Crop nutrient company Mosaic (MOS) has generated significant returns over the past year on increased demand and pricing in the agricultural fertilizer market. Because strong demand from key crop-growing regions and rising input costs are expected to continue driving fertilizer prices up, is MOS well positioned to move higher? Read on to learn more.As one of the world’s leading integrated producers of concentrated phosphate and potash, The Mosaic Company’s (MOS) shares have gained 142.6% over the past year and 55.5% year-to-date to close yesterday’s trading session at $34.95 on rising demand and pricing in the agricultural fertilizer market. However, the stock has declined 3.3% over the past month. The price retreat is due to investors’ concerns over reduced output owing to the company’s decision to shut down two mine shafts—K1 and K2—at its flagship potash mine at Esterhazy, Canada nine months ahead of schedule on a recent acceleration of brine inflows.
However, the move is not expected to have a huge impact on MOS’ financials in the long run because MOS’ third Esterhazy mine—K3—will replace the two closed shafts in supplying potash to global customers.
Furthermore, in a major victory for the company, the U.S. International Trade Commission announced in March that it had completed its investigation and determined that subsidized phosphate fertilizer imports from Morocco and Russia have materially injured the U.S. phosphate industry. Consequently, the department will issue countervailing duty orders on phosphate fertilizers from Russia and Morocco, which will remain in place for at least five years. This is expected to deliver MOS a significant competitive advantage.