I stole this from the following website www.spectrumanalytic.com/support/library/ff/salt_index_calculation.htm
For more in depth information check it out
"Salt content is one of the most critical characteristics of fertilizers used for row-seed placement. The SI is a measure of the salt concentration that fertilizer induces in the soil solution.
The SI of a material is expressed as the ratio of the increase in osmotic pressure of the salt solution produced by a specific fertilizer to the osmotic pressure of the same weight of NaNO 3 , which is based on a relative value of 100. Sodium nitrate was chosen as the standard because it was 100 percent water soluble and it was a commonly used nitrogen fertilizer when the SI concept was first proposed in 1943. Higher analysis fertilizers usually have a lower SI because fewer ions of salts are placed in the soil solution per unit of plant nutrient when they dissolve."
First off even if there is a bubble, just because there is a bubble does not mean the stocks won't go higher. But I do believe it is possible for fertilizer sales to drop off "unexpectly" to Wall Street concenses. It is possible for the farmer to buy LESS fertilizer even though corn prices go up. The question is how many years will a corn farmer fertilize his crop before taking a break and planting alfalfa and hey instead for a year or two? And how many years has corn been excalating in price thanks to ethanol.
I don't see the bubble just yet. I certainly wouldn't short the fertilizer producers. But what I do see is the bubble first popping in the corn belt. Find a fertilizer company that does the mother load of it's sales in Iowa and watch it closely. If it's sales ever drop. It's time to get out.
$163.00999 (01/14/08)
