Monsanto Company (MON), E I Du Pont De Nemours And Co (DD): Focusing on Daily Bread for Farmers and Investors

Mosaic Co (NYSE:MOS) produces and markets concentrated phosphate and potash crop nutrients. It’s sitting on approximately $2 billion of surplus cash and has $3 billion of debt capacity. This is an important element for investors and speaks of financial solidity. It has the reserves required to operate its business, can take on debt to finance initiatives, and can pay debt back on schedule.

Sales

Mosaic Co (NYSE:MOS) recorded an all-time potash sales record during 4Q 2013:  2.6 million tonnes. For investors, Mosaic is cash-rich and has robust revenue concerning an all-important crop nutrient.

Mine capacity

Mosaic Co (NYSE:MOS)’s potash mines operated at 78% of capacity in Q3 2013. Mosaic Co (NYSE:MOS) benefited from greater strength in China/India demand. Investors should consider corporate efforts to utilize available mine capacity. Companies have significant capital tied up in mine infrastructure (with attendant fixed costs). To generate significant ROI, the company must concentrate on operating at capacity.

Conclusion

I like DuPont’s product innovation and commitment to crop yield/crop protection products. Investors must consider corporate changes of direction. New growing markets often open and offer companies opportunities for growth. Upon researching a company’s change of direction, investors can benefit from this also. I see crop yield innovation fostering sustained growth for DuPont and its shareholders.

I believe Monsanto’s efforts in building consistent sales in other seeds is vital to growth. I might invest if I see growth in other seed categories. I like Monsanto’s decision to say no to GMO – based purely on commercial prospects. It  is concentrating on its core-traditional EU seed business.

Mosaic Co (NYSE:MOS) is a wait right now for me. I like Mosaic’s focus on potash crop nutrients for farmers. However, the fear for Mosaic Co (NYSE:MOS) is that potash supply will outstrip demand. This is pounding potash-industry share prices. The reason? OAO Uralkali is terminating production restrictions that were essentially the foundation of potash prices. It halted a venture with Belarus and intends to build sales to consumers including China. A potash price war and a change in supply dynamics will hurt Mosaic.