I recently wrote about El Niño and what it could mean for agricultural markets going into 2027.
The part I find most interesting from a value-investing perspective is fertilizer stocks.
Global food inventories are still relatively healthy, so I’m not predicting a global food shortage. But El Niño could hurt harvests in several regions at the same time fertilizer supply remains tight and production costs stay elevated.
That combination could support higher fertilizer prices and, potentially, much stronger earnings for producers.
What makes the sector interesting is that many fertilizer stocks are still priced as if current earnings will normalize quickly. If fertilizer prices stay higher for longer because of weather disruptions, supply constraints and continued demand from farmers, there could be significant value in the sector.
In other words, you don’t necessarily need a food crisis. Even a tighter agricultural market could be enough for fertilizer stocks to move materially higher.
I wrote the full analysis myself.
Curious which fertilizer stocks people here currently see as undervalued?
