Potash (NYSE:POT), Mosaic (NYSE:MOS), Agrium (NYSE:AGU) Continue to March On and Up

The fertilizer story continues to be one of the top financial stories, and companies like Potash (NYSE:POT), Mosaic (NYSE:MOS) and Agrium (NYSE:AGU) continue to move up in share price at a steady pace as almost everything remains in place that has brought them this far.

There are even some added things this year which could dramatically boost the companies more, specifically the devastating weather that has pummeled a number of important regions around the world.

Another new factor is the Egyptian situation, which has been mostly focused on from a political point of view, but a big element that is part of the Egyptian story is a lack of food.

This is going to become an increasingly important part of geopolitical influences, and the rising price of food, and lack of food, will generate more unrest and protests, which will cause government to do what they can to provide for and placate their people as much as possible.

That will create extraordinary demand for fertilizers in the months and years ahead.

Those are things that could rise up at any time, and weather is the one unpredictable part of the overall picture, but will also be devastating in some part of the world every year. The impact is on fertilizer and agriculture is determined by how important a factor that particular company is in the production of food.

Other factors that are long-term trends are the growing middle class in emerging markets, more disposable income and more people coming into the world. That's not going to go away anytime soon and will continue on for years.

Global demand for food is at the highest levels in history and supply is struggling to meet it.

The demand for food isn't just for any food either, as far as it relates to the emerging middle class around the world. They don't just demand food, they want a better quality and wider variety.

Take meat for example. Prices have been rising in response to demand and some of the situations mentioned above. You feed cattle, chickens and hogs, or whatever, with corn and soybeans. But what makes the corn and soybeans grow? Fertilizer.

Lower prices of crops for several years punished the fertilizer companies, but that changed last year, and in that regard we're probably in a long-term paradigm shift where higher prices will continue on for some time.

Finally, not only does existing farmland need fertilizer, but there is a need for new farmland to be worked, which will also cause increased demand for fertilizers.

Does that mean these companies are a surety at any time going forward? No!

Some years the weather patterns are so benign that there is an enormous abundance of major crops, which can push the price of fertilizer down on lower demand.

As mentioned though, the supply and demand scenario has changed, and barring a major recession in Asia, especially China and India, food demand should remain high.

Remember, it's not just food in general in these countries, but a higher quality and variety of food that is driving a lot of this. Filling empty bellies isn't primarily what is driving the demand.

While the interest rates in the U.S. are a positive for fertilizer companies, and the Federal Reserve has said they have no intention of raising them anytime soon, some day that will happen, and it will change the equation some.

As horrible as it would be, pressure from hostile populations could also result in food prices being regulated, which would damper fertilizers as well if price controls were put into effect.

The point is, barring unusual circumstances, fertilizer companies will continue to generate major earnings for their shareholders. The three major ones mentioned above will lead the way.

Potash closed Thursday at $185.02, climbing $2.95, or 1.62 percent. Mosaic closed at $85.92, gaining $1.40, or 1.66 percent. Agrium closed at $96.54, rising $0.42, or 0.44 percent.