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    MOS
    Earnings call· Mar 2026(Q1 FY26)

    MOSAIC Q1 FY26 earnings call MOS

    May 11, 2026 Source

    Executive summary

    The Mosaic Company Q1 FY26 — Navigating Challenging Phosphate Markets with Strategic Capital Optimization

    The Mosaic Company navigated a challenging Q1 FY26 marked by geopolitical volatility and raw material supply constraints, particularly in the phosphate market. The company is differentiating itself through optimized U.S. phosphate assets and a disciplined capital allocation strategy, including CapEx reductions and non-core asset divestitures. While facing near-term production curtailments due to unsustainable sulfur prices, Mosaic remains focused on long-term opportunities, including Biosciences growth and rare earth element extraction, positioning for an eventual market recovery.

    Highlights

    4

    • Phosphate sales volume reached 1.9 million tonnes in Q1 FY26, the highest in 5 years, reflecting broad market access.

    • Three of four U.S. phosphate facilities (Bartow, Riverview, Faustina) achieved phosphoric acid operating rates at or above 80% in Q1 FY26.

    • Mosaic Biosciences revenue expected to double again in FY26, with 2 new products launched in Q1 FY26.

    • Workforce reduction initiated in April 2026 expected to generate $50 million in annualized expense savings, with $15 million realized this year.

    Concerns

    4

    • Global phosphate market facing severe pressure due to geopolitical events impacting raw material supply (sulfur, ammonia) and driving up costs.

    • U.S. and Brazil farm economics remain challenging, leading to careful nutrient purchasing decisions and impacting spring demand.

    • Spot sulfur prices imply compressed Q3 stripping margins, leading to partial production curtailments at Bartow and Louisiana phosphate facilities.

    • Working capital release of $300M-$500M is now subject to opposing forces: curtailments increasing release, but higher raw material prices reducing it.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Capital Expenditure
    $1.25 billion
    high materiality
    High
    Annualized Expense Savings from Workforce Reduction
    $50 million
    medium materiality
    High
    Mosaic Biosciences Revenue Growth
    double again
    low materiality
    High
    Phosphate Segment Realized Sulfur Costs
    roughly $540 per tonne
    high materiality
    High
    Phosphate Segment Realized Ammonia Costs
    roughly $610 per tonne
    high materiality
    High
    Phosphate Segment DAP Pricing
    $7.60 to $7.80 per tonne
    high materiality
    High
    Phosphate Segment Realized Stripping Margins
    in excess of $400 per tonne
    high materiality
    High
    Mosaic Fertilizantes Annual Maintenance CapEx Savings
    $20 million to $30 million
    medium materiality
    High
    Working Capital Release
    $300 million to $500 million
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Phosphate
    Achieved highest quarterly sales volume in 5 years. Three of four facilities met phosphoric acid operating rate targets. New Wales completed an extensive planned turnaround in March. Product mix shifted towards higher MAP and DAP sales, impacting unit COGS due to higher phosphoric acid content.
    Sales Volume: 1.9 million tonnesPhosphoric Acid Operating Rates (Bartow, Riverview, Faustina): at or above 80%Average Cost of Sulfur: $379 per tonneAverage Cost of Ammonia: $626 per tonne
    		———near $400 per tonne stripping margins
    Mosaic Fertilizantes (Brazil)
    Managed through challenging credit environment and sulfur cost dynamics, with Q1 performance better than expected. Distribution business differentiated through careful risk management. Idled SSP production at Araxa and related mining at Patrocinio, resulting in $442 million in charges ($328 million non-cash).
    		———improved distribution margins sequentially

    Operational metrics

    17
    Phosphate Sales Volume
    1.9 million tonneshighest in 5 years
    Q1 FY26

    Reflects deferred demand from end of 2025 and broad market access.

    Phosphate Finished Product Volumes Target
    1.8 million to 2 million tonnes
    per quarter

    Previous target for finished product volumes, with phosphoric acid rates being a significant hurdle.

    Phosphoric Acid Operating Rates
    at or above 80%in line with targets
    Q1 FY26

    Indicates real improvements in U.S. phosphoric acid rates.

    Phosphate Stripping Margins
    near $400 per tonne
    Q1 FY26

    Realized due to dedicated sulfur supply chain and delay in higher-priced sulfur flowing through inventories.

    Average Cost of Sulfur
    $379 per tonne
    Q1 FY26

    Enabled by dedicated sulfur supply chain in the Gulf and inventory flow.

    Average Cost of Ammonia
    $626 per tonne
    Q1 FY26

    Reflects rising prices on settled monthly contracts and impact of turnarounds affecting mix.

