Low prices for phosphate fertilizer products have forced The Mosaic Co. (NYSE: MOS) to cut production by up to 250,000 tons in the first quarter of 2012. Fertilizer makers Potash Corp. of Saskatchewan (NYSE: POT), Agrium Inc. (NYSE: AGU), and Monsanto Co. (NYSE: MON) are less dependent on potash sales than is Mosaic.
According to the company’s CEO,
Isolated phosphate market spot prices have become disconnected with the underlying agricultural fundamentals. As dealers and distributors focus on the macroeconomic uncertainty and delay purchases for the North American Spring Season, near term supply of phosphate barges on the Mississippi River has exceeded near-term demand. The current spot prices in this market do not reflect our outlook for the business, nor do we think they are sustainable.
The company continues to believe that believe that demand for phosphates and potash will be strong in 2012, following this period of “near-term cautious sentiment.”
The projected cuts total about 10% of Mosaic’s quarterly production.