Two fertilizer companies fell more than 10% after the CEO of a Russian potash competitor announced that it was leaving a decades-old potash cartel and would pursue a volume-based strategy that could deteriorate global potash pricing power, points out John Buckingham of The Prudent Speculator.

Agrium (AGU) is one of the largest retail suppliers of agricultural products and services in North America, South America, and Australia, and a wholesale producer and marketer of all three major agricultural nutrients (nitrogen, potash and phosphates.)

While there are definitely weeds in the field, we are positive on the long-term prospects of AGU and its diversified business (less than 15% of 2013 earnings are exposed to potash), as well as the long-term global prospects for agriculture, especially within emerging market economies, as more and more individuals move into the middle class and add protein to their daily diets.

We like that Agrium has extensive retail and solid wholesale operations, and is well positioned throughout the agricultural value chain (including seeds, crop chemicals, and services such as application.) AGU generates solid free cash flow and offers investors a current dividend yield of 2.4%.

Mosaic (MOS) is the world's largest integrated producer of phosphate, and the third largest global producer of potash. MOS markets its North American-based production throughout the world via export marketing groups and distribution assets in 11 countries.

While the near-term headwinds could be difficult to overcome, we note that these types of spats in cartels often don't result in anarchy, but instead, lead to new agreements that evolve over time.

Additionally, we like that Mosaic has a fortress balance sheet that includes $6.25 per share of net cash, and that the firm generates strong free cash flow, giving management operational flexibility to return capital to share holders via share repurchases and/or dividend increases.

We believe that while the operating environment will be challenging over the coming quarters, the firm stands to benefit long-term from the positive global macro agriculture trends.

With a very inexpensive valuation after the plunge in the share price and a dividend yield of 2.4%, we welcome old friend MOS back into our portfolios.

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