The Mosaic Company has moved to curtail phosphate production and cut capital spending as surging raw material costs and geopolitical disruption squeeze margins, despite robust underlying demand.
Speaking on its Q1 2026 earnings call, CEO Bruce Bodine described the current environment as “very dynamic”, with conflict in the Persian Gulf and ongoing disruptions linked to Ukraine tightening global supply chains for key inputs such as sulfur and ammonia.
These disruptions – combined with China’s export restrictions and broader supply constraints – have left “not enough phosphate to meet global demand”, even as elevated input costs have compressed producer margins and strained farmer economics.
In response, Mosaic is partially curtailing production at key U.S. facilities and scaling back output in Brazil, while keeping capacity ready to restart once conditions improve.
Strong volumes mask operational strain
Operationally, the company saw some bright spots. Phosphate sales reached 1.9 million tonnes in Q1, the highest quarterly level in five years, driven by the return of deferred demand from late 2025.
Investments in U.S. phosphate assets also delivered improved production performance, with three of four facilities operating at targeted rates following upgrades and the completion of a major turnaround at the New Wales plant.
However, soaring raw material costs – particularly sulfur, which management said was reaching unsustainable levels – have undermined profitability and forced a rethink of production plans.
Potash resilience offsets phosphate weakness
Mosaic’s potash segment provided relative stability, with demand remaining strong across key markets including North America, Southeast Asia and China.
Management highlighted balanced global supply-demand fundamentals for potash, contrasting with the tight and volatile phosphate market.
By contrast, Brazil remains a challenging market, with weak farm economics, limited credit availability and constrained nutrient imports expected to drive a contraction in fertiliser use in 2026.
Cost discipline and portfolio reshaping
To navigate the downturn, Mosaic is taking decisive action to preserve cash and improve efficiency.
The company has reduced 2026 capex by $250 million to $1.25 billion, launched workforce reductions expected to deliver $50 million in annual savings, and idled underperforming assets in Brazil.
It has also completed the sale of its Carlsbad potash mine in the US, as part of a broader strategy to reallocate capital towards higher-return opportunities.
Biosciences platform emerges as growth pillar
Alongside these near-term measures, Mosaic used the call to underline its longer-term push into biologicals, positioning its Mosaic Biosciences platform as a key pillar of future growth.
The company said Biosciences is growing rapidly despite challenging farm economics, with plans to launch eight to ten new products in 2026, including two already introduced in the first quarter.
Revenue from the platform is expected to double again this year, reflecting increasing commercial traction.
Mosaic framed these biological solutions as complementary to its fertiliser portfolio, focused on improving nutrient use efficiency, enhancing crop performance and supporting more sustainable farming systems.
In line with peers navigating margin pressure
Mosaic’s results broadly mirror trends seen across the fertiliser sector, where companies are grappling with input cost inflation despite resilient demand. Yara has similarly pointed to margin pressure from higher energy and raw material costs, while Nutrien has emphasised operational flexibility and cost discipline to manage volatility. CF Industries, more exposed to nitrogen markets, has benefited from relatively stronger pricing but continues to highlight geopolitical risks and gas price dynamics.
Against this backdrop, Mosaic’s focus on curtailing uneconomic production and preserving cash aligns with industry-wide efforts to protect margins, while its investment in biologicals reflects a growing consensus among fertiliser majors that future growth lies in integrated crop nutrition and value-added solutions.
Temporary disruption, long-term optimism
Despite current headwinds, Mosaic struck an optimistic tone on longer-term fundamentals.
Management expects today’s supply disruptions and cost inflation to ease over time, with under-application of fertiliser likely to drive a rebound in demand as soil nutrient balances decline and crop yields are affected.
“We are managing with speed and agility… without sacrificing our ability to benefit when business conditions improve,” Bodine said.
For now, however, the company’s outlook hinges on one key variable: the availability and affordability of sulfur – highlighting the extent to which input markets, rather than demand, are driving the fertiliser sector in 2026.
