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The chief financial officer of Potash Corp. of Saskatchewan Inc. told an industry conference that he does not foresee a repeat of the massive fertilizer price runup of 2008.Liam Richards for The Globe and Mail

Fertilizer prices are rising at a much more subdued pace than skyrocketing crop prices - and that's not necessarily a bad thing, said an executive with the world's largest producer of potash, a key crop nutrient.

Wayne Brownlee, chief financial officer with Potash Corp. of Saskatchewan Inc., said he does not foresee a repeat of the massive fertilizer price runup of 2008.

"What you've seen is a more moderated price increase in fertilizer that has not matched the increase in agriculture commodity prices. And so it's leaving the farmer in a very healthy situation," he told a Scotiabank fertilizer industry conference Wednesday in Toronto.

Mr. Brownlee said Potash's customers - farmers - are earning record margins. Instead of experiencing another 2008-style bonanza, Potash foresees "having a firm foundation under customer engagement on an ongoing basis."

"So we can see growth in prices, but on a moderated basis. That ensures that the volume does not become volatile again."

Global grain demand has been outstripping supply for seven of the past 11 years, and that has led to deep draw-downs on inventories.

"To put this into perspective, just to stand still and not have the situation get worse, we need crop production this year in the grain sector of 5-per-cent growth," Mr. Brownlee said.

"To actually make a difference, you actually need to be higher than that. You need to be around 7 per cent in terms of starting to replenish inventory levels."

Since production growth is actually at around 2 per cent per year, farmers have a long way to go to even maintain the status quo.

"So we need almost perfect weather conditions, which we're not getting," Mr. Brownlee said.

"I think that you should expect sustained pressure on grain prices for the course of this year, and probably into next year."

Earlier, the CEO of another major fertilizer producer, Agrium Inc., said his company is poised to benefit from the broad-based rise in crop prices.

"You don't just have wheat or corn [doing well] It's wheat, corn, soybean, cotton, palm oil - you name it. They're all up high," Mike Wilson told the industry conference.

He said Agrium is in a unique position because of its diversity.

The company has both wholesale and retail operations, a geographically dispersed business around the world, and provides farmers with products for a wide variety of crops.

"We're on just about every crop you can think of," Mr. Wilson said. "We manage strawberries, we manage lettuce, obviously all the major crops, sugar cane, palm oil … bananas."

"And by having that diversity, we're not reliant on one crop."

Mr. Wilson said Agrium, which has its base in North America and has expanded into South America and Australia through acquisitions, is looking at Central Europe as an area that's ripe for expansion over the coming years.

"We just bought CerealToscana … and what that's done is position and strengthen our European position, mainly in Italy, but you see us now starting to move into Central Europe," Mr. Wilson said.

"We're in Bulgaria, we're in Romania and we're looking at Central Europe because we think that's the place we want to be in five to 10 years. There's a lot of growth opportunity. They're not applying the appropriate amount of nutrients, they're not using the latest technology on seed and chemistry."

He described the North American spring planting season, which has been plagued by wet weather including flooding in Manitoba, as "very interesting."

"April was terrible, one of the latest starts we've seen in history from a farmer point of view," Mr. Wilson said.

"In May, it turned right around. May has been an incredible month. We can't keep up to the demand."

With a file from David Paddon in Toronto