On July 18th, Companhia Vale do Rio Doce (NYSE: VALE) said it was not interested in acquiring more fertilizer companies. The statement was made after a Sao Paulo newspaper reported the Brazilian mining company was considering a $25 billion buyout of the Minnesota-based fertilizer company Mosaic (NYSE: MOS). Vale, the largest producer of iron ore, spent $850 million earlier this year on potash assets in Argentina and Canada.

Initial reports of the potential offer temporarily drove Mosaic’s share price up +11.2%. They also temporarily buoyed the potash industry, which is contending with new pricing pressures.

As the world slipped into recession, nitrogen and phosphate fertilizer prices fell. But a small group of potash companies that control roughly 75% of the market were able to hold potash fertilizer prices fairly steady by cutting production. But demand has dropped faster than supply, leaving the industry holding +115% more potash inventory than its five-year average.

Last month, Russian potash producer Silvinit broke ranks with the industry and closed a deal with India, selling fertilizer for just $460 a metric ton. Up until that deal, producers were projecting sales to India near last year’s price of about $630 a ton. Last week it was reported that Agrium (NYSE: AGU) was lowering its domestic list price of potash by roughly -25%.

This could be a good entry point for investors looking to benefit from a long-term play. Even with the cuts, potash prices are still well above their $270 a ton six-year average. Potash companies have a lot of cash on their balance sheets and ample time to wait for an uptick in demand. And the uptick will come.

Agriculture is one of the best long-term investment plays around. As the world’s arable land diminishes while its population grows, crop yields will need to improve. That’s partially accomplished with fertilizer, which means its demand will increase.

Investors may want to wait for this latest cycle of earnings announcements to play out, in hopes that companies will lower expectations over the short term. If that happens, an exchange-traded fund like PowerShares Global Agriculture (Nasdaq: PAGG), which lists fertilizer companies like Mosaic and Potash Corporation of Saskatchewan (NYSE: POT) among its top holdings, represents a diversified and low-cost opportunity.