Faith, the future and Potash

In deal-making you have to eventually jump off the cliff of faith. Take a chance. Have the confidence that you’ve done your due diligence and now it’s time to jump.

Is there a chance that the future value of potash (the commodity) is simply unfathomable at this juncture?

Do we even have a rough idea of how food demand will stack up for China, India, Latin American and Africa over the next 50 years? I guess BHP Chief Executive Marius Kloppers has a pretty good hunch.

But, I wonder if we can work out what potash (the commodity) is actually worth.

I’m uncertain we have enough hints about what the world will look like over the next century in terms of food demand. Maybe in 10 years we will. Maybe in 5 years. Maybe by then we’ll have more hints as to whether Potash Corporation of Saskatchewan is well priced at US$130 per share, or $160 or $260 or $360.

I’m not sure we do right now.

But if, and when, the company is sold it should be a shareholder decision. Not the government’s. But that’s not my focus. Faith in a decision is what I point to. Part of that faith is built on being ready.

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