High farm incomes mean more fertilizer sales - US Mosaic

29 September 2011 17:38  [Source: ICIS news]

HOUSTON (ICIS)--Strong farm income will translate to strong fertilizer sales and earnings in the year ahead for US fertilizer maker Mosaic, the company's chief executive said on Thursday.

"Accelerating grain and oilseed use and the need to increase acres to meet rising global food demand will continue to lift the need for fertilizers," Mosaic president and CEO Jim Prokopanko said in a conference call.

Mosaic estimates that US farmers will plant 93m-95m acres (37.7m-38.5m ha) of corn in 2012 to help meet global grain requirements.

The US Department of Agriculture estimates that farmers will spend $26.2bn (€19.4bn) for plant nutrients in 2011.

Earlier, Mosaic reported first-quarter fiscal 2012 net income of $526m on revenues of $3.1bn, a 41% increase from $2.2bn in the same period last year

Fall fertilizer applications in North America this year will exceed the record applications made in 2010, Prokopanko said.

Mosaic said Brazilian crop nutrient shipments will be up for the 2012 crop year, with the country importing record amounts of phosphate and potash. Brazil is expected to import 3.6m-3.7m tonnes of phosphate fertilizers and 7.0m-7.2m tonnes of potash in 2012.

In India, a good monsoon has bolstered prospects of big crops and higher fertilizer needs, Mosaic said. India is expected to import 7.7m-7.9m tonnes of phosphate and 6.3m-6.5m tonnes of potash in 2012.

Mosaic predicts China will import 6.0m-6.5m tonnes of potash in 2012.

Mosaic’s sales of phosphates increased to $2.2bn, up 40% over of fiscal 2011. Potash sales totalled $873m, a 40% increase over the same period last year.

Total net sales grew 41% to $3.1bn in the first quarter, while net earnings rose 77% to $526m.

Mosaic's Faustina 500,000 tonne/year ammonia plant in Louisiana is expected to come back on line in October with full production in November. Mosaic needs another 1m tonnes of ammonia purchased on the open market for its phosphate production.

Producing its own ammonia provides a cost advantage in phosphate production of up to $300/tonne, Prokopanko said, adding that Mosaic would like to increase its ability to produce ammonia in-house.

Despite Mosaic's optimistic outlook, its stock fell 5.04% to reach $54.31 as of 12:34 hours New York time (16:34 GMT). Mosaic stock was in the $70s in mid September.

Stocks in other North American fertilizer producers fell as well.

Additional reporting by Al Greenwood

($1 = €0.74)

By: Frank Zaworski
+1 713 525 2653

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