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U.S. farmers continue to spend on fertilizer despite an escalating trade war between the United States and China that has depressed crop prices, but their fears about the financial impact may grow if the fight extends beyond the harvest, the chief executive of Nutrien Ltd. said on Thursday.

China on Thursday urged the United States to “calm down” and return to reason after the Trump administration proposed a higher 25-per-cent tariff on US$200-billion worth of Chinese imports.

The trade fight has pressured U.S. crop prices, which are also weighed down by the prospect of strong harvests. China last month imposed a duty on soybean imports, slowing U.S. purchases.

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Crop prices are a major factor in farmer spending on fertilizer and other supplies. But U.S. farmers have continued to buy yield-boosting products as the U.S.-China trade war unfolds, said Nutrien CEO Chuck Magro on a quarterly conference call.

The fertilizer and farm-supply company, the world’s largest by capacity, also expects strong fertilizer demand in the fall, a key sales season, Mr. Magro said.

“However, farmers will be watching crop prices and trade developments closely, particularly postharvest, and are likely to become more concerned if there is not a resolution on the trade front by that time,” Mr. Magro said. “Farmers can’t afford to have one bad year. That’s where our concerns lie.”

Nutrien raised its profit outlook and posted better-than-expected quarterly profit late on Wednesday, on higher prices for potash and nitrogen.

Its shares rose more than 4 per cent in New York and Toronto, as a rosier fertilizer outlook cheered investors. Stock of nitrogen fertilizer maker CF Industries soared more than 10 per cent after its quarterly results beat estimates.

Nutrien boosted its full-year adjusted earnings per share forecast to a range of US$2.40 to US$2.70, from US$2.20 to US$2.60.

It also raised its forecast for potash sales volumes to between 12.3 million and 12.8 million tonnes. This compares with a May projection of 12 million to 12.5 million tonnes.

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Global potash sales look to reach a record 65 million to 67 million tonnes in 2018, led by strong demand in Latin America, the company said.

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