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Fred Lum/The Globe and Mail

We've all heard about peak oil. What about peak fertilizer?

It isn't every day that Inside the Market looks to Mother Jones, the muckraking U.S. magazine, for money-making investment ideas, but they may be onto something with the idea that diminishing supplies of inexpensive fertilizers could eventually be a choke point for agriculture.

Their peak fertilizer claim applies to phosphorus and potassium, key plant nutrients, which incidentally are main products of Potash Corp. of Saskatchewan and Agrium Inc., Canada's two big fertilizer producers. If you buy the idea that reserves of the minerals are depleting, the two companies may be a good long-term bet.

Potash Corp. shares are currently in a weak patch because of declining prices for potassium, based on abundant supplies. That situation could reverse quickly if or when fertilizer supplies tighten. And it wasn't so long ago that the federal government blocked BHP's proposed takeout of Potash, in part because of the company's mineral reserves were such a key national resource.

Agrium, with its more extensive retail presence in the farm sector, has been holding up far better than its rival, but would also stand to benefit if supply and demand forces move markets its way.

The two fertilizer ingredients have also been getting a bullish nod from U.S. master investor Jeremy Grantham, who is also quoted in the Mother Jones article. According to Grantham, "These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It's a scary set of statements. Former Soviet states and Canada have more than 70 per cent of the potash. Morocco has 85 per cent of all high-grade phosphates. It is the most important quasi-monopoly in economic history. What happens when these fertilizers run out is a question I can't get satisfactorily answered and, believe me, I have tried. There seems to be only one conclusion: their use must be drastically reduced in the next 20-40 years or we will begin to starve."