Last quarter, Mosaic's
Average phosphate prices peaked at more than $1,000 per metric ton for the second fiscal quarter, but sales volume of the fertilizer fell almost in half. Prices reversed course late in the quarter, and judging by the price collapse in raw-material inputs such as sulphur and ammonia, they have a lot of room to fall.
On its conference call, management described the current market dynamics as a game of chicken. Whereas farmers in the likes of Brazil appear to be struggling with access to credit (bad news for equipment suppliers such as AGCO
Unfortunately, the more that phosphate producers such as Mosaic, Agrium
That's what commodity cycles do -- they sow their own seeds of recovery and decline. Mosaic has no illusions about the nasty quarter to come -- the company expects to experience an operating cash outflow. But come springtime, we might see a bit more spring in the fertilizer maker's step.