Mosaic, Top US Phosphate Producer, Idles Plants Over Sulfur Costs

The Mosaic Company, the largest phosphate fertilizer producer in the United States, has kept a large part of its production capacity offline since May 2026 because sulfur, the main processing input for phosphate, costs far more than phosphate plants can absorb. The company confirmed on August 4, 2026 that the situation had pushed it into a second consecutive quarterly loss.

Sulfur is burned to make sulfuric acid, which is used to dissolve phosphate rock. Acid represents as much as half of the finished cost of monoammonium phosphate. American producers buy most of their sulfur from domestic oil and gas refiners, but the international market sets the marginal price, and roughly half of all seaborne sulfur comes from countries that ship through the Strait of Hormuz. When the waterway closed after the war between Iran, the United States and Israel began on February 28, 2026, that supply was cut off from world buyers.

The squeeze built through the spring. Mosaic idled two single superphosphate plants in Brazil, at Araxa and Patrocinio, during April 2026. On May 11 the company told analysts that spot sulfur had reached about 1,200 dollars per ton and ammonia about 800 dollars per ton, levels that put marginal phosphate production below variable cost. It cut its Bartow plant in Florida and its Louisiana operations to roughly half of capacity, removing close to two million tons of American phosphate output, or nearly a tenth of national production. Management withdrew its 2026 phosphate production target of more than seven million tons at the same time, while keeping potash guidance at about nine million tonnes.

First quarter results showed the damage. Mosaic reported an operating loss of 373 million dollars and a net loss of 258 million dollars, with adjusted EBITDA of 416 million dollars. Phosphate sales volumes of 1.9 million tonnes were the highest in five years, but raw material costs in the segment rose by about 280 million dollars and gross margin per tonne fell to almost nothing. Potash, which needs no sulfur, stayed profitable with operating earnings of 177 million dollars.

The curtailments deepened rather than eased over the summer. Mosaic pulled back further in Brazil during July. As of the August 5 earnings call, the Faustina plant in Louisiana remains completely idled and Bartow is running at 40 percent of its targeted annual rate. Chief Executive Officer Bruce Bodine said the continuing closure of the Strait of Hormuz and a more recent blockade affecting Kazakh exports were still disrupting sulfur flows, and that spot prices remained at levels the phosphate industry cannot support.

Second quarter figures published on August 4, 2026 confirmed the trend. Revenue fell about 6 percent year on year to 2.8 billion dollars, against 3.0 billion dollars a year earlier. Mosaic swung to a net loss of 273 million dollars, or 86 cents per diluted share, from a profit of 411 million dollars in the same quarter of 2025. Adjusted EBITDA came in at 407 million dollars, down from 566 million dollars. The phosphate segment posted net sales of 1.25 billion dollars but an operating loss of 104 million dollars, compared with a loss of 8 million dollars a year earlier. Phosphate sales volumes dropped to 1.4 million tonnes from 1.9 million tonnes in the first quarter. Cash flow from operations fell to 167 million dollars from 610 million dollars, and free cash flow turned negative at minus 153 million dollars.

Mosaic has responded with cost discipline rather than price hedging alone. Selling, general and administrative expenses fell to 132 million dollars from 167 million dollars a year earlier, full year capital spending was trimmed to 1.2 billion dollars, and the company sold its Carlsbad potash mine in New Mexico. It also settled third quarter sulfur contracts at 705 dollars per long ton, well below prevailing spot levels, which gives some visibility on input costs into the autumn. Idle and turnaround costs, which totalled about 60 million dollars in the second quarter, are expected to rise in the third quarter as more units sit unused.

The consequences reach well beyond one company. Bodine warned in May that global phosphate production would not meet global demand this year, a gap made worse by Chinese export restrictions on phosphate fertilizers that ran at least through August. Farmers in North America and Brazil have cut application rates sharply, which depletes soil phosphorus reserves and weighs on future yields. Washington has reacted on two fronts. In June the White House suspended duties on Moroccan phosphate imports for eight months, or until the declared emergency over fertilizer availability ends, and the administration has increased antitrust scrutiny of the fertilizer sector as prices climb.

Mosaic maintains that the disruption is a market dislocation rather than a structural decline, and says it can return idled units to full rates within weeks once sulfur supply normalises. That timing depends entirely on shipping conditions in the Gulf. The Strait of Hormuz remained effectively closed to commercial traffic in early August 2026, with only a handful of escorted transits per day against a normal flow of dozens. Until that changes, American and Brazilian phosphate capacity is likely to stay throttled, and buyers should plan for constrained availability and firm prices for diammonium phosphate, which Mosaic expects to sell at 820 to 840 dollars per tonne in the third quarter.