Sulphur Costs Squeeze Phosphate Fertilizer Margins
Producers and buyers of phosphate fertilizer should expect continued cost pressure as sulphur supply stays exposed to Strait of Hormuz disruption.
Updated on Nov. 5, 2026 in Agriculture
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Nutrien has decided not to sell its phosphate division after non-binding bids fell short of expectations, and will instead shut its White Springs, Florida facility in Q2 2027. Fertilizer producers and farm input buyers are the operators most directly affected by the division's restructuring.
Why it matters
The strategic review began in November 2025, when the division was valued by analysts at US$2.4 billion, but geopolitical disruption made a sale difficult. Sulphur, a critical phosphate input, has nearly doubled in price since the Middle East war began, squeezing production margins across the sector.
Nutrien's third-quarter net earnings fell 39 per cent year over year, while phosphate production costs rose 29 per cent across the quarter. The division lost US$79 million over the nine months ending Sept. 30, set against an analyst valuation of US$2.4 billion when the review launched in November 2025.
The players
Nutrien
A global fertilizer and agricultural inputs company, and the second-largest phosphate producer in North America after Mosaic Co.
Mosaic Co.
The largest phosphate producer in North America and a direct competitor to Nutrien in the phosphate fertilizer market.
The details
Nutrien received non-binding bids for its phosphate division that did not meet company expectations, so it chose to close the White Springs facility rather than sell the business. The closure is expected to cut annual capital expenses and lease payments by about US$50 million. Sulphur, a key input, has been volatile because nearly half of global seaborne sulphur trade passes through the Strait of Hormuz, and that disruption raises costs for phosphate producers.
Timeline
November 2025: Nutrien launched the strategic review of its phosphate division.
February 2026: War in the Middle East disrupted shipping through the Strait of Hormuz.
Q3 2026: Nutrien reported a 39 per cent decline in third-quarter net earnings.
Sept. 30, 2026: The nine-month period closed with a US$79 million division loss.
Q2 2027: Nutrien will shut down the White Springs facility in Florida.
Market Landscape
Nutrien's decision follows the pattern of producers absorbing input-cost shocks rather than exiting through a sale when buyer interest is weak. Mosaic Co., the largest North American phosphate producer, faces the same sulphur exposure, making the sector's margin pressure a shared competitive condition.
Operators who buy phosphate or sulphur-linked fertilizer should expect continued price volatility while sulphur supply remains tied to the Strait of Hormuz. Procurement teams should review supplier contracts and cost-pass-through terms, and consult qualified counsel or an accountant on any contract changes.
The takeaway
The main lesson is that input-cost shocks can outweigh asset value when a sale is not viable, pushing producers toward closure. Operators should track sulphur pricing and Strait of Hormuz shipping conditions, and check how their fertilizer contracts pass through input-cost changes.
Further reading
For broader context on how input costs and supply disruptions shape farm-sector producers, explore our Agriculture coverage.
Source note: This article includes information reported by The Globe and Mail.
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