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Mosaic executives said the company is cutting costs, curtailing some phosphate production and reducing capital spending as geopolitical disruptions drive raw material shortages and pressure fertilizer industry margins.
On the company’s first-quarter 2026 earnings call, President and Chief Executive Officer Bruce Bodine said the business climate remains “challenging” and “very dynamic,” with conflicts affecting global phosphate raw material flows. He said volatility in the Persian Gulf has intensified an already tight market, while many producers are struggling to secure key inputs.
“To put it simply, there is not going to be enough phosphate to meet global demand,” Bodine said.
Bodine said about 20% of global phosphate, one-third of urea, one-quarter of ammonia and half of seaborne sulfur volumes originate in the Middle East. Combined with supply tied to the Black Sea region, he said nearly half of phosphate raw materials have been affected by conflicts in Ukraine and Iran.
Mosaic sold 1.9 million tons of phosphate in the first quarter, which Bodine said was the segment’s highest quarterly sales volume in five years. He attributed the increase to deferred demand from late 2025 and Mosaic’s ability to direct product across multiple markets.
Management also pointed to improved performance at its U.S. phosphate assets following investments over the past two years. Bodine said three of Mosaic’s four facilities were operating at targeted rates at the end of the first quarter, while the New Wales facility completed a major planned turnaround in March.
Despite the sales improvement, management said rising sulfur costs and limited availability are forcing Mosaic to revisit its global phosphate production plan. Bodine said the company is partially reducing production rates at Bartow and Louisiana and scaling back additional fertilizer production in Brazil.
“This is a temporary move that allows us to limit the need for incremental sulfur at today’s prices and wait until the market normalizes,” Bodine said.
In response to an analyst question, Bodine said the Louisiana curtailment represents roughly half of that site’s production capacity, while the Bartow reduction is also about half of that facility’s capacity. He said the actions can be quickly unwound if raw material conditions improve.
Chief Financial Officer Luciano Siani Pires said higher phosphate prices and Mosaic’s sulfur supply chain helped the company realize an average sulfur cost of $379 per ton in the first quarter, supporting stripping margins near $400 per ton.
For the second quarter, Pires said Mosaic expects realized sulfur costs of roughly $540 per ton and ammonia costs of roughly $610 per ton in its phosphate segment. Based on DAP pricing guidance of $760 to $780 per ton, he said second-quarter realized stripping margins should exceed $400 per ton for Mosaic’s sales book, 60% of which had already been committed and priced.
Pires emphasized, however, that marginal costs are much higher than the average costs flowing through Mosaic’s inventory. He said marginal sulfur costs are currently about $1,200 per ton and marginal ammonia costs are about $800 per ton, levels that are driving the company’s curtailment decisions.
“Every decision that you’re seeing us taking today is driven by the marginal cost of sulfur,” Pires said.
Management described potash market fundamentals as balanced. Bodine said demand remains robust across major markets, with U.S. growers seeing value in potash at current prices, strong palm oil economics supporting application in Southeast Asia, and China replenishing low inventories after record first-quarter imports.
Bodine also said Canpotex was fully committed through June and on pace for a record 2026. Jenny Wang, executive vice president of commercial, said potash pricing improvements in spot markets such as Brazil should be reflected in later quarters, while North American spring demand produced a “nice price bump.”
The company said its Belle Plaine solution mine benefited from low-cost natural gas, and Esterhazy volumes improved from the fourth quarter. Bodine said costs should decline through the year as HydroFloat and other optimization projects at Esterhazy ramp up, helping offset the impact of running the higher-cost Colonsay mine.
Executives said Brazil remains under pressure from farmer credit constraints and limited nutrient availability. Bodine said Mosaic has been selective in deploying capital, prioritizing higher-quality counterparties and adjusting sales pace while maintaining its market presence.
Wang said Brazil imports about 85% of the NPK nutrients it needs, and the first four months of the year showed reduced imports, especially for nitrogen and phosphate. She said in-country inventories are “extremely low” across nutrients.
Pires said Mosaic’s Brazil distribution margins improved sequentially in the first quarter despite the difficult credit environment and are expected to improve further in the second quarter. He said, however, predicting second-quarter performance is difficult because commodity products such as SSP, MAP and DAP are under pressure from current raw material economics.
Mosaic said it is lowering 2026 capital spending guidance by $250 million to $1.25 billion after reviewing its project portfolio and deferring less time-sensitive projects. Bodine said the revised plan will not affect the company’s longer-term production targets.
The company also initiated a workforce reduction in April expected to generate $50 million in annualized expense savings, including $15 million this year. Bodine said that comes in addition to a previously announced $100 million value capture program.
Mosaic also continues to address non-core assets. The company announced the idling and demobilizing of SSP production at Araxá in Brazil and related mining activity at Patrocínio, and it completed the sale of its Carlsbad potash mine in New Mexico to International Minerals Carlsbad in April.
On working capital, Mosaic reduced phosphate finished goods inventory by about $120 million in the first quarter, though that was largely offset by inventory positioning in Brazil ahead of seasonal demand. Pires said the company still expects a $300 million to $500 million working capital release, with higher raw material costs and curtailments working in opposite directions.
Bodine closed the call by saying current raw material prices are unsustainable and should decline once global trade flows normalize. He said Mosaic is focused on preserving its ability to benefit when phosphate market conditions improve.
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