Mosaic Q2 Earnings Call Highlights

Sulfur shortages are forcing Mosaic to curtail phosphate production in the U.S. and Brazil, with Louisiana fully idled and some Florida facilities operating at reduced rates. Management warned that persistent supply constraints could sharply reduce global phosphate output and fertilizer application, potentially pressuring crop yields. Mosaic expects third-quarter phosphate volumes to decline to 1.1–1.4 million tons, while sulfur costs rise to approximately $700–$710 per ton. Despite lower sequential stripping margins and higher idle costs, DAP pricing of $820–$840 per ton should keep margins above historical averages. The company is strengthening liquidity and cash flow by cutting SG&A, reducing 2026 capital spending guidance to $1.2 billion, and targeting a $300–$500 million working-capital release. Mosaic also secured a $1 billion term loan to refinance commercial-paper maturities without drawing its $2.5 billion revolving credit facility.

Mosaic NYSE: MOS said it is managing production, costs and liquidity through what Chief Executive Officer Bruce Bodine described as a difficult phosphate market shaped by unusually high sulfur prices and constrained supply. The company has curtailed phosphate production in the United States and Brazil, limiting purchases of high-cost raw materials while maintaining the condition of its assets for an eventual return to higher operating rates. Bodine said Mosaic secured a significant portion of its third-quarter U.S. sulfur needs at prices below the spot market, though still at historically elevated levels.

Mosaic cited the continued closure of the Strait of Hormuz and a Kazakhstan blockade as factors disrupting global sulfur flows. The company said current spot sulfur prices are not economically sustainable for the phosphate industry and have prompted production reductions across the sector.

Bodine estimated that global phosphate production could fall short of last year’s output by as much as 30 million tons if supply constraints persist. He said the lower availability of fertilizer, combined with reduced application rates in prior periods, could affect crop yields and create food-security challenges. In North America, Executive Vice President of Commercial Jenny Wang said Mosaic estimates phosphate application fell nearly 15% below normal last year and could decline another 20% this year. Compared with typical application levels, that would represent a reduction of more than 30% in 2027, she said. In Brazil, Mosaic expects phosphate application to decline by roughly 30% at the nutrient level this year, after application was relatively normal and showed some growth last year. Wang said Mosaic has observed yield pressure in some major Brazilian states despite increased harvest acreage.

The company said it expects phosphate prices to remain near current levels because sulfur-related supply challenges and lower Chinese exports are limiting global availability. Bodine also said the temporary suspension of U.S. countervailing duties on phosphate imports from Morocco has not affected New Orleans prices, as producers can obtain higher netbacks in markets outside the U.S.