I have been hounding on the impact gas prices would have on companies like Terra Industry. Terra Industry recently said that Natural Gas Prices won't impact margins THIS QUARTER, but if fertilizer prices don't rise next quarter will see a squeeze.
The truth is Terra Industry bought 28% of it's gas on the futures market. 28% of ther gas needs were bought under $8. This was ment to meet the purchase of fertilizer that was secured by farmers for the spring.
Next Quarter will be a wild ride. Gas is not just rising a few pennies from this quarter. For most of this quarter gas was purchase with last quarter prices. Not shit the temporary impact of the gas spike won't effect this quarter. Next quarter operation cost will rise 40%!!! That is a shot load of money.
The fact that TRA skirts around the truth should be the telling sign of what is to come.
$35.51 (03/20/08)
