When we last checked in on Mosaic
It's now pretty clear that Mosaic was right to be positive on the fertilizer rebound, and that the latter company was sandbagging everyone.
That brings us to today, with Mosaic reporting its results for its fiscal third quarter, which ended Feb. 28. Phosphate results were disappointing, but that's a result of turnarounds that lowered production. "The demand is there," in the words of the company's CFO. In the potash business, sales jumped 52% from last year's levels, as farmers resumed more typical buying patterns following 2009's lull. Potash sales prices were 37% lower this year, making the fertilizer much more affordable.
Mosaic reiterated Agrium's characterization of strong phosphate fundamentals, while noting that strong price increases have been met with "some caution." The company also repeated its warning that rising input costs may limit further margin expansion. Potash producer inventories have fallen below the three-year average, which is a pretty amazing reversal from last November.
Even though the fertilizer market has shaped up pretty much the way Mosaic indicated that it would, the shares are slightly down year to date. Only the shares of China Green Agriculture
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 Fool owns shares of China Green Agriculture and has a disclosure policy.