IN response to current crop nutrient market conditions primarily related to delayed fertilizer purchases in Brazil and North America, The Mosaic Co. announced that it will reduce potash production by extending maintenance downtime at its Colonsay, Sask., mine and maintaining planned slower production in its phosphate business.

Since the company announced its third-quarter guidance Aug. 4, domestic and international crop nutrient markets have softened. Currency volatility, lower grain and oilseed prices, political and economic uncertainty and global equity market declines have adversely affected market sentiment, Mosaic explained.

"The long-term positive outlook for crop nutrient demand has not changed, but the industry faces some near-term challenges in the current environment," Mosaic president and chief executive officer Joc O'Rourke said. "In these times, we will continue to be diligent in looking for opportunities to create shareholder value. It is a time for leadership, and we are managing our production levels to match current demand, controlling our costs and maintaining our discipline."

In light of current market sentiment, the company said volumes are lower than expected, and prices have weakened. Mosaic's reduced production is expected to impact per unit costs and segment margins. As a result, the company has provided the following updates to its third-quarter guidance:

* Phosphate volumes are expected to be at the low end of the previously communicated range of 2.1-2.4 million metric tons. The average diammonium phosphate selling price is expected to be in the upper half of the previously provided range of $435-455/mt. The Phosphates segment's margin rate still is expected to be in the low 20% range.

* Potash volumes are expected to be in the bottom half of the previously communicated range of 1.6-2.0 mmt. The muriate of potash average selling price is expected to be in the bottom half of the previously announced range of $260-280/mt. As a result of these developments and lower operating rates, the company said its Potash segment's gross margin rate is now expected to be in the high teens, compared to the prior guidance in the low 20% range.

* International distribution volumes and gross margins remain unchanged and are expected to be close to the midpoint of the previous guidance. Volumes are estimated to be in the range of 1.9-2.2 mmt, and gross margins are expected to be in the range of $20-26/mt.

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