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| By Tony Sagami |
Spring is right around the corner, with the spring equinox arriving Sunday.
It reminds me of how — as the son of a vegetable farmer — I have always been acutely aware of seasons.
Spring brought a mixture of blessings and curses.
Spring meant baseball, and my family loved baseball.
All of us — especially my father and sister — were darn good baseball players. My Uncle Waka was one of the first Japanese Americans to play professional baseball in the United States.
However, spring also meant planting season, extra chores, homework and weekends full of long hours.
One of my earliest spring memories of the farm was picking rocks out of the fringes of the farm.
I spent hundreds — maybe thousands — of hours on my hands and knees picking up stupid rocks when I was in grade school.
As I grew older, I started to help with de-winterizing farm implements, tilling the soil, spreading fertilizer and of course plantings.
Another spring event I could count on like clockwork was seeing my father in a suit. My father was deeply religious, but he only went to church twice a year: Christmas and Easter.
It wasn't that he lacked faith; there was just too much farm work that needed to be done to feed his family of five.
My father wore dungarees and threadbare flannel shirts 363 out of the 365 days a year, but he proudly wore his only suit when he went to church.
My siblings and I hardly recognized him in that suit, but we knew it meant it was an important occasion when he put it on.
Taking the Church Suit out of the Closet
I distinctly remember one spring when I was eight or nine years old. I saw my father in his suit, but it wasn't Easter, and it definitely wasn't Christmas.
"Why are you dressed up, Daddy?" I asked.
He said he was going to the bank.
The bank?
Almost every spring, my father would shave, dab some Vitalis in his hair, put on his church suit and go to our local bank to ask for a loan to buy seed, fertilizer and fuel.
Honestly, farming doesn't pay much, and my father struggled with the negative cash flow between spring planting and summer harvests.
But if the weather and crop prices cooperated, he would return proudly in the fall to pay back the loan in full.
If not, he'd ask for an extension, with his head hanging in shame.
Unfortunately, bad summers seemed to outnumber the good ones, so my father never made a lot of money. Making ends meet was always a struggle.
That would have been especially true this past year.
- Have you looked at the skyrocketing price of fertilizer?
The spring planting season is just weeks away and my father would be outraged.
The price for potash/urea has jumped by 215%, liquid nitrogen by 290%, phosphate by 171% and anhydrous ammonia by 315%
Fertilizer prices are headed even higher.
- Russia is a huge exporter of every major kind of crop nutrient and the trade sanctions the U.S. just imposed will drive prices higher.
A trio of companies control 90% of the fertilizer market in the United States: CF Industries (CF), The Mosaic Company (MOS) and Nutrien (NTR).
Here's a one-year chart of all three:
Those year-over-year gains are eye-popping!
- All three receive a Weiss Rating of "B" and I believe all of them will make mountains of money in the upcoming year.
Another thing that looks very possible in coming years? A roller coaster ride through hell.
Cycles expert Sean Brodrick didn't mince words when I asked him what investors can expect in the next two years.
Inflation, out of control money printing, soaring debt and war … it's all linked to powerful, unstoppable cycles of history converging at this very moment.
"It's a nightmare that keeps me up at night," says Sean. "This is going to be a rollercoaster ride through hell."
The changes that are coming will accelerate dramatically now through 2024. There is a narrow window of time to protect yourself and your wealth before everything about the way we live, save and invest is disrupted.
Unfortunately for farmers, I don't expect the price of fertilizer to stabilize any time soon. But in the meantime, investors should consider using these trends to their advantage by adding some fertilizer exposure.
I am sad to say my father died in 2009 at the ripe old age of 93. He never made a lot of money … but he lived a long, healthy and admirable life. He saw all three of his children become successful professionals.
My career was always a mystery to him though. He said my hands were as smooth as a woman's and he never owned a share of stock in his life. Whatever money he saved always went into his bank account.
But he was madly proud of his three children, and I will forever thank him for working us like dogs on the family farm.
That hard work made us who we are today.
Best wishes,
Tony
