Mosaic (NYSE:MOS) executives said they are entering 2026 with improving demand signals and stronger operating momentum, even after a weaker-than-expected finish to 2025 driven by a sharp drop in U.S. phosphate demand and a late-year spike in sulfur costs.
On the company’s fourth-quarter and full-year 2025 earnings call, President and CEO Bruce Bodine said the fourth quarter “was weaker than we expected due to phosphate demand in the United States,” citing affordability pressures and uncertainty around government support. However, he added that U.S. demand is “emerging as farmers prepare for spring planting,” and that global agricultural fundamentals remain “solid.”
Demand trends: U.S. phosphate weakness, international tightness
Despite lower overall North American potash and phosphate shipments in 2025, Mosaic said its North America sales volumes were more resilient, which management said indicates market share gains. On the global side, the company characterized phosphate supply/demand dynamics as supportive, pointing to China’s continued export restrictions and rising demand for phosphoric acid used in lithium iron phosphate batteries.
EVP Commercial Jenny Wang said the affordability issue is particularly acute in the U.S. and has helped keep domestic DAP pricing “pretty stable.” In contrast, she said international markets have strengthened as countries such as China and India have different demand dynamics, including government support for farmers. Wang noted DAP prices have increased over the last five weeks internationally and said international DAP netbacks are at a premium to NOLA pricing.
On whether Mosaic can pass through higher sulfur costs, management said it may be harder than in past tight markets because of affordability constraints. Bodine said Mosaic views stripping margins above $300 per ton as “very constructive,” adding that higher operating rates and fixed-cost absorption should help cushion raw-material volatility.
Operational outlook: phosphate improvement and record potash ambitions
Mosaic highlighted progress across its production system, while acknowledging that its phosphate recovery has taken longer than expected. Bodine said Florida rock production reached its highest level in three years and Miski Mayo achieved record mining production. He described P2O5 output as the key measure of success, and said P2O5 production improved during 2025.
In the fourth quarter, Mosaic produced 1.7 million tons of phosphate even with an extended turnaround at its Bartow facility and deliberate production adjustments due to soft U.S. demand. Looking ahead, the company expects to produce at least 7 million tons of phosphate in 2026 and said it is “off to a strong start” this year.
Responding to questions about the path back toward an 8 million ton annual rate, Bodine outlined operating factors at key facilities and said performance improved into the fourth quarter and into the first quarter. He said Bartow was at an 80%+ operating factor for much of 2025, Louisiana reached that level in the fourth quarter, Riverview was in the mid-70s in the fourth quarter and is “approaching” 80%, and New Wales is in turnaround with expectations to approach 80% after coming out in the second quarter. Bodine said “seven is kind of where we’ve been over the last two quarters” and that Mosaic sees potential upside but is guiding based on “trailing demonstrated” performance.
In potash, the company said it returned to full operating rates at Esterhazy after a fatality in December, and its HydroFloat project is ramping. Bodine said Mosaic expects record production at Esterhazy in 2026. International sales volumes were a record in 2025, and Mosaic expects to produce around 9 million tons of potash in 2026—similar to 2025—even after completing the Carlsbad transaction.
Costs and sulfur: near-term pressure, efficiency initiatives continue
Management emphasized disciplined cost actions, including curtailing exposure to unfavorable economics. Bodine said sulfur prices spiked at the end of 2025 and are expected to “significantly compress margins” in phosphate and Mosaic Fertilizantes into the first half of 2026. The company idled Araxá and Fospar in Brazil, described as its lowest-margin operations, “until further notice.”
CFO Luciano Siani Pires quantified sulfur sensitivity, saying every $10 increase in sulfur adds about $10 million of quarterly expense. He said Mosaic expects a roughly $250 million headwind to first-quarter 2026 EBITDA versus the prior-year first quarter due to higher sulfur prices.
