U.S. fertilizer producer CF Industries reported lower fourth quarter profit on Tuesday, and said costs of its nitrogen capacity expansion had risen by 10 percent.
A drop in crop prices to multi-year lows last year and delayed U.S. harvest was expected to reduce fertilizer use. Given the shortened fall season to apply fertilizer last year, a significant volume of nitrogen needs to be applied in the first half of 2015 to catch up, CF said in a statement.
Nitrogen expansion projects in Louisiana and Iowa now look to cost $4.2 billion, up from $3.8 billion, after CF factored in higher cost estimates for construction materials and labor in Iowa.
Net earnings fell to $238.3 million or $4.82 per share from $325.8 million or $5.71 per share a year earlier.
Net nitrogen sales for the Deerfield, Ill., company rose 3 percent to $1.2 billion despite lower sales volume, buoyed by higher selling prices.
CF said it expects U.S. farmers to plant 90 million acres of corn, a crop that consumes a lot of fertilizer. In 2014, U.S. farmers planted 90.6 million, according to U.S. Department of Agriculture.