Mosaic Co (NYSE:MOS) shares are trading lower on Friday after the company disclosed preliminary fourth-quarter FY25 results.
• Mosaic shares are retreating from recent levels. Why is MOS stock dropping?
Weak Fertilizer Demand
The company states that North American fertilizer demand fell sharply in the fourth quarter, far exceeding typical seasonal declines.
The weak fall applications reflected ongoing pressure on farm economics and an early winter that shortened the application season.
Mosaic says that phosphates faced the greatest strain due to lower affordability versus potash, with regional phosphate shipments down about 20% year over year, while potash demand declined more modestly.
These conditions weighed on Mosaic's results, with fourth-quarter sales volumes of roughly 1.3 million tonnes of phosphate and about 2.2 million tonnes of potash.
Below Expectations Fertilizantes' Volumes
In the fourth quarter, Mosaic adjusted its phosphate production plan and product mix in response to softer demand, redirecting volumes to stronger markets and keeping production roughly in line with the prior quarter.
Weaker sales and higher inventories pressured cash flow, while conditions in Brazil worsened due to tighter credit and increased competition from low-grade phosphate imports from China, weighing on demand and margins.
Consequently, Mosaic Fertilizantes' volumes fell well below expectations, with full-year sales of about 9 million tonnes, flat year over year but reflecting the broader market slowdown.
Outlook
Despite a very weak fourth quarter, the company expects the conditions in 2026 to improve.
Phosphate markets are tightening as spring demand builds and reduced Chinese exports — following extended export restrictions — begin to constrain global supply, already supporting higher prices.
Meanwhile, the company notes that Potash markets remain balanced, with China's early contract settlement improving price stability and underpinning a constructive outlook for Canpotex.
Industry forecasts point to potential record global shipments of both phosphate and potash in 2026, while in Brazil, ongoing credit tightness is expected to be offset by larger planted areas and strong yields, driving fertilizer demand as growers replenish soil nutrients.
Mosaic Potash Carlsbad Sale
In December, Mosaic agreed to sell the Mosaic Potash Carlsbad mine and related assets to International Minerals Carlsbad, LLC for $30 million.
The transaction includes $20 million in cash at closing and $10 million in deferred payments beginning in 2029, with the buyer taking on the site's retirement obligations.
Mosaic plans to release full fourth quarter 2025 earnings results on Feb. 24, 2026.
MOS Price Action: Mosaic shares are down 4.02% at $26.47 at publication on Friday.
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