As bright as the medium- to long-term picture looks for the sector, business for fertilizer producers like Mosaic (NYSE:MOS) kind of stinks right now.

For the fiscal third quarter ended in February, Mosaic reported earnings of $0.13 per share on sales of $1.38 billion. Both numbers came in well short of Wall Street estimates, and the earnings line would have come in far lower without a big foreign exchange boost -- currency translation gains made up more than half of net income.

The phosphate segment operated at a loss for the quarter, with pretty much every factor imaginable working against Mosaic and other producers like Agrium (NYSE:AGU) and CF Industries (NYSE:CF). Lower sales volumes? Check. Lower sales prices? Check. Higher raw material costs? Yep, that too.

Hang on. Didn't I tell you raw material inputs were plunging in January? I did indeed. So how did Mosaic still get socked with higher costs on things like sulfur? With phosphate moving at a snail's pace (volume down 50% versus last year), the company is working off older, higher-cost inventories more slowly than it normally would. Fortunately, with some demand coming back in recent weeks, Mosaic can soon look forward to both lower raw material costs and lower unit costs as volumes pick up again.

The potash market is experiencing a slightly different dynamic. The game of chicken described last quarter continues, with buyers remaining on the sidelines. The key difference has to be the efforts by PotashCorp (NYSE:POT) and others to hold the line on pricing. We saw one producer blink, cutting Brazilian importers a break in early March. But on balance, potash pricing has held up far better than the rest of the fertilizers. Note how Mosaic's prices remained 156% higher than last year.

On the conference call, management noted that current buying behavior indicates as much as 30% lower potash application by North American farmers. That could make for some soft spring results, hence the flat sequential sales guidance offered in the press release. While there's still time for a last-minute surprise capitulation, I wouldn't expect fireworks for Mosaic or Intrepid Potash (NYSE:IPI) in the immediate future.

Mosaic is the only potash player currently sporting a five-star rating in Motley Fool CAPS, our community of Foolish stock pickers. See what others have to say, and share your own opinion of the fertilizer ace, 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.