MOS Gains From Healthy Fertilizer Demand and Cost-Cutting Actions

The Mosaic Company MOS is benefiting from favorable demand for phosphate and potash, high-return investments, and actions to improve its cost structure, further supported by an uptick in fertilizer prices.Mosaic, which is among the prominent players in the fertilizer space along with Nutrien Ltd. NTR, CF Industries Holdings, Inc. CF and Intrepid Potash, Inc. IPI, is gaining from the strong demand for fertilizers, aided by favorable agricultural conditions. Attractive farm economics continue to drive demand for fertilizers globally. Farmer economics remain favorable in most global growing regions due to strong crop demand and affordable inputs. The phosphate market is benefiting from higher global demand and low producer and channel inventories. Strong demand and supply tightness have also led to an uptick in phosphate and potash prices this year. Demand for grains and oilseeds remains high globally. Improved farmer affordability is also likely to continue to drive demand for fertilizers. Improved crop prices have also incentivized fertilizer application by growers. In North America, strong yields and growers’ need to replenish soil nutrients have ushered in a favorable environment. Demand in Brazil is also expected to be driven by healthy grower economics and low levels of inventories. Low inventory levels and pent-up purchases, backed by increased government support, are also expected to drive demand in India. MOS expects fertilizer markets to remain favorable through 2025, supported by strong demand and tight supply.MOS’s actions to improve its operating cost structure through transformation plans are expected to boost profitability. It remains on track with its cost-reduction plan, which is now expected to drive $250 million in run-rate cost reductions by the end of 2026, having already achieved $150 million in cost reduction targets. The additional cost reductions are expected to be realized through optimization of the supply chain, automation of administrative functions, absorption of fixed costs and operational cost cuts. MOS also remains committed to carrying out investments with high returns and moderate capital expenditures. It has completed the 800,000-ton MicroEssentials capacity conversion, with volumes expected to rise 25% in 2025. The Esterhazy Hydrofloat project, which added 400,000 tons in milling capacity, is complete and produced the first potash tons in July 2025, with a ramp-up expected by the end of the year. Hydrofloat will enable Mosaic to produce low-cost potash tons. The construction of a new blending and distribution center in Palmeirante, Brazil, was also completed in July 2025, supporting the company’s long-term growth objectives in Brazilian agriculture markets. The facility is expected to enable Mosaic Fertilizantes to increase overall sales by 1 million tons.MOS generates substantial cash flows, which enable it to finance its strategic growth investment, pay down debt and drive shareholder value. The company generated an operating cash flow of $610 million and a free cash flow of $305 million in the second quarter of 2025. It expects to generate stronger cash flow in the second half of 2025, allowing debt reductions and shareholder returns through dividends and buybacks.  For full-year 2025, MOS expects phosphate production volumes to range between 6.9 million and 7.2 million tons, while potash production is projected at 9.3 million to 9.5 million tons. Mosaic Fertilizantes sales volumes are anticipated to be at the bottom end of the 10-10.8 million ton range. Another fertilizer heavyweight, Nutrien, expects potash sales volume in the band of 13.9–14.5 million tons for 2025, driven by anticipated higher global demand. Nitrogen sales volumes are forecast at 10.7–11.2 million tons, factoring in lower ammonia operating rates in the second half due to planned turnarounds at North American plants, following record rates in the first half.  NTR sees phosphate sales volumes in the range of 2.35–2.55 million tons, supported by improved operating rates and sales following the completion of first-half turnarounds. CF Industries, in the second-quarter call, said that it expects the global nitrogen supply-demand balance to remain favorable. This is driven by strong demand through the end of 2025, especially from Brazil and India. Brazil is projected to import more than 5 million metric tons of urea, supported by high corn planting, while India’s urea stocks are about 35% lower than last year, prompting frequent tenders, per CF. Intrepid Potash saw a 25% increase in potash sales volumes to 69,000 tons in the second quarter. The solid increase in Intrepid Potash’s sales volumes was driven by a rise in production. IPI targets potash production of 270,000-280,000 tons for full-year 2025.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CF Industries Holdings, Inc. (CF): Free Stock Analysis Report The Mosaic Company (MOS): Free Stock Analysis Report Intrepid Potash, Inc (IPI): Free Stock Analysis Report Nutrien Ltd. (NTR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks