Fertilizer dealers have returned to rebuilding potash inventories for the first time since the crash in nutrient prices, Intrepid Potash said, unveiling results ahead of market forecasts.

The group, the US's top potash producer, said that dealers had begun placing orders "well in advance" of demand expected from farmers buying for the imminent spring sowing season.

"It seems as though dealers may be more willing to exit spring with some level of inventory entering the summer," Intrepid said.

The willingness to hold surplus supplies represents a turnaround for a sector badly hit by a collapse in fertilizer prices in 2008-09, when low crop values prompted sharp cutbacks in farm spending, and left dealers with expensive inventories on which many swallowed huge losses.

"Dealers… appear confident in their ability to profitably sell the tonnes they have ordered," Intrepid said.

Just-in-time bonus 

Nonetheless, a reluctance among wholesalers to hold large inventories had presented the group with a boost in the October-to-December quarter, stoking demand for so-called "just-in-time" deliveries used by buyers reluctant to hold inventory.

This strategy was enhanced by the group's geography, with mines in New Mexico and Utah, with easy access to main US agricultural markets.

"The flexibility that our locations afford us, coupled with our decision to manage inventories and support the local [just-in-time] truck market, was integral to our solid results for the quarter," Bob Jornayvaz, the Intrepid chairman, said.

"Not only were we able to service our traditional truck markets in the southern US, but we were also able to meet customer demand for tonnes outside these locations, as customers required timely delivery of product from suppliers to satisfy farmer demand."

Intrepid vs rivals 

The marketing strategy helped Intrepid claim, at $386 per short tone, $79 per short ton more for its potash than North American competitors, the majority of which are based in Canada.

And, with wholesalers restocking as well as preparing for a strong demand for farmers, its potash sales, in volume terms, jumped by 44% to 216,000 short tons.

Group revenues rose 32% to $96.2m. And, with efficiencies improved by spreading costs across higher volumes, with potash production raised 80% to 224,000 short tons, earnings jumped nearly three-fold to $18.2m.

The result equated to $0.24 a share higher than the $0.20 a share that Wall Street had expected.

Intrepid Potash shares closed up 3.8% at $37.06 on New York.