Tight global commodity supplies are helping drive a strong market for farm inputs, two major suppliers said in reporting their earnings Thursday.

Corteva Agriscience beat analysts’ estimates handily, delivering earnings per share of $1.16, well above the average prediction of 93 cents/share. The seed and crop protection chemical company’s overall sales topped $5 billion in its first quarter, 6% above the same quarter in 2022, and Corteva increased its estimate of net sales through the next quarter to $18.9 billion, up from $18.6 billion.

“We continue to see tight grain and oilseed inventories around the world, with crop prices above historical averages,” Corteva CEO Chuck Magro said on an earnings call Thursday. “The ag fundamentals remain constructive, underpinned by the profitability of farmers. There has been no change in farmer priorities. They are investing in productivity and yields, and we expect that to continue.”

Corteva said net sales of seeds in the first quarter were up 7% and crop protection chemicals increased 5%. Magro cited in particular the growing popularity of its Enlist soybean seeds and accompanying herbicides. “We expect the U.S. soybean market penetration percentage for Enlist to be in the mid-50s” this year, Magro said, up from 45% in 2022.

Meanwhile, fertilizer manufacturer The Mosaic Co. reported significantly lower net income than its first quarter a year ago – $435 million compared with $1.2 billion in the year-ago period. Sales of both phosphates and potash, as well as margins, were down from a year ago.

However, “The fundamentals of the agriculture market remain quite attractive,” Mosaic CEO Joc O’Rourke said. “Global stock-to-use ratios for grain and oilseeds are at 25-year lows. To put that in context, it would take two to three years of perfect weather and adequate fertilizer applications in every major growing region around the world just to get back to normal levels.” 

The CEOs’ outlooks are in line with what CF Industries’ CEO Tony Will said earlier this week when the nitrogen manufacturer released its results. Net earnings per share were down from $4.21 in 2022’s first quarter to $2.85 this year. Net sales were down about 30%, from about $2.87 billion to $2 billion.

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“Despite downward pressure in the global nitrogen market compared to the unprecedented pricing environment in 2022, industry fundamentals remain positive and forward global energy curves suggest attractive margin opportunities for our cost-advantaged network for the foreseeable future,” Will said.

Global nitrogen prices fell during the first three months of 2023 as higher production increased supplies, CF said, noting that development coincided with delayed purchasing and high inventory levels in Europe.

“Global urea prices have risen as demand emerged in April for the spring application season in North America,” CF said. “Longer-term, management expects the global nitrogen supply-demand balance will remain positive, underpinned by agriculture-led demand and forward energy curves that point to wider-than-average energy spreads for LNG-dependent producers in Europe and Asia.”

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