Executives also detailed cost progress in 2025:
- Phosphate fourth-quarter cash cost of conversion was $112 per ton, about $20 per ton better than an earlier “high-water mark,” which management called a structural improvement.
- Potash cash cost of production averaged $75 per ton in 2025; management said costs would have been within its Analyst Day target range if not for the extension of higher-cost Colonsay.
- Mosaic Fertilizantes blended rock cost per ton reached $97, the lowest level since 2021.
The company said it achieved its $150 million cost savings objective ahead of schedule in 2025 and is targeting another $100 million in savings in 2026 through technology-enabled initiatives spanning supply chain optimization, vendor management, and productivity improvements.
Cash flow and capital allocation: working capital unwind, higher 2026 CapEx
Siani Pires said 2025 was challenging from a cash flow perspective due to inventory builds in finished products and raw materials, which intensified as demand weakened in the fourth quarter. Working capital reduced cash flow by $960 million for the year and contributed to an $829 million increase in net debt.
In November 2025, Mosaic raised $900 million in 3-year and 5-year notes. Management said the company initially intended to refinance part of a 2027 maturity, but redirected the proceeds to retire short-term commercial paper following the demand downturn. The company’s next maturity is not until the end of 2027, the CFO said.
For 2026, management expects progressive improvement in cash flow as working capital unwinds and phosphate production improves. The company exited 2025 with about 240,000 tons of excess phosphate inventory versus the prior year, representing roughly $140 million of potential working capital release at current inventory values, according to the CFO. Siani Pires said a $300 million to $500 million working capital release is “highly possible” in 2026, driven by demand recovery, improved production, and changes in sulfur and ammonia inputs.
On capital spending, Mosaic expects 2026 capital expenditures of about $1.5 billion, higher than 2025, largely due to mine, gypstack, and clay settling area expansions in Florida, as well as other waste-related projects. Bodine described the 2026 CapEx figure as a “ceiling” and said the clustering of projects is “unusual” but necessary. Management reiterated expectations for CapEx to trend down toward approximately $1 billion by 2030, with asset retirement obligations and environmental reserve cash spending declining to about $200 million by 2030. The CFO added that ARO and environmental reserve spending runs through operating cash flow lines rather than capital expenditures.
Management said it expects to generate free cash flow in 2026 after CapEx and other cash spending above the minimum dividend, allowing Mosaic to prioritize debt reduction and “subsequently pave the way to resume extraordinary returns to shareholders.”
Mosaic Biosciences and portfolio actions
Mosaic pointed to its Biosciences platform as a growth driver supported by its global market access. Bodine said the company launched five new products in 2025 and expanded commercialization in the Americas, China, and India. The business now has more than 60 registrations and sells into 16 countries, he said, with stable gross margins “in the 40s.”
In 2025, Mosaic Biosciences doubled net sales to $68 million. Looking ahead, management expects another doubling in 2026, supported by continued adoption and 8 to 10 anticipated new product launches.
On capital reallocation, Bodine said Mosaic divested non-core assets including Patos de Minas and Taquari and has a pending transaction to sell Carlsbad. Transactions announced in 2025 are expected to generate about $170 million in proceeds over time and reduce asset retirement obligations by $60 million, management said, while also avoiding significant capital expenditures those assets would have required. The CEO also said the company’s equity position in Ma’aden is currently valued at about $2.1 billion.
Looking into 2026, Mosaic said it is pursuing strategic alternatives for selected Brazilian assets, including potential value from co-products such as niobium and other critical minerals, and expects to pursue monetization of some Florida land holdings.
About Mosaic (NYSE:MOS)
Mosaic Co is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients. The company’s primary business activities center on the extraction, processing and distribution of phosphate rock, phosphate-based fertilizers and potash products. These core nutrients are essential components in modern agriculture, supporting crop yields and soil health across a range of farming applications.
In its phosphate segment, Mosaic operates mining and production facilities that convert phosphate rock into concentrated phosphates, finished phosphate fertilizers and feed phosphates for animal nutrition.
