Intelligence Check: How Does Mosaic’s Q2 Compare to Its Q1 2026 Fertilizantes Struggles?

Introduction

The Mosaic Company’s second-quarter 2026 results show that its Brazilian Mosaic Fertilizantes business remains under significant pressure, but the nature of the challenge has shifted from the severe restructuring impact seen in the first quarter toward an increasingly difficult operating environment driven by raw-material availability, sales volumes, and market conditions.

The comparison between Q1 and Q2 is important because Mosaic’s Brazilian business entered 2026 already facing weak commodity margins, import dependency, and operational restructuring. By the second quarter, the business was still loss-making, but the company had gained a clearer view of the structural issue: sulfur availability and affordability had become a major constraint on phosphate production in Brazil.

Q1 2026: A Severe Reset for Mosaic Fertilizantes

Mosaic’s first quarter was heavily affected by its decision to idle the Araxá and Patrocínio phosphate operations in Brazil.

The company reported a consolidated Q1 net loss of $258 million, while adjusted EBITDA was $416 million. The quarter included approximately $442 million in charges related to idling the two Brazilian operations, making the restructuring a major contributor to the reported loss.

For Mosaic Fertilizantes specifically, the Q1 environment was already difficult. Management highlighted weak commodity-product margins in Brazil, particularly for products such as SSP, MAP and DAP. Fertilizer shipments in Brazil were also expected to contract during 2026 because of limited nutrient availability, credit constraints and import dependency.

Q1 was therefore characterized by a large structural reset.

Q2 2026: The Losses Continue, but the Driver Changes

The second quarter did not deliver a full recovery.

Mosaic Fertilizantes reported approximately $1.0 billion in sales, down from $1.2 billion in the same period a year earlier. The segment generated an operating loss of $41 million, compared with operating earnings of $109 million a year earlier.

Adjusted EBITDA was $60 million, down sharply from $159 million in Q2 2025.

However, the Q2 result should be interpreted differently from Q1.

The first quarter was dominated by major restructuring charges and asset-idling decisions. By Q2, the larger issue was the economics of actually producing and selling fertilizer in Brazil.

Sales Volumes Show the Pressure

Mosaic Fertilizantes' sales volumes declined to approximately 1.5 million tonnes in Q2, compared with 1.6 million tonnes in Q1.

The sequential decline is important because it indicates that the Brazilian business did not immediately regain volume momentum after the Q1 restructuring.

Across Mosaic's businesses, Q2 sales volumes were approximately:

• Phosphates: 1.4 million tonnes

• Potash: 2.0 million tonnes

• Mosaic Fertilizantes: 1.5 million tonnes

The company said lower sales volumes and higher raw-material costs affected both its Phosphates and Mosaic Fertilizantes businesses.

Sulfur Becomes the Critical Constraint

One of the most important developments in Q2 was the worsening availability and affordability of sulfur, a critical raw material for phosphate fertilizer production.

Mosaic said commodity fertilizer production in Brazil was being idled because of sulfur affordability and availability issues, while animal-feed production at Cajati continued operating.

This creates a significant challenge for Mosaic Fertilizantes.

Even if Brazilian agricultural demand remains healthy, fertilizer production cannot expand normally if the necessary raw materials are unavailable or economically unattractive.

The result is a supply-chain problem that extends beyond traditional demand weakness.

Q1 vs. Q2: What Actually Improved?

The comparison shows that Q2 was not a clean recovery, but there were some important differences.

Q1

Q1 was primarily about:

• Major restructuring

• Idling Araxá and Patrocínio

• Large impairment and restructuring charges

• Weak Brazilian fertilizer margins

• Concerns over domestic demand

• Import dependency

• Limited visibility

Q2

Q2 shifted toward:

• Persistent operating losses

• Lower sales volumes

• Higher raw-material costs

• Severe sulfur availability constraints

• Continued pressure on phosphate production

• Stronger fertilizer pricing partly offsetting volume problems

This means Mosaic moved from a restructuring crisis toward a supply-cost crisis.

Pricing Provides Some Support

There was one important positive factor during Q2: fertilizer pricing was stronger.

Mosaic reported that stronger phosphate and potash pricing partly offset the negative effects of lower sales volumes and increased raw-material costs.

