Potash and Biosciences strength battle severe phosphate production cuts
- High sulfur costs forced Mosaic to severely curtail phosphate production in the U.S. and Brazil.
- Global shipping blockades in the Strait of Hormuz and Kazakhstan keep sulfur spot prices unsustainably high.
- Potash operations remain strong with steady demand and reliable cash flow.
- The Mosaic Biosciences platform is growing rapidly and is on track to double revenues this year.
- Finn's view is cautious because phosphate margin pressure offsets the reliable potash business.
A supply chain squeeze halts phosphate
The Mosaic Company is facing a severe supply chain squeeze. Geopolitical blockades in the Strait of Hormuz and Kazakhstan have driven sulfur prices to unsustainable levels. This forced Mosaic to halt all phosphate production at its Louisiana facility and drastically cut output in Florida and Brazil.
Despite the phosphate pain, other segments are performing well. Potash demand is strong globally, providing steady cash flow. The Mosaic Biosciences platform is also growing rapidly and expects to double its revenues this year. In Brazil, the Fertilizantes segment generated $60 million of EBITDA in Q2 2026 even with curtailed production.
The bull case relies on a resolution to the sulfur blockades and an inflection in crop prices that sparks a surge in fertilizer application. Mosaic also managed to lock in Q3 sulfur supply below spot rates. Until sulfur costs normalize, the bear case is that curtailed production will continue to damage revenue and fixed cost absorption.
Mines, plants, and input costs
Mosaic makes money by mining phosphate rock and potash, turning those raw materials into concentrated crop nutrients, and selling them worldwide. Farmers use these products to improve crop yields. Demand follows crop economics, planted acres, and fertilizer affordability.
The model is capital heavy. Mines and processing plants cost a lot to build and run. This gives Mosaic a barrier to entry, but it also means fixed costs matter. When plants are curtailed, fewer tonnes carry the same fixed cost base.
The biggest vulnerability today is input cost availability. Phosphate requires sulfur and ammonia. With global sulfur flows disrupted, Mosaic has to cut production because the math no longer works at current spot prices, though they did lock in some third-quarter supply below the spot market.
What Mosaic sells
DAP and MAP phosphate fertilizers
Core phosphate products used globally. Production is currently severely curtailed due to high sulfur costs.
MicroEssentials
MicroEssentials is Mosaic's value-added phosphate product. It is part of the Phosphate segment's performance and other category.
Muriate of potash
MOP is Mosaic's main potash product. Potash is currently the company's strongest segment, with strong demand supporting reliable cash flow.
K-Mag and Aspire
These are potash-based specialty products. They add mix and product choice beyond standard MOP.
Mosaic Fertilizantes
Serves Brazil with phosphate and potash fertilizers. Generated $60 million of EBITDA in Q2 2026 despite production curtailments.
Mosaic Biosciences
Sells biological fertilizer complements. The platform is on track to double revenues again this year.
Segment revenue mix
Shares use Q1 2026 operating segment net sales, reflecting the baseline before severe Q2 phosphate curtailments skewed the production mix.
What could break the thesis
Sulfur supply blockades
High impact · High oddsGeopolitical issues in the Strait of Hormuz and Kazakhstan are blocking sulfur flows. If these blockades persist, sulfur spot prices will stay unsustainably high, crippling phosphate margins.
Prolonged production curtailments
High impact · High oddsMosaic is partially or fully curtailing production at Louisiana, Bartow, and Brazil. Curtailments protect cash when margins are poor, but they severely hurt fixed cost absorption.
Crop price weakness delays demand
Medium impact · Medium oddsGlobal under-application of fertilizers continues due to affordability constraints. If crop prices fall or stagnate, farmers may delay buying, softening demand for both potash and phosphate.
Potash loses its safe-haven role
Medium impact · Medium oddsPotash is the strongest segment, but it is still a commodity. Prices can fall if global supply improves or U.S. tariffs on Canadian imports shift trade dynamics.
In one breath
What does The Mosaic Company do?
Mosaic produces and markets phosphate and potash fertilizers. These nutrients help farmers grow crops, and Mosaic sells them through agricultural wholesalers, retailers, and cooperatives.
Why did Mosaic cut phosphate production?
High input costs made production uneconomical. Geopolitical blockades restricted global sulfur supply, pushing spot prices so high that Mosaic had to curtail operations in the U.S. and Brazil.
Is potash enough to fix Mosaic's problems?
Not completely. While Potash is performing well and providing reliable cash flow, the severe curtailments in Phosphate weigh heavily on overall profitability.
