Agrium Inc. announced as 2014 ended that it has restarted potash production at its Vanscoy facility after completing a major turnaround to tie in its one million tonne expansion project.

The facility is expected to ramp up production during the first half of 2015, with the target production volume unchanged at 2.1 million tonnes for 2015, according to the company.

How this fits into Rabobank’s Food and Agribusiness Research (FAR) and Advisory team fertilizer analysis is interesting since the expectation is that fertilizer supply is outweighing demand globally, and the price outlook might best be described as cloudy.

Major fertilizer producers estimate a reduction in U.S. phosphate and potash demand; however, the two back-to-back big crops will prevent demand for fertilizer in the U.S. from falling significantly. Continued pressure on farmer margins in the U.S. and Europe will probably drive spring potash applications lower by as much as 5 percent, Rabobank predicts.

For potash, Rabobank sees little upside in price. The potash market is awaiting the outcome of negotiations between suppliers and China for the first quarter 2015 price direction, however, reduced global demand and relatively high inventories gives China pricing power, despite producer-managed supplies and a major flooding accident at a Russian mine.