When I asked whether 2009 would bring feast or famine to the fertilizer group, there was little question that the first quarter would fall into the latter category. Mosaic
Ammonia sales volumes actually held up, rising a respectable 5% on account of planters playing catch-up after fall applications fell out of bed. Prices, which rebounded dramatically from their recent low, sagged relative to last year, though. UAN, a cocktail of urea and ammonium nitrate, saw just the opposite, with softer volumes but steadier pricing. All told, revenue was off 27%, and earnings dropped 69%.
As natural gas is the key ingredient behind Terra's nitrogen products, the firm is beginning to catch a nice break on those input costs. Only 25% of the next 12 months' natural gas needs are locked into forward purchase contracts, so the longer the price remains depressed by weak demand from Dow Chemical
Last quarter, I noted that Terra sounded pretty optimistic about 2009, at least compared to would-be acquirer CF Industries