SOURCE: AXcess News

April 24, 2008 17:10 ET

AXcess News: Fertilizer Makers Report Strong Growth

CARSON CITY, NV--(Marketwire - April 24, 2008) - From Big Board stocks to Microcaps, fertilizer makers are reporting strong first-quarter results, though alternative suppliers, like Reno-based Itronics (OTCBB: ITRO), are seeing potential benefits from those skyrocketing prices.

Potash Corp. of Saskatchewan Inc. first-quarter earnings nearly tripled, though its stock fell more than 6% following the news.

The Canadian company posted net income of $566 million, or $1.74 a share, compared with $198 million, or 62 cents a share, a year earlier. Potash had expected earnings of $1.30 to $1.60. Revenue surged 64% to $1.89 billion.

Chemical & Mining Co. of Chile Inc. saw its shares drop 3.5% Thursday as well. SQM, a maker of specialty fertilizers, reported fourth-quarter earnings for 2007 of $44.6 million, compared to $29.7 million in the year-ago period, a gain of 50.4%.

Itronics (OTCBB: ITRO) shares followed its peers Thursday, dropping 13% after a 25% gain the prior day after the alternative fertilizer maker announced a 22% gain in first-quarter sales.

While farmers look to find ways of cutting costs this year, cutting back on fertilizer use seems to be happening and many have bought early, even stockpiling fertilizer in the fourth-quarter as global prices for fertilizer soar.

The latest report by the International Center for Soil Fertility and Agricultural Development (IFDC) shows that world fertilizer prices rose steadily from 2004 to 2006, but from 2007 forward, prices have soared.

Dr. Balu Bumb, leader of the IFDC Policy, Trade and Markets program, blamed rising prices on farmers in Countries that produce most of the world's food, namely the United States. "Farmers in industrialized countries are applying high levels of fertilizers to maximize harvests of grain," said Dr. Bumb. "Those forces drive prices higher."

While major fertilizer makers have raised prices substantially, smaller alternative fertilizer makers like Itronics have not. Dr. John Whitney, President of Itronics, said that prices for the Company's environmentally friendly GOLD'n GRO fertilizer have gone up 22 percent this year, while major bulk fertilizer makers, like SQM, have increased prices more than 100%.

Whitney's company, which last year doubled the capacity of its Reno plant, reported first-quarter sales of fertilizer of $446,000. As a maker of alternative fertilizer, Itronics' prices seem like a sale item at Wal-Mart in comparison to SQM and others. Based on Itronics' plant expansion the company could potentially see three-times the dollar volume sales over last year's $1.8 million total before the plant expansion was in place. In a telephone interview Thursday, Whitney declined to forecast sales but admitted that plant expansion and growing demand would benefit the Company's bottom line results.

Whitney noted that a new product was being launched this year. GOLD'n Gro Guardian, a systemic deer repellent, is to be sold on the East coast once registration is completed. Itronics looks to begin marketing its deer repellent in late May or June.

Unlike other fertilizer makers, Itronics' raw product comes from recycled photochemicals. While it may sound odd, photochemical waste is considered an environmental hazardous waste and disposal requires strict EPA adherence. Itronics operates the only plant in the US approved by the EPA, making its GOLD'n GRO line of liquid fertilizers unique. But Whitney says that besides those advantages the cost of raw materials aren't being affected by rising prices as is the case for SQM. Another bonus are the heavy metals removed in the fertilizer manufacturing process which Itronics turns into 5-ounce pure silver bars of numismatic quality. Silver sales in the first quarter were up 70%.

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