Fertilizer Producers Squeezed by Lower Prices

The Mosaic Co of Plymouth, MN has reported first quarter net earnings of US$218 million compared with US$380 million in the corresponding period of 2013. The company’’s net sales in the quarter were US$2.0 billion, down from US$2.3 billion. Higher potash and phosphate sales volumes were more than offset by lower realized prices. Mosaic’s Potash segment generated first quarter net sales of US$733 million, down from US$825 million in the same period of 2013. The segment produced 1.9 million tonnes and sold 2.4 million tonnes compared with 2.2 million tonnes produced and 2.0 million tonnes sold in the corresponding period of 2013. The average potash selling price, fob plant, was US$267/tonne, down from US$376/tonne a year ago. Mosaic’s Phosphate segment recorded first quarter net sales of US$1.3 billion, down 16% from the previous year, reflecting lower prices. The segment’s North American finished phosphate production was 2.0 million tonnes or 79% of operational capacity. Sales volume was flat at 2.7 million tonnes and the segment’s average DAP selling price was US$414/tonne compared with US$491/tonne a year ago. The company’’s phosphate rock production was 2.0 million tonnes during the quarter, flat with a year ago, about 79% of operational capacity. Agrium Inc of Calgary, AB has reported first quarter potash sales of US$128 million compared with US$152 million in the same period of 2013. The segment’s gross profit was US$46 million versus US$84 million in the same quarter last year. The decrease was driven by lower benchmark and realized sales prices, as well as lower international sales volumes, partially offset by increased domestic sales volumes. International potash sales volumes were 136,000 tonnes at an average selling price of US$204/tonne down from 180,000 tonnes at an average selling price of US$327/tonne in the first quarter of 2013. North American sales were 292,000 tonnes up from 198,000 tonnes. However, the company’’s average realized selling price decreased from US$473/tonne to US$342/tonne. Agrium’s phosphate segment made a first quarter gross profit of US$2 million on sales of US$167 million down from US$37 million on sales of US$162 million in the prior year period. The decrease was due to lower realized sales prices, partially offset by higher sales volumes. Phosphate sales volume increased from 232,000 tonnes to 308,000 tonnes while the average realized selling price fell from US$698/tonne to US$544/tonne. Intrepid Potash Inc of Denver, CO has reported a first quarter net loss of US$0.4 million on gross sales of US$98.9 million, down from a net income of US$14.9 million on sales of US$99.3 million in the first quarter of 2013. During the latest period, Intrepid sold 242,000 tons of potash at an average realized price of US$317/ton compared with 185,000 tons at an average price of US$417/ton in the corresponding period of 2013. Potash revenue increased 2% to US$84.5 million. Potash production was essentially flat at 220,000 tons. The company says that customers became more confident in the stability of potash prices early in the first quarter, which helped spur buying. The company also increased its potash sales to industrial markets, including oil & gas, from 14% to 19%. Intrepid produced 32,000 tons of langbeinite in the first quarter and sold 36,000 tons compared with 46,000 tons produced and 39,000 tons sold in the same period of 2013. The average realized price was US$340/ton compared with US$351/ton in the prior year period. Langbeinite revenue decreased 13% to US$14.4 million. The company says that a portion of the production decrease is a result of losses attributed to the ongoing work to improve the conversion of standard-sized material into premium-sized product.

Volume 28 issue 10

Leave a Reply