Crop Nutrient Demand Surge: Three Fertilizer Stocks Positioned to Capitalize

The agricultural sector is experiencing strengthened fundamentals that are creating tailwinds for fertilizer producers. With healthy farm economics and robust global demand for crop nutrients—including phosphate, potash, and nitrogen compounds—the stage is set for savvy investors to identify key players in this space.

Three companies stand out: Nutrien Ltd. (NTR), ICL Group Ltd. (ICL), and CF Industries Holdings, Inc. (CF). Each operates in the growing fertilizer market with distinct competitive advantages as demand accelerates across major agricultural regions.

Investment Thesis: Why Fertilizer Stocks Matter Now

The global appetite for crop nutrients continues to strengthen, driven by rising food consumption and the agricultural industry’s constant need to replenish soil fertility and maximize yields. Phosphate, potash, and nitrogen remain essential inputs for farmers worldwide, and current market conditions are amplifying their importance.

In the United States, farm profitability has reached attractive levels, with the U.S. Department of Agriculture projecting net farm income to climb 29.5% year-over-year to $180.1 billion in 2025—bolstered by an expected $42.4 billion in direct government payments. This income surge is expected to translate directly into increased farmer spending on crop nutrient inputs.

Globally, the picture mirrors this strength. Brazil and India are experiencing strong grower economics, while North America benefits from elevated planted acreage levels. The phosphate market is particularly well-positioned, with low producer inventories and robust global demand. Similarly, potash demand is gaining momentum from improved affordability and lean channel stockpiles, while nitrogen fertilizers maintain healthy demand across industrial and agricultural applications.

Three Fertilizer Stock Standouts

Nutrien: Market Leader with Momentum

Nutrien occupies a leading position as a comprehensive crop inputs and services provider. The Canadian company is capitalizing on elevated demand for crop nutrients, with particularly strong performance in North America. Strategic acquisitions, operational efficiency gains, and the expanding adoption of its digital platform are creating multiple growth drivers.

The company’s Brazilian expansion through targeted acquisitions further diversifies revenue streams. Declining natural gas costs have also become a favorable tailwind. Carrying a Zacks Rank of #2 (Buy), Nutrien boasts expected earnings growth of 5.9% for 2025, with analyst estimates revised upward 1.6% over the past 60 days. The company also maintains an impressive long-term earnings per share growth rate of 12%.

ICL Group: Specialty-Driven Growth

Israel-based ICL has carved out a niche by focusing on the fertilizer and specialty chemicals sectors. The company’s strategic initiatives—including operational efficiency improvements and innovative product launches—are strengthening its market position. Recent acquisitions such as Nitro 1000 have expanded its footprint in Brazil’s specialty plant nutrition segment.

The Custom Ag Formulators acquisition bolstered its global Growing Solutions business, while a new food specialty plant in China opens doors for customer relationship deepening and market expansion. ICL’s investment in sustainable food-sector innovations demonstrates forward-thinking strategy.

Ranked #2 on the Zacks scale, ICL demonstrates consistent earnings performance. The company is projected to deliver 14.4% earnings growth in 2025. Over the last four quarters, ICL has beaten consensus estimates each quarter, averaging an 18.1% earnings surprise—a track record suggesting management execution quality.

CF Industries: Nitrogen Specialist with Industrial Reach

CF Industries, based in Illinois, operates as a major global nitrogen and hydrogen products manufacturer serving fertilizer, clean energy, and industrial markets. The company is benefiting from strengthened demand for nitrogen fertilizers across key markets, particularly in North America where industrial applications are climbing.

Favorable natural gas pricing supports the company’s competitive cost structure. CF remains committed to shareholder value creation through disciplined cash flow deployment. While carrying a Zacks Rank of #3 (Hold), CF demonstrates solid earnings execution—averaging a 10.3% surprise over the past four quarters—with an impressive 37% long-term earnings per share growth trajectory.

Valuation Perspective: Industry Assessment

The Zacks Fertilizer industry currently trades at an EV/EBITDA multiple of 10.98X, sitting below the S&P 500’s 17.67X and the broader Basic Materials sector’s 11.51X. This valuation reflects recent underperformance (down 1.1% over the past year versus the S&P 500’s 23.3% gain), creating potential opportunity for value-oriented investors.

The industry carries a Zacks Industry Rank of #39, placing it in the top 16% of over 250 classified industries—signaling favorable near-term prospects. Historically, the industry has traded between 4.97X and 21.88X, with a five-year median of 10.71X.

Navigating Headwinds

Price weakness in phosphate and potash since late 2022 remains a near-term margin pressure, as do softer nitrogen valuations since early 2023. Higher global supply from increased operating rates has compressed pricing. However, this cyclical challenge is viewed as temporary relative to the structural demand support from rising global agricultural needs and strong farm economics expected throughout 2025.

The confluence of healthy farm income, expanded planted acreage expectations, and depleted fertilizer inventories positions the industry favorably for the near term, despite current pricing pressures that investors should monitor.