Out Fox The $treet

The highly profitable fertilizer business continues to remain under pressure as the thesis is that the supply/demand equation remains challenged. To address its substantially lower earnings during the first quarter,  Mosaic  ( NYSE: MOS     ) rehashed its intent to eliminate 500 positions as part of a long-term plan to cut costs by $500 million. This follows the recently implemented plan by Potash Corp ( NYSE: POT     ) to reduce costs following the crash in potash prices after the Belarusian marketing arrangement between Belarus and Russia broke up. With margins still relatively high in the potash market and the prime additional customers in the emerging markets of China and India unable to afford high prices, one has to wonder if the fundamental growth prospects aren't flawed. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

The fertilizer industry continues to struggle as the long-term demand thesis is under pressure. Investors are learning the lesson that price matters in the commodity business. In the case of potash fertilizer, the substantial gross margins of the past may never return after to the breakup of the Belarusian marketing arrangement. First quarter earnings for The Mosaic Company ( NYSE: MOS     ) were mostly disappointing, with declining prices for phosphate and potash pushing down operating income. The numbers follow those of PotashCorp ( NYSE: POT     ) , where analysts continue to forecast a substantial drop in earnings for this year. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

The fertilizer sector still appears ready for a breakout year in 2013, as strong crop demand merges with weak production due to the severe drought in the U.S and various other weather issues around the world. About a month ago, this article focused on the potential at Mosaic (MOS) as the company reported strong demand in Q4. Since that report, many competitors have curtailed production and cancelled expansion projects due to a weak demand environment. The company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. While Mosaic was very bullish on that earnings call in a similar tone as competitor Potash (POT) (see article here), the actual Q1 report released yesterday disappointed analysts. The company reported $1.01 per share versus analyst estimates at $1.15. The stock dropped 4% on the day, yet investors should've been aware of the potential weakness with all the weak demand notices during the quarter. Read the full a...

The fertilizer sector appears ready for a breakout year in 2013, as strong crop demand merges with weak production due to the severe drought in the U.S. An earlier article focused on Potash (POT) , which reported strong fertilizer demand, yet had recently curtailed production due to a surprising declining demand environment. Another interesting fertilizer company is The Mosaic Company (MOS) . It reported earnings back in July and has a stock approaching breakout levels around $60. The company has a similar focus on potash, but it has a more diverse mix, with a higher revenue base from phosphates. Mosaic is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Not surprisingly, Mosaic was very bullish as well on the earnings call in a similar tone as Potash. The company though has a better balance sheet with $2.8B of net cash, placing it in a stronger position to take advantage of any weakness during the fall. Read the full art...