Mosaic Swings to Loss on Surging Sulfuric Acid Prices

What happened

Mosaic reported a first quarter net loss of $257.6 million, or $0.81 per share, compared to a profit of $238.1 million in the same period of 2025. Adjusted earnings per share fell to $0.05 from $0.49 year-over-year, and adjusted EBITDA declined to $416 million from $544 million. Despite net sales rising to $2.998 billion from $2.620 billion, the company was hit by $323 million of pre-tax notable items, including $442 million of charges related to the idling of its Araxa and Patrocinio facilities. The loss was primarily driven by a $280 million increase in raw material costs within the phosphate segment, as sulfur reached record prices and ammonia also became more expensive. In response, Mosaic has withdrawn its 2026 phosphate production guidance (which had targeted more than 7 million tonnes), initiated partial production curtailments at its Louisiana and Bartow sites, scaled back incremental output in Brazil, and reduced its 2026 capital expenditure guidance to $1.25 billion from $1.5 billion.

Why it matters

The swing to a loss illustrates how rapidly rising input costs can erode profitability even when finished fertilizer prices increase, because the pass-through lag compresses margins. Mosaic's decision to curtail production and cut capital spending signals that sustained input inflation can force producers to reduce supply, which has direct implications for phosphate fertilizer availability and pricing volatility. For investors, the results highlight operational and financial risks when key raw materials-sulfur and ammonia-experience supply disruptions, particularly in a market already stretched by geopolitical factors and export restrictions. The production pullback also underscores the company's near-term challenge in balancing cost control with maintaining market position.

Bigger picture

The global fertilizer market was already tight before the Iran conflict and Chinese export restrictions exacerbated sulfur and phosphate shortages. Disruptions to sulfur flows through the Strait of Hormuz have pushed prices to record levels, creating a supply squeeze that extends beyond Mosaic to the broader phosphate sector. When major producers curtail output due to input cost pressures, it can tighten global phosphate supply at the margin and amplify price volatility across the agricultural supply chain. Higher and more unpredictable fertilizer costs can also influence farm-level purchasing decisions, potentially affecting nutrient application rates and crop choices, with downstream effects on food production costs-though these impacts typically materialise with a lag rather than immediately.

What to watch

Monitor whether sulfur and ammonia prices stabilise or continue to climb, as this will determine if Mosaic can restore profitability and resume normal production levels. Watch for updates on the duration and scale of the curtailments at Louisiana, Bartow, and Brazil, and whether the company reinstates phosphate production guidance later in 2026. Broader industry signals-such as announcements from other phosphate producers on output adjustments or capital spending-will indicate whether the input cost squeeze is sector-wide. Finally, track phosphate fertilizer prices to see if they rise enough to offset input inflation and restore margin pass-through, and keep an eye on any geopolitical developments affecting sulfur supply routes.