Mosaic: Here’s Our Strategy to Deal with the Oversupply in Potash
Weakening prices have finally forced Mosaic Company (NYSE:MOS) to pull back on potash production. On Friday, the fertilizer producer announced that production from February through May would be cut 20 percent. The move follows December’s cutback in phosphate production and puts Mosaic more in line with its competitors.
Cuts were also recently announced by Potash Corporation of Saskatchewan (NYSE:POT) that it had reduced production by 1.3 million tons, though the company says it will expand production from 11 million tons to 17 million tons by 2015. Uralkali, the Russian fertilizer producer, has also indicated a production cutback.
Fertilizer producers see the situation as a temporary oversupply and are still expecting new sales records for potash to be set this year.
Here’s how these stocks are trading now:
Potash Corp. of Saskatchewan, Inc. (NYSE:POT): POT shares recently traded at $47.22, down $0.04, or 0.08%. They have traded in a 52-week range of $38.42 to $63.97. Volume today was 4,787,346 shares versus a 3-month average volume of 8,007,170 shares. The company’s trailing P/E is 13.44, while trailing earnings are $3.51 per share.
Mosaic Co. (NYSE:MOS): MOS shares recently traded at $57.61, up $0.5, or 0.88%. They have traded in a 52-week range of $44.86 to $89.24. Volume today was 2,525,664 shares versus a 3-month average volume of 5,318,390 shares. The company’s trailing P/E is 10.99, while trailing earnings are $5.24 per share.