(Reuters) — Mosaic expects record-high global phosphate and potash shipments next year despite concerns that weak crop prices will reduce farmers’ fertilizer purchases.
The company’s quarterly profit jumped 63 percent because it sold more phosphate at higher prices.
The world’s largest producer of finished phosphate products said next year’s global shipments look to reach 64.5 to 66.5 million tonnes, up from 64 to 65 million this year.
The company expects global shipments of potash will increase to 58 to 60 million tonnes from 57 to 58 million.
Corn and wheat prices plunged this autumn to multiyear lows amid a huge but delayed U.S. harvest. Those factors have caused farmers to back off on fertilizer purchases, especially of potash and phosphate, U.S. retailers say.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“Yeah, there’s ups and downs, dips and valleys, but the trend is unrelenting,” said Mosaic chief executive officer Jim Prokopanko.
“It is upward.”
AgResource president Dan Basse said lower profitability would lead farmers to reduce their biggest ex-penses, such as seed, nitrogen fertilizer and land.
“We have farmers in the United States this upcoming crop year that will try to get by without using much fertilizer,” Basse said.
Mosaic’s phosphate volumes rose 22.2 percent to 3.3 million tonnes in the third quarter, while net phosphate sales rose 21 percent to $1.7 billion.
The average realized price of diammonium phosphate rose 5.7 percent to $461 per tonne.
Mosaic said in September that it would reduce phosphate production because of rising costs of the raw materials sulfur and ammonia.
The company said its phosphate sales would fall to 2.5 to 2.8 million tonnes in the current quarter from 3.4 million a year earlier, with prices ranging from $430 to $450 per tonne.
Mosaic expects potash sales to rise to two to 2.3 million tonnes this quarter from 1.9 million tonnes. It forecast prices at $275 to $295 per tonne.
