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Why Mosaic's Earnings Fell in 1Q17

PART:
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Part 4
Why Mosaic's Earnings Fell in 1Q17 PART 4 OF 5

Realized Prices for Mosaic Continue to Trend Lower in 1Q17

Realized prices

Declining realized prices for fertilizers (MXI) have been concerning investors. Companies such as Intrepid Potash (IPI) have suffered significantly, while PotashCorp (POT), Agrium (AGU), and CF Industries (CF) have worked to lower their costs to protect margins. Let’s look at how Mosaic’s (MOS) realized prices performed in 1Q17.

Realized Prices for Mosaic Continue to Trend Lower in 1Q17

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Falling trend

The realized prices for all three segments show a year-over-year declining trend. Among the three segments, the average realized prices for Mosaic’s Potash segment fell the steepest. They fell 17% year-over-year to $169 per ton from $207 per ton. Under the umbrella of the Potash segment, prices in the international division fell the steepest by ~23% year-over-year to $150 per ton. In contrast, prices in North America rose 2.7% year-over-year to $189 per ton.

Similarly, realized prices for the Phosphate segment also fell year-over-year by 7.9% from $355 per ton. The International Distribution segment prices also fell 1.4% year-over-year.

Mosaic’s guidance

The average selling prices for both potash and phosphates were well within the company’s guidance. The company’s guidance for potash prices ranged between $165 and $180 per ton, while that for phosphate prices ranged between $315 per ton and $335 per ton. However, the spread between these ranges was relatively wide.

Next, we’ll conclude this series with a discussion of the company’s margin performance.

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