Mosaic Co. is idling its Louisiana phosphates operations in St. James, cutting production by about 500,000 tons this year, as imports into the country have pushed down prices.
The move is intended to speed up how fast Mosaic can empty its inventories, though the company expects “a more balanced global supply-and-demand picture to emerge by 2020.”
Prices of the fertilizer ingredient have been under pressure since late 2018 as demand remains weak and capacity expansions in Morocco and Saudi Arabia have increased output and exports, Reuters reports.
“Phosphate prices have declined further through the summer, with excess imports continuing to enter the U.S. on top of high channel inventories,” President and CEO Joc O’Rourke said in a statement. “We expect our move to idle production to tighten supply and rebalance the market. Mosaic will prioritize shipments to meet key customer needs through the idling period.”
The company will also initiate $250 million in stock repurchases under its existing share repurchase authorization, which has $850 million of remaining capacity, according to the announcement.
Mosaic operates its Faustina and Uncle Sam facilities in St. James Parish. At the Uncle Sam Facility, a turbo generator harnesses excess heat from sulfuric acid production. The cogeneration process allows Mosaic to harness “clean and green” energy. Uncle Sam produces phosphoric acid, which is then shipped across the river to the company’s Faustina facility, producing ammonia to make MAP, DAP and other products.