This is important because it demonstrates that Mosaic's earnings are not being pressured solely by weak fertilizer demand.

Higher fertilizer prices can provide a partial buffer against rising input costs. However, the benefit becomes limited when production volumes fall significantly or raw materials such as sulfur become prohibitively expensive.

The Bigger Problem: Brazil’s Phosphate Economics

The Q1 and Q2 results together reveal a deeper challenge for Mosaic Fertilizantes.

Brazil is a major agricultural market with substantial fertilizer demand, but the economics of local phosphate production depend heavily on access to competitive raw materials.

If sulfur prices remain high or supply remains constrained, domestic phosphate production becomes less attractive.

That could increase reliance on imported fertilizer products while simultaneously reducing the competitiveness of local manufacturing.

For Mosaic, this creates a difficult strategic balance between maintaining production, managing costs, and protecting margins.

Q2 Was Better Than the Q1 Headline Loss—But Not a Recovery

It is important not to compare the two quarters solely by looking at consolidated net losses.

Q1's $258 million net loss was heavily distorted by the large charges associated with idling Araxá and Patrocínio.

Q2's consolidated net loss was approximately $273 million, but the operating story was different. The company was dealing with severe fertilizer-market and raw-material pressures rather than simply repeating the same restructuring charge.

Therefore, Q2 should not be interpreted as evidence that the restructuring failed.

Instead, it shows that Mosaic still has a difficult operating environment to manage after taking restructuring actions.

What This Means for Mosaic

The comparison suggests that Mosaic's Brazilian strategy is entering a more selective phase.

The company is likely to prioritize operations and products that generate stronger economics while reducing exposure to production that cannot compete under current raw-material conditions.

The decision to idle certain commodity fertilizer production also reflects a broader industry trend: producers are becoming more disciplined about capacity when input costs rise faster than achievable selling prices.

Implications for Fertilizer Buyers

For buyers in Brazil and other fertilizer markets, Mosaic's results provide several important signals.

First, availability cannot be assessed solely through nameplate capacity. A facility may have substantial theoretical capacity but still reduce production if raw-material economics are unfavorable.

Second, sulfur has become an increasingly important variable in phosphate fertilizer procurement.

Third, stronger fertilizer prices can coexist with weaker producer profitability when input costs rise sharply.

Procurement teams should therefore monitor not only fertilizer prices but also sulfur availability, freight rates, production utilization, and regional import flows.

Outlook for Q3 and Beyond

The key question for Mosaic Fertilizantes is whether the sulfur constraint and associated production limitations can ease.

If sulfur availability improves and costs normalize, the Brazilian business could potentially increase production and benefit from stronger fertilizer pricing.

If sulfur remains expensive or difficult to secure, however, Mosaic may continue to prioritize higher-value products and selectively idle commodity production.

The broader Brazilian fertilizer market will also depend on farmer purchasing power, credit availability, agricultural economics, imports and global fertilizer prices.

Intelligence Check

The Q1-to-Q2 comparison leads to a clear conclusion:

Mosaic Fertilizantes has moved past the most visible phase of its restructuring, but it has not yet moved past its underlying profitability problem.

Q1 was dominated by the financial impact of restructuring and asset idling. Q2 demonstrated that even after those actions, the business remains exposed to weak volumes and high raw-material costs.

The most important new variable is sulfur.

If sulfur supply and pricing stabilize, Mosaic's Brazilian operations could have greater room to recover. If the constraint persists, further production discipline and portfolio optimization may be necessary.

Conclusion

Mosaic's Q2 2026 performance shows a business that is more operationally focused but still under significant pressure.

Compared with Q1, the story has shifted from a major restructuring event to a difficult operating environment characterized by lower volumes, high raw-material costs and sulfur constraints.

Mosaic Fertilizantes' Q2 adjusted EBITDA of $60 million remained positive, but it was sharply below the $159 million recorded in Q2 2025, while the segment posted a $41 million operating loss.

For the fertilizer market, the key takeaway is that Mosaic's Brazilian struggles are no longer simply about demand. Raw-material economics—particularly sulfur—are becoming a decisive factor in determining which phosphate production remains commercially viable.