By Leia Michele Toovey- Exclusive to Potash Investing News.

^[1]Fertilizer prices ^[2] are finally falling, but not enough to coax farmers into big purchases for the spring planting. The worldwide financial crisis has them rationing their use of stored inventory. The steep decrease in crop prices ^[3] have left farmers with less money to purchase fertilizer, shifting their focus to cost savings rather than profit or yield maximization.  Potash sales have slowed dramatically in recent weeks, indicating farmers are either waiting until the last minute to buy for the coming season or even forgoing some fertilizers.

Just earlier this year global demand for fertilizer fell off as prices rose, adding to supplies and further depressing prices. In a typical year, 40 percent of annual fertilizer application occurs in the fall, but this year preliminary figures indicate that the rate was near half the anticipated amount. Fertilizer purchases are running about 60 percent of normal.

As a result, potash producing giants have seen their shares downgraded in the past weeks. Goldman Sachs downgraded agricultural products maker Monsanto ^[4] (NYSE:MON) and Potash Corp of Saskatchewan saying it expects a smaller crop in 2009 as falling grain prices delay planting decisions.  Both companies have been downgraded to "neutral" from "buy." BMO Capital Markets also cut its price target on Potash Corp to $115 from $145 on lower fertilizer demand. However, it maintained it's "outperform" rating on the company saying it could weather the crisis.

Potash Corp ^[5] (TSX: POT) has already warned its workers to anticipate a slow down in 2009. They were quick to point out, However, this should not be taken as a warning sign associated with the world financial crisis, rather the  company is  predicting a slow down in the first quarter, but it will rebound for the rest of the year," The softening economy has caused potash producer Mosaic to cut production. Word came from the company's Second Quarter Financial Results.  The potash producer will cut production by one million tonnes this year. The company recently announced it was reducing phosphate production by about 1 million tonnes through December 2008. There is no mention of company layoffs and the slowdown is being attributed to reduced demand and higher costs.

Agrium Inc.'s chief executive Mike Wilson has taken a bullish tone on the future for the potash market, and his company. Agrium ^[6] (TSX: AGU), North America's third-largest fertilizer producer, stopped production of nitrogen and phosphates earlier this month at some of its North America facilities.  Agrium's share price has taken a pounding in the market collapse, sinking to a 52-week low of $28.70 on the TSX in early December, after reaching a 52 week high of $116.15 on June 18. According to Wilson, this negative affect on his company's share value isn't based on the fundamentals of the agriculture industry, which are as strong as ever, but it is an example of the kind of wild swings that are all part of the great fear. The fertilizer market will benefit from the fact that people have to eat. Sure, people can delay purchasing a car, or a home, for that matter.  But, people must eat. Wilson cautions that farmers are playing a dangerous game by cutting back on fertilizer use.  Without proper fertilization crops are vulnerable to damage from weather, disease and pests.  If any of the above occurs famers run the risk of losing their entire crop.