The Zacks Fertilizers industry is poised to gain from solid demand fundamentals for key crop nutrients like phosphate and potash. Strong agricultural market conditions and favorable farm economics are driving fertilizer demand worldwide.  
  
Industry participants, such as Nutrien Ltd. (NTR Quick QuoteNTR - Free Report) , CF Industries Holdings, Inc. (CF Quick QuoteCF - Free Report) and  Yara International ASA (YARIY Quick QuoteYARIY - Free Report) , are set to benefit from higher demand for fertilizers in major markets. Higher fertilizer prices also augur well for these industry playe

About the Industry

The Zacks Fertilizers industry comprises producers, distributors and marketers of crop nutrients for the global agriculture industry. Companies in this space offer nutrients such as phosphates (including diammonium phosphate, monoammonium phosphate and phosphoric acid), potash and nitrogen (including urea, ammonia and urea ammonium nitrate) fertilizers. They also provide other nitrogen products to help farmers maximize crop yield. Crop nutrients are essential to drive agricultural productivity and boost the natural fertility of the soil. Demand for these nutrients is being supported by the need to increase the production of grains to address rising food consumption globally. Moreover, the constant need of growers to nourish their crops, replenish nutrients in the soil following a harvest and boost yields to feed a growing global population drives the consumption of fertilizers.

What's Shaping the Future of the Fertilizers Industry?

Favorable Demand for Crop Nutrients: The companies in the fertilizers space are well-placed to benefit from healthy global demand for major crop nutrients. Fundamentals in the broader agriculture space remain positive, given the sustained rise in food demand globally. Farmer economics also remain attractive in most global growing regions due to strong crop demand.  Favorable farmer economics, improved affordability and low inventory levels are expected to drive potash demand globally. The phosphate market is also supported by low producer and channel inventories. Demand for nitrogen fertilizer also remains healthy in major markets, driven by requirements in North America, India and Brazil. Expectations of high levels of planted corn and soybean acres globally also suggest a pickup in fertilizer demand in 2026.

Higher Fertilizer Prices Augur Well: Prices of phosphate, potash and nitrogen remained depressed in 2023 and 2024 amid oversupply in the market and weak demand, weighing on the profitability of fertilizer companies. On a positive note, strong demand and supply tightness led to an uptick in fertilizer prices in 2025, with phosphate prices seeing a notable increase. Prices were driven by solid agricultural demand in major markets, China’s export restrictions, U.S. tariffs and higher costs of inputs. The upward momentum in fertilizer prices continues this year. Higher prices are expected to drive top-line and margin expansion for companies in this space over the near term.

Elevated Input Costs a Concern: Increased prices of major raw materials pose a headwind to fertilizer companies. Prices of both sulfur and ammonia — key inputs for the production of phosphate — remain elevated. Supply disruptions from Russia amid the war with Ukraine contributed to the rise in prices of both sulfur and ammonia. Plant shutdowns and maintenance also led to a tight supply of these raw materials, which, coupled with strong demand, pushed up their prices. Rising natural gas prices, a key feedstock for nitrogen fertilizer, are also a concern. Higher raw material costs have led to an increase in production costs. As such, fertilizer makers are likely to face short-term margin pressure associated with higher input costs.

Zacks Industry Rank Reflects Upbeat Prospects

The Zacks Fertilizers industry is part of the broader Zacks Basic Materials sector. It carries a Zacks Industry Rank #41, which places it in the top 17% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates a bright near-term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.

Industry Underperforms S&P 500

The Zacks Fertilizers industry has underperformed the Zacks S&P 500 composite and the broader Zacks Basic Materials sector over the past year.

The industry has gained 22% over this period against the S&P 500’s rise of 42.8% and the broader sector’s increase of 53.4%.

One-Year Price Performance

 

Industry's Current Valuation

On the basis of the trailing 12-month enterprise value-to EBITDA (EV/EBITDA) ratio, which is a commonly used multiple for valuing fertilizer stocks, the industry is currently trading at 8.76X compared with the S&P 500’s 18.64X and the sector’s 15.43X.

In the past five years, the industry has traded as high as 18.05X and as low as 4.55X, with a median of 9.76X, as the chart below shows.

Enterprise Value/EBITDA (EV/EBITDA) Ratio

Enterprise Value/EBITDA (EV/EBITDA) Ratio


 

3 Fertilizer Stocks to Keep a Close Eye on

Yara International: Norway-based Yara International is a leading global producer and supplier of mineral fertilizers. It has industry-leading experience in ammonia development, production, operations and distribution. A favorable nitrogen demand environment bodes well for YARIY. Cost reductions and actions to strengthen the balance sheet are expected to boost the company’s profitability and cash flows. YARIY also remains focused on rewarding its shareholders by leveraging strong cash flows.

Yara International currently has a Zacks Rank #1 (Strong Buy). It has an expected earnings growth rate of 33.5% for 2026. The Zacks Consensus Estimate for 2026 earnings has been revised 25% upward over the past 60 days. YARIY has a trailing four-quarter earnings surprise of roughly 74.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: YARIY

CF Industries: Illinois-based CF Industries is a leading global manufacturer of nitrogen and hydrogen products for fertilizer, clean energy, emissions reduction and other industrial applications. It is gaining from higher nitrogen fertilizer demand in the major markets such as North America, Brazil and India. CF is seeing higher nitrogen demand for industrial uses in North America. Higher nitrogen prices are also contributing to a boost in CF Industries’ revenues. CF remains committed to boosting shareholders’ value by leveraging strong cash flows. The company is also taking action to de-leverage its balance sheet.

CF Industries, currently with a Zacks Rank #2 (Buy), has an expected earnings growth rate of 6.2% for 2026. The consensus estimate for 2026 earnings has been revised 36.5% upward over the past 60 days. CF’s earnings beat the Zacks Consensus Estimate in each of the last four quarters at an average of 13.2%.   

Price and Consensus: CF

Nutrien: Canada-based Nutrien is a leading provider of crop inputs and services. The company is benefiting from higher demand for crop nutrients, backed by supportive global agriculture markets. It is seeing strong demand in its major markets, particularly North America. NTR is also gaining from acquisitions, cost efficiency and increased adoption of its digital platform. The company also continues to expand its footprint in Brazil through acquisitions. Cost and operational efficiency initiatives are also expected to aid its performance. The company has announced several strategic actions to reduce its controllable costs and boost free cash flow. 

Nutrien has expected earnings growth of 9% for 2026. The Zacks Consensus Estimate for 2026 earnings has been revised 4.4% upward over the past 60 days. Nutrien currently carries a Zacks Rank #3 (Hold).

Price and Consensus: NTR