels… (but that’s not) just corn in the Mid-West; it’s palm oil in Indonesia and sugar cane in Brazil.”
How much incremental yield does a farmer get out of an acre of corn if he or she uses Potash fertilizer?
“A farmer gets about a $3 return for every dollar he spends on our products,” says Doyle. (That’s for normal farmland in the Mid-west – that number comes down in a drought, but corn prices go up in a drought.)
What keeps you up at night as a risk?
(It doesn’t seem anything does.) “We think of ourselves as slow money,” says Doyle. “Since 1989 when we went public our total shareholder return is 2600%.”
But the bulk of that has happened in the last 5 years or so. Is that from globalization?
“Yes and some of the things we did (internally). We bought into other players around the world and that has a big impact on us too,” Doyle says.
Are you looking to buy anyone?
“We’re always looking,” replies Doyle.
“Agrium is a competitor. They’re in a slightly different business than we are. They’re focused on nitrogen and retail. We’re more focused on Potash,” he responds.
“Mosaic is another competitor. (They’re ) more of a phosphate orientation. The reason why we like Potash so much is because.. there are only 12 countries around the world who make it and 150 consuming it,” Doyle explains.
Might someone buy your company?
“You never worry about that,” replies Doyle. “Our stock trades 100% of the shares every day.”
Is China a concern?
“China is a big market for us. But China has been growing for a long time… since the late 70’s,” Doyle says. “A lot of people think China’s growth is a new thing. It isn’t.”
He adds “When you think about potash globally – we have 75% of all excess capacity in our company… we’re going to grow faster than anybody else.”
Dylan Ratigan asks the guys what they think of this stock?
All the traders like it. Eric Bolling calls it the consummate Ag play.
Got something to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to email@example.com.
Trader disclosure: On May 24, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders:
Najarian Owns (CLF), (EMC), (INSP), (KR); Bolling Owns (ICE),(NMX), Gold, Silver
CNBC Is A Service Of NBC Universal And Dow Jones