Shares of Mosaic Co. dipped Thursday in the first trading since the U.S. fertilizer company with big operations and profile in Saskatchewan cut its production outlook for phosphate over the next few months.
Mosaic shares were down about 3 per cent on the New York Stock Exchange, falling $1.47 to $48.82 (U.S.) in the first 15 minutes of trading, before recovering a bit in later trading.
Late Wednesday, the Minnesota-based fertilizer company announced it will reduce production of finished phosphate by up to 250,000 tonnes in the first quarter of 2012.
Mosaic is the world's largest producer of phosphate and second-largest producer of potash — two key ingredients in producing fertilizer.
The company employs 7,500 people and operates five potash mines, including the world's largest in Esterhazy, Sask.
Mosaic is also one of the best known corporate brands in the Canadian prairie province, through Mosaic Stadium, the former Taylor Field and home to the CFL's Saskatchewan Roughriders.
The company said Wednesday that current spot prices on the phosphate market don't reflect Mosaic's outlook for the business.
"In response, we have decided to cut planned production by 250,000 tonnes over the next three months," said Jim Prokopanko, Mosaic's president and chief executive in a statement issued after markets closed.
Earlier this month, Mosaic and Potash Corp. of Saskatchewan Inc. settled a lawsuit ending a dispute over ownership of production from the Esterhazy mine in southeastern Saskatchewan.
The two producers have clashed over production from the mine for several years, with the Saskatchewan-based Potash Corp. claiming it is owed the processed potash ore under an agreement originally reached in 1971 that stipulates Mosaic send it 1.1 million tonnes from the mine per year.
Under the settlement, Mosaic will deliver tonnage owed to Potash Corp. for 2011 and 2012 — which Potash Corp. has claimed is worth more than $1-billion over the final two years of the agreement.
At the end of 2102, production capacity from Esterhazy will be reallocated to Mosaic. The settlement also dismisses a counterclaim from Mosaic.