Potash miner K+S says US farmers to foot the bill for Trump’s tariffs

Germany’s K+S, which exports potash to U.S. farmers from Canada, on Thursday said it would pass any tariff-related costs onto customers, after its 2025 earnings forecast disappointed investors.

K+S produces around 8 million tonnes of potash products yearly, exporting about 300,000 tonnes to the United States mainly from Canada. Potash is primarily used in fertilizers.

“The tariffs will be passed on one-to-one to costs, meaning the American farmer will ultimately foot the bill,” CEO Burkhard Lohr said in a press conference.

“If this becomes a sustained issue, we have the option to serve the U.S. market from Germany at lower costs, as there are currently no tariffs on European potash deliveries,” he added.

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Why it matters: Agricultural inputs like potash and phosphate have become leverage points in the ongoing trade war with the U.S.

Shares of the potash and salt miner were down around 5 per cent as of 10:25 GMT, cutting into their year-to-date gains that stood at 35 per cent as of Wednesday’s close.

Warburg Research analyst Oliver Schwarz said those gains were based on more positive “buy-side” expectations that had counted on a continued strong earnings boost from higher potash prices, which were dampened by the broadly stable outlook.

After a period of volatility caused by Russia’s invasion of Ukraine that shrank margins at potash miners, potash prices began to stabilize in 2024.

Since December, they have been on an upward trend, rising around $5 every week or two, K+S said.

It forecast earnings before interest, taxes, depreciation and amortization (EBITDA) of 500 million to 620 million euros (C$781.8 million and $C969.4 million) in 2025, compared with 557.7 million last year.

At its midpoint of 560 million euros, the outlook is above analysts’ average estimate of 537.5 million in a Vara poll, but the buy-side had expected more, Schwarz said.

K+S topped market expectations for 2024 core earnings, in contrast to North American rivals Mosaic and Nutrien whose results missed them due to lower sales.

Lohr said the company expected the positive potash price trend to continue, helped by strong demand from markets like China which is tapping into its strategic reserves to meet agricultural needs.

(1 euro = C$1.56)