Business
Mosaic Pulled Guidance as Sulfur Costs Triple
Mosaic posted a $373 million Q1 operating loss and pulled its 2026 forecast after sulfur costs tripled on the Hormuz closure. DAP is at $914 a tonne; every US farmer who did not lock in before February will pay it.
Mosaic posted a $373 million Q1 operating loss and withdrew its full-year phosphate guidance on May 11, after the Strait of Hormuz closure tripled its sulfur costs.
The Fertilizer Institute puts nearly half of global seaborne sulfur on routes through the same strait that collapsed crude futures in late February. Sulfur converts phosphate rock into DAP and MAP, the fertilizers spread on most US corn and soybean acres. The IRGC confirmed closure on March 2.
Mosaic cut operating rates to roughly 50% at Bartow, Florida (2 million tonnes annual capacity) and Faustina, Louisiana (1.4 million tonnes), taking roughly 1.7 million tonnes offline from the annualized US run-rate. Adjusted EPS came in at $0.05 against a $0.23 consensus.
Mosaic held roughly 800,000 tonnes of sulfur inventory when the strait closed. That buffer kept Q1 realized costs at $379 a tonne even as the spot price crossed $1,200. CEO Bruce Bodine on the May 11 call: "There is not going to be enough phosphate to meet global demand."
Brazil gave the earliest read. Mosaic first idled SSP production at Araxá and Fospar on December 16, 2025, as sulfur costs spiked on Gulf tensions, months before the strait physically closed. The Q1 extension of those cuts added $442 million in charges, $328 million noncash, with Mosaic declining to purchase sulfur in Brazil at current prices.
CF Industries and Nutrien, producing nitrogen without direct Gulf sulfur dependence, posted combined Q1 net income of roughly $619 million, up from $388 million a year earlier.
DAP hit $914 a tonne in the first week of May, 16% above a year ago. Farmers who locked in before February carry limited 2026 exposure. Those who did not are paying current prices now, and DTN's analysis projects all corn and soybean growers will face steeper costs in 2027 regardless of what they paid this cycle.
The move from $379 realized in Q1 to $540 forecast for Q2 means the inventory buffer absorbed costs without avoiding them. Farmers paying $914 for DAP are already on the other side of that deferral.
Mosaic's Q2 result arrives in August with Q3 guidance in hand. If realized sulfur costs approach spot price by then, the 2027 corn and soybean input budget closes before most forward orders open.