- Oct. 1 Mosaic will reduce its Louisiana phosphate production facility by half a million tons
- The company plans to reduce supplies to balance the global market—a market that has seen reduced margins in recent months.
- Mosaic is buying $250 million in company shares.
This week, Mosaic announced it will decrease production in its Louisiana operations facility by about 500,000 tons in 2019. Effective Oct. 1, the company is doing this in response to greater imports pushing down the fertilizer’s prices.
According to Reuters, Mosaic is looking to cut costs in a weak global phosphate market.This announcement comes at the heels of two previous announcements stalling potash production in Saskatchewan and permanently closing its phosphates facility in Florida. Click here to see an interactive map of Mosaic’s global footprint.
Reducing phosphate fertilizer inventory, paired with strong fertilizer application in North America means Mosaic expects a “more balanced global supply and demand picture in 2020.”
“Phosphate prices have declined further through the summer, with excess imports continuing to enter the U.S. on top of high channel inventories,” said Joc O’Rourke, president and CEO of Mosaic in a recent press release. “We expect our move to idle production to tighten supply and rebalance the market.”
In addition to idling the Louisiana plant, the company is initiating $250 million in stock repurchases. Rourke says this is the best use of company capital in today’s environment.
Earlier this year the company cut its full-year earnings forecast. Officials cited rain and flooding, which lead to record prevent plant acres, hit phosphate volumes and margins.