This is a stock that you can own for the long haul. I had highlighted MOS in a previous post in early December:

“Regardless of the U.S. economic trends, fertilizer consumption and operating costs should remain fairly constant. But, a modest decline in pricing power is possible if the economy creates a situation where farmers become more cost sensitive. Presently, they are driving brand new pickups and drinking rich man’s whiskey. If that is your concern, take a look at Mosaic (MOS), which has lower exposure to U.S. and Canadian demand. MOS gets only about 40% of its revenue from North America, while Potash (POT), Agrium (AGU) and CF Industries (CF) get roughly 70%, 85% and 90%, respectively. Know this: a U.S. recession is not a substantial risk to fertilizer stocks. However, a reversal in economic growth in China and India is. But even then, the risk of a sharp drop in consumption is limited because grain supply worldwide is so low and shifts in the workforce of those countries makes changes in demand less likely to slacken. In summary, buy that shit.”

On December 4th, the stock was at $71. Is it too late to get in? No. I actually think it may do even better in 2008. Before you call me an asshat, let me give you my take on the stock.

The stock is still cheap. Most investors have never heard of it, even though it’s a huge operation. Institutional ownership is only 26%. It’s American, so it probably won’t be subject to the speculation of a Chinese lotto stock in the overpriced Asian markets. And it is part of a massive, multi-year, possibly multi-decade shift—to more expensive food.

Unbeknownst to the Fly, I “borrowed” his time machine for a joy ride into the future. In 2009, we will look back on 2008, and remember it as the year that food became expensive. Many people will go hungry. This will be one of the big headlines this year. Consider this: Eggs are up 38%, milk is up 30%. Even chocolate is up 6%. Add in the cost of gas and the falling value of homes and people might think twice about buying that iPhone.

In Asia, the effect will be more pronounced. One hundred million newbie middle class-ers in China have developed an appetite for steak and eggs, sodas sweetened with corn syrup, and cream and butter. In essence, they want to gain weight and increase their cholesterol levels. Three billion more Asians need basic staples—but grain (wheat especially, but also rice) prices have soared to 17-year highs. A drought in Australia and poor wheat harvests in Russia make matters even worse.

And finally, ethanol production has pushed up corn and soy bean prices to lofty levels this year.

Fly’s “Milk the Farmer”, is just another way of saying that we are in a new “agricultural super-cycle”. For example, a cross section of agriculture stocks, the DXAG, was up 66% in 2007, after being asleep since 1980.

In January last year, MOS announced $0.15 cents a share earnings, in line with estimates. The stock disappointed in the March report with $0.05 cents, but then reported $0.41 and $0.67 in July and September, respectively.

The company reports tomorrow, January 9 at 10:00 am ET. The Street consensus is $0.72. I think there will be an upside surprise.

If you want to listen to the conference call, the number is 888-680-0892. The passcode is 44890826.

I’m continuing to add to my position while MOS is still under $100.

Be advised that if you decide to short MOS based on this post, this just might be your fate:

UPDATE: I bought 300 MOS at 89.14 today, adding to my current position with a cost basis now of 67.67. Earnings report tomorrow.