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 (NYSE:MOS) confirmed this with its earnings announcement earlier this month, and now Terra Industries (NYSE:TRA) has stepped up to the podium with its own pronouncement of a plodding quarter.

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 (NYSE:DOW) and other major industrial consumers, the better for folks like Terra and Agrium (NYSE:AGU).

Last quarter, I noted that Terra sounded pretty optimistic about 2009, at least compared to would-be acquirer CF Industries (NYSE:CF). That hasn't changed, with Terra forecasting "much stronger earnings" next quarter. In particular, Terra expects its differentiated UAN product -- one of the cornerstones of its argument against a merger with CF -- to really shine. I see no evidence to the contrary, and with its $1 billion cash pile, Terra looks to be on very solid footing going forward.

Terra ranks a formidable four stars in Motley Fool CAPS. So, does it outperform or underperform the market from here? Pitch in your own prognostication right here.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.