The Mosaic Co. has announced a reduction of up to 20 percent in planned potash production from February through May 2012. This curtailment will result in lower operating rates at Mosaic's mines, but is not currently expected to result in any employee layoffs or material mine shutdowns.
The Mosaic Co. plans to reduce finished phosphate production by up to 250,000 tonnes through March 31, 2012. In the company's last quarterly statement, it reported producing 2.2 million tons of finished phosphate.
"Isolated phosphate market spot prices have become disconnected with the underlying agricultural fundamentals," said Jim Prokopanko, Mosaic's President and CEO. "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 tonnes over the next three months."
The company's second quarter results will be released after close on January 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 January 4, 2012 earnings release.
"We continue to expect an above average application season in North America and record-setting global demand for both phosphate and potash in 2012," stated Prokopanko. "We are confident strong farmer economics and agricultural fundamentals will ultimately prevail over the near-term cautious sentiment."
Source: Mosaic Co.