The Mosaic Co. has announced a plan to reduce finished phosphate production by up to 250,000 mt through March 31, 2012.
"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. In response, we have decided to cut planned production by 250,000 mt over the next three months," said Jim Prokopanko, president and CEO.
Most sources last week were expecting the majority of the production cutbacks to occur at Mosaic’s Faustina, La., plant, which supplies the barge market and which also uses imported rock. Sources suspect any cutbacks in Florida would be less, as export and Central Florida prices have remained stronger than those at NOLA.
"We continue to expect an above average application season in North America and record-setting global demand for both phosphate and potash in 2012," said Prokopanko. "We are confident strong farmer economics and agricultural fundamentals will ultimately prevail over the near-term cautious sentiment."
The company’s second-quarter results will be released after market close Jan. 4, 2012. Volumes and pricing for the second fiscal quarter were within prior guidance ranges for both phosphate and potash. The company will provide guidance for the third fiscal quarter in the Jan. 4, 2012, earnings release.