Mosaic Co

Demystifying the cost curve Earlier in this series, we saw that prices of nitrogen have fallen over the years, despite its significance in crop growth and feeding the vast population. The lower prices are due to a flatter cost curve, which we’ll explain in this part. Flat cost curve In the chart above, we compare a […]

The gross margin rate for Mosaic’s Phosphate segment fell significantly in 2Q16, to 10% from 21% in 2Q15.

Fertilizer prices are one of the key drivers for fertilizer stocks. So investors and analysts watch fertilizer prices closely.

In 2014, the cost of production for DAP per ton ranged from $190 to $450 per metric ton, as we can see in the chart.

The Mosaic Company (MOS), which acquired CF Industries’s (CF) phosphate business in 2014, is the largest producer of phosphate globally.

To date, the median valuation of fertilizer stocks is around 7.9x. That’s at the midpoint of the nine-year average of 8.2x.

Investors in the fertilizer industry (XLB) must actively track the relationship between crop prices and fertilizer prices. This, in turn, impacts agricultural chemical companies.

Israel Chemicals, which shipped 0.5 million metric tons during the recent quarter, saw the largest jump in shipment growth—20% year-over-year.

Ammonia is used to make phosphate fertilizers like DAP (diammonium phosphate) and MAP (monoammonium phosphate).

Last, average MAP prices in Brazil inched up to $353 per metric ton from $352 per metric ton the previous week.

MAP (monoammonium phosphate) is the second-most used phosphate fertilizer after DAP (diammonium phosphate).

Mosaic’s Potash segment generated $2.5 billion in net sales, excluding intersegment sales, in 2015. This accounted for 28% of the company’s total net sales.

Fertilizer prices and input costs affect all players in the industry. Survival and profitability come down to where a company stands on the cost curve.

Mosaic purchases certain raw materials at fixed costs to be consumed over time, but the selling prices of its finished goods can fluctuate rapidly.

Mosaic doesn’t sell directly to farmers. Its customers include cooperatives, wholesale distributors, retail chains, and independent retailers.

In the 2010–2011 planting season, phosphate fertilizers accounted for about 23% of total NPK fertilizers consumed globally.

Fertilizer prices have fallen significantly over the years. But more recently, prices are showing a trend reversal for urea, UAN, and phosphate fertilizer.

As of February 19, CF Industries pays a quarterly dividend of $0.3 per share. In 2015, it paid an annual dividend per share of $3.6—down from $5 in 2014.

As of January 19, 2016, the VanEck Vectors Agribusiness ETF (MOO) returned -12.7% in 2015. YTD as of January 19, the ETF is down by 8%.

Unlike other companies, CVR Partners (UAN) uses petroleum coke, or pet coke, to produce nitrogen fertilizers.

CF Industries’ cash flow to capital expenditure ratio has been falling. CF Industries’ cash flow to capital expenditure ratio stands at 0.75 as of 3Q15.

Uralkali’s move towards a volume-over-price strategy in order to gain market share (more like taking back market share) was the more important story.

The United States is the biggest user of corn, consuming 265 million mt (metric tonnes) of corn in 2012—equivalent to 26% of global consumption.

In its recent earnings call, Uralklali highlighted its new strategy, called the Revenue Maximization Strategy.

In this series, we’ll explore Mosaic Co.’s latest discussions on its third quarter 2013 earnings results and the industry outlook.

The Essential Fertilizers Weekly series comprises key factors that have a potential impact on the bottom line—depending on revenue and expenses.

The importance of the bottom line The performance of any investment over the medium to long term depends on current or future changes in the bottom line, like earnings per share, free cash flow per share, EBITDA (earnings before interest, tax, depreciation, and amortization) per share, and dividend per share. When the bottom line is […]

Main companies traded on the US market There are six main fertilizer producers that are widely traded on the US stock exchange: CF Industries Holdings Inc. (CF), Agrium Inc. (AGU), Mosaic Co. (MOS), Potash Corp. (POT), Terra Nitrogen Company LP (TNH) and Intrepid Potash Inc. (IPI). While they all operate producer fertilizers, each are exposed […]

Where potash is found Of all the fertilizer sub-industries, potash is the most concentrated. Mineral deposits of potash are more geographically concentrated than phosphate rock. Most of these resources are found in Canada, Russia, and Eastern Europe. Because of this, a large chunk of the world potash supply is controlled by companies like Potash Corp. […]

The phosphate industry is less competitive than the nitrogen industry Unlike nitrogen-based fertilizers, the production of phosphate and potash fertilizers begins in mines. Mineral deposits for the latter two fertilizers are much scarcer and are usually concentrated in specific regions around the world. Because of this, there are fewer firms that make up the two […]

Fertilizers are used in the agriculture industry to improve the yield farmers receive. The three main types of nutrients or fertilizers are nitrogen, phosphate, and potash.

As a critical part of economic and social welfare, agriculture is a key industry governments around the world support.

Introduction Most often, investors expect new capacity addition plans as a positive indicator of booming business. This is because companies often increase their capacity following a period of demand boom. But capacity increases can be negative, as we saw with several fiber optics companies back during the tech bubble, when earnings plummet on falling demand […]