Marysville, Ohio — Scotts Miracle-Gro Co. is not concerned about the recent spike in urea prices, saying it is well-hedged for the remainder of the current fiscal year and that it expects prices to ease going forward. Scotts recently told analysts it is 88 percent hedged on urea for the rest of the fiscal year. “When we look at the forward markets, we don’t see the current market as being indicative of the forward markets for when we’re going to be back in the market purchasing urea for next fiscal year,” said David Evans, Scotts CFO and executive vice president, strategy and business development. “So at this stage, we are not seeing urea as a material concern for next year.” Company Chairman and CEO Jim Hagedorn added that the company has started to commit to the future urea market, and that it is pretty relaxed about the kind of prices it has been seeing. Scotts did not raise its own product prices this year, even though it incurred higher input costs. However, it is anticipating lower single digit increases next fiscal year. While Scotts earnings were off for the quarter ending March 31, 2012, (GM May 14, p. 12), sales were up, with the company saying as it entered May consumers purchased 1 million more bags of fertilizer than they had the same time last year. Scotts said consumers are buying 2.7 bags of fertilizer every time they buy the company’s new Snap fertilizer spreader. In addition, the company said Miracle-Gro has gained a substantial Facebook presence as it has high profile visibility on the Farmville game website. As a result, the product now has 1.1 million Facebook friends, versus about 5,000 two months ago.
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