Mosaic (MOS) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool Mon, May 11, 2026 at 11:54 PM GMT+7 42 min read MOS Image source: The Motley Fool. President & Chief Executive Officer — Bruce M. Bodine Senior Vice President & Chief Financial Officer — Luciano Siani Pires Senior Vice President, Global Strategic Marketing — Jenny Wang Bruce M. Bodine: Good morning, and thank you for joining our call. Our message for today is straightforward. The business climate is challenging, but it is allowing The Mosaic Company to differentiate itself by benefiting from our significant advantages and optimizing our capital. I will touch on these topics to begin. First, the business environment was and continues to be very dynamic. Geopolitical events are driving volatility throughout the global phosphate supply chain. Many producers are struggling to secure raw materials, resulting in an already tight market becoming even tighter. Global phosphate prices reflect that shortage, and this has put additional pressure on farm economics. Second, the current environment has allowed The Mosaic Company to differentiate itself. The investments we have made in our U.S. phosphate assets over the last two years are driving higher production rates, with three of our four facilities operating at targeted rates at the end of the first quarter. With a planned turnaround at our largest facility, New Wales, now behind us, our production capability has improved significantly. The Mosaic Company maintains an advantaged geographic position as well as a greater diversity of sources relative to global peers when it comes to sulfur and ammonia supply. But we are not without risk. Raw material prices and availability, especially for sulfur, are forcing us to revisit our production plan. We will discuss this in more detail shortly. But our key message on this topic is that we are making tough but responsible decisions that maintain shareholder value through the current environment without sacrificing our ability to benefit when conditions improve. This leads into my third point, which is that The Mosaic Company remains focused on a disciplined capital allocation and reallocation strategy. In addition to adjusting our operating plan, investing in our phosphate assets and optimizing our strong potash business, we are also shifting capital away from underperforming assets toward better opportunities. Over the last few months, we sold three mines and idled production at underperforming assets, and we are continuing to invest in new opportunities. This is all happening as we manage through the current realities of our business with agility. We have reduced this year s CapEx and are adapting our production outlook to the current market environment, and moving inventory built at the end of last year to improve our working capital position. Before we dive deeper into our business, I would like to spend some time on the broader market. As all of you have seen, the conflict in the Persian Gulf has exacerbated an already stretched global fertilizer market. Roughly 20% of global phosphate, a third of urea, a quarter of ammonia, and half of seaborne sulfur volumes originate in the Middle East. When combined with the product that comes out of the Black Sea, nearly half of all phosphate raw materials have been impacted by the conflicts in Ukraine and Iran. You can see these dynamics in current phosphate benchmark stripping margins, which are under severe pressure despite elevated finished product prices. Compressed margins and limited raw material availability have forced producers to curb production. For example, China has banned phosphate exports through August, and other competitors have significantly curtailed production primarily due to sulfur availability. To put it simply, there is not going to be enough phosphate to meet global demand. Demand for phosphate remains dynamic as well, with diverging trends around the world. In the U.S., farm economics remain challenging, leading to careful nutrient purchasing decisions that impacted spring demand. In Brazil, farmer economics and access to credit remained significant headwinds and availability of nutrients and raw materials is weighing further on Brazilian agriculture. In contrast, demand from key markets in Asia has been stronger. In India, for example, the government has signaled that it will continue to support phosphate imports at today s prices. For regions grappling with affordability, demand disruptions should be temporary. There are real agronomic consequences caused by persistent underapplication. There is no substitute for phosphate, and when application rates are reduced too far or for too long, soil nutrient balances drop and yields are impacted. While those effects may not appear immediately, they have historically been an important driver of demand normalization as growers respond. Shifting to potash, last year s stability has continued in 2026. Market fundamentals remain balanced, with robust demand in all m

Mosaic (MOS) Q1 2026 Earnings Call Transcript

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Mosaic (MOS) Q1 2026 Earnings Call Transcript

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