Record Sales Volumes Not Always a Good Thing

Mosaic’s volumes were up, but prices were down. Find out what this means for the industry’s future.

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The Motley Fool

Generally speaking, record sales are music to investor’s ears, unless of course, if that volume is accompanied by a 19% decrease in the price that the product commanded just a year ago. That’s exactly what Mosaic shareholders witnessed while listening to the company’s fourth quarter and full year earnings call. All told, a total of 2.6 million tonnes of potash, a vital nutrient in the agriculture industry, left Mosaic’s shelves in the quarter which trumped last year’s same quarter by 600,000 tonnes. While that’s all well and good for this quarter and fiscal year, it might not bode well for the next couple of years.

You see, potash is a fertilizer that doesn’t necessarily need to be reapplied on an annual basis because it tends to remain in the soil for up to three years. What that might mean for Mosaic and its peers is that this record demand might not be there if prices begin to rise over the next year or two. That being said, there are other fertilizers that could help buoy overall company sales if this is the case. For more, tune in to the video below.

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 Fool contributor Taylor Muckerman has no position in any stocks mentioned at this time.  The Motley Fool does not own any stocks mentioned at this time.        

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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