Reuters –– Mosaic Co., the world’s largest maker of finished phosphate products, said Tuesday it will reduce phosphate output, and it dampened sales expectations.
The U.S. fertilizer producer said the curtailment, due to the high costs of raw materials sulfur and ammonia, is not expected to result in worker layoffs.
The reduction comes as corn and soybean prices have fallen to multi-year lows due to expected record U.S. production. Softening prices reduce the income farmers have to spend on fertilizer, although big crops offset the price drop somewhat.
The costs of sulfur and ammonia, however, have escalated despite slumping crop prices, said Mosaic CEO Jim Prokopanko.
“In the near term, we will be margin-focused and will limit inventory buildup during the seasonally slow part of the year,” he said.
Mosaic also expects third-quarter potash and phosphate sales volumes to fall to the lower end of its previous forecast due to weather-driven outages in potash production and to reflect the timing of phosphate shipments.
The company, based in Plymouth, Minn., said on July 31 it expected phosphate sales to range from 3.3 million to 3.6 million tonnes in the third quarter, up from 2.7 million a year ago.
Potash sales looked to reach 1.8 million to two million tonnes, up from 1.4 million tonnes a year earlier.
Prices of the nutrients should remain near the midpoint of its previous outlook, Mosaic said.
— Reporting for Reuters by Rod Nickel in Winnipeg.