Mosaic Misses; Fertilizer