    Florida Cash Mining Costs
    $63 per tonnesomewhat higher
    Q1 FY26

    Resulted from increased overburden in the new Eastern extension area of South Fort Meade, with expected improvement as the year progresses.

    Phosphate Finished Goods Inventory Decline
    $120 million
    Q1 FY26

    Resulted from selling 1.9 million tonnes of phosphate products above production, contributing to working capital release.

    Total Working Capital Increase
    modestly highercompared to an increase of roughly $400 million in Q1 FY25
    Q1 FY26

    Offset by Brazil inventory build and higher input costs, despite phosphate finished goods inventory decline.

    Workforce Reduction Annualized Expense Savings
    $50 million
    Annualized

    Initiated in April, in addition to the $100 million value capture program announced last year.

    Charges from Araxa and Patrocinio Idling
    $442 million
    Q1 FY26

    Associated with the decision to idle SSP production and related mining activity. This decision was contemplated before recent sulfur disruptions.

    Mosaic Biosciences Revenue Growth
    double again
    FY26

    Indicates rapid growth despite financial pressure on farmers, with 8-10 new products expected to launch in 2026.

    Sulfur Inventory
    30 days
    current

    Refers to raw sulfur inventory. An additional 400,000 tonnes of sulfur are typically in finished goods inventory.

    Marginal Cost of Sulfur
    $1,200 per tonne
    current

    This marginal cost drives production decisions, making marginal stripping margins below variable costs.

    Marginal Cost of Ammonia
    $800 per tonne
    current

    This marginal cost drives production decisions, making marginal stripping margins below variable costs.

    Potash FOB Mine Price (low end)
    $260flat for 3 quarters
    Q1 FY26

    Refers to the lower end of the GAAP guidance for potash prices.

    Phosphate Production
    1.65 million tonnessteady for 3 quarters
    per quarter

    Refers to the steady production level observed over the past three quarters.

    Industry KPIs

    1
    MetricValueDetails
    Productivity cost savings program$100 millionUSD

    Product announcements

    1
    ProductTypeDetails
    New Biosciences Productslaunch

    Deals & partnerships

    2
    International Minerals CarlsbadSale of Carlsbad potash mine

    Completed the sale of the Carlsbad potash mine in New Mexico to International Minerals Carlsbad in April.

    Rainbow Rare EarthsProject development agreement for rare earth elements extraction

    Announced a project development agreement for the Uberaba gyp stack in Brazil to recover rare earth elements from phosphogypsum.

    Capital programs

    4
    New Wales Turnaroundcompleted

    Benefit: higher phos acid rates

    Completed a very extensive planned turnaround in March, which should allow for higher phos acid rates from that plant in the future.

    South Fort Meade Eastern Extensionunderway

    Benefit: defers need to construct new mine and beneficiation plant

    Moved all 3 drag lines to the new Eastern extension and performed a turnaround at the mine's beneficiation plant. This defers the need for a new mine and plant.

    Hydrofloat Project and Esterhazy Optimizationsunderway

    Benefit: drive cost meaningfully lower

    The ramp of hydrofloat project and other optimization projects at Esterhazy are expected to drive cost meaningfully lower as we move through the year.

    Uberaba Gyp Stack Rare Earths Projectadvancing

    Benefit: recover rare earth elements from phosphogypsum

    Announced a project development agreement with Rainbow Rare Earths, following a positive economic assessment. Evaluating similar opportunities in the U.S.

    Risks & headwinds

    5
    Geopolitical events impacting raw material supplyOngoing, near-term

    Roughly 20% of global phosphate, 1/3 of urea, 1/4 of ammonia and 1/2 of seaborne sulfur volumes originate in the Middle East. Nearly half of all phosphate raw materials impacted.

    Mitigation: Diversified raw material sources, adjusting operating plans, temporary production curtailments.

    High spot sulfur prices and compressed stripping marginsQ2 FY26 and potentially Q3 FY26

    Spot sulfur prices imply compressed Q3 stripping margins that are well below Q1 realizations. Marginal cost of sulfur at $1,200 per tonne, ammonia at $800 per tonne, making marginal stripping margins below variable costs.

    Mitigation: Partially reducing production rates at Bartow and Louisiana, scaling back Brazil fertilizer production, preserving Q2 sulfur for longer, waiting for market normalization.

    Challenging farm economics and farmer affordabilityNear-term

    Impacted spring demand in the U.S. and Brazil. Leads to careful nutrient purchasing decisions.

    Mitigation: Positioning product where needed, focusing on long-term fundamentals of nutrient replenishment and eventual improvement in ag commodity prices.

    Raw material availability in BrazilQ2 FY26 and potentially Q3 FY26

    Brazil needs to import 85% of NPK; first 4 months saw reduction in nitrogen and phosphate imports. In-country inventory is extremely low.

    Mitigation: Selective deployment of capital, prioritizing higher-quality counterparties, adjusting sales pace, idling underperforming SSP production.

    Uncertainty in cash flow generationRemainder of FY26

    Higher raw material prices pressure working capital (raw materials and finished goods inventory).

    Mitigation: Diligence on cost savings initiatives ($50 million annualized from workforce reduction), lower CapEx budget ($1.25 billion for FY26), managing working capital (aiming for $300M-$500M release).

    What to watch in Q2 FY26

    5

    Sulfur Price Normalization

    Next quarter
    CurrentMarginal cost at $1,200/tonne
    TargetLower, more normalized levels

    Why it matters

    Sulfur price and availability are the biggest drivers of Mosaic's production decisions and profitability in the phosphate segment.

    Make no mistake, sulfur availability and subsequent affordability are the biggest things driving our view from a Mosaic standpoint on where we can participate and what we can produce to participate.

    Q&A highlights

    6

    Can you provide an updated directional range for working capital release, considering changes in production guidance and raw material prices?

    The previous estimate of $300 million to $500 million working capital release for the year still stands, but it's influenced by two opposing forces: higher raw material prices (sulfur, ammonia) tend to reduce the release, while production curtailments tend to increase it. Q1 saw a $120 million release from phosphate finished goods, partially offset by seasonal inventory build in Brazil and higher input costs.

    “So the $300 million to $500 million pretty much continues to be our estimate for release.”

    asked by Justin Pellegrino · answered by Luciano Pires

    2 min read6 chapters

    Detailed Narrative

    01

    Geopolitical Impact on Global Fertilizer Markets

    Geopolitical events, particularly the conflict in the Persian Gulf, have significantly impacted the global fertilizer market. Roughly 20% of global phosphate, 1/3 of urea, 1/4 of ammonia, and 1/2 of seaborne sulfur volumes originate in the Middle East. Combined with Black Sea disruptions, nearly half of all phosphate raw materials have been affected, leading to an already tight market becoming even tighter and exacerbating supply chain volatility🌐.

    02

    Phosphate Market Dynamics and Production Adjustments

    Global phosphate prices are elevated due to shortages, but stripping margins are under severe pressure from high raw material costs, especially sulfur. China has banned phosphate exports through August, and other producers have curtailed production. Mosaic is partially reducing production rates at its Bartow and Louisiana facilities and scaling back fertilizer production in Brazil to limit exposure to high spot sulfur prices and manage inventory, a temporary measure to be unwound when conditions improve.

    03

    Potash Business Stability and Outlook

    The potash market remains balanced with robust demand across major markets. U.S. growers see good value, and Southeast Asia demand is strong due to attractive palm oil prices. China's imports set a record in Q1 FY26 to replenish low inventories. Canpotex is fully committed through June, indicating tight inventories through Q2 FY26. The ramp-up of the hydrofloat project and other optimizations at Esterhazy are expected to drive costs lower, offsetting the impact of running the higher-cost Colonsay mine.

    04

    Capital Allocation and Portfolio Optimization

    Mosaic is focused on disciplined capital allocation, shifting capital from underperforming assets. This includes selling 3 mines, idling SSP production at Araxa and Patrocinio (resulting in $442 million in charges, $328 million non-cash), and selling the Carlsbad potash mine. The company has also reduced its FY26 CapEx guidance by $250 million to $1.25 billion and initiated a workforce reduction for $50 million in annualized savings.

    05

    Biosciences and Rare Earth Elements Growth Opportunities

    Mosaic Biosciences continues rapid growth, with revenues expected to double again in FY26, supported by 8-10 new product launches. The company is also advancing a long-term opportunity in rare earth elements, having announced a project development agreement with Rainbow Rare Earths for extraction from the Uberaba gyp stack in Brazil, with similar opportunities being evaluated in the U.S.

    06

    Brazil Market Challenges and Strategic Response

    Brazil faces a challenging credit environment and raw material availability issues, leading to an expected contraction in fertilizer use in FY26. Mosaic Fertilizantes is managing through these dynamics by prioritizing higher-quality counterparties and adjusting sales pace. The idling of Araxa and Patrocinio is expected to improve operating margins and generate $20 million to $30 million in annual maintenance CapEx savings, reflecting a strategic shift away from challenged SSP production.

    AI-generated summary of the company’s earnings call. Not investment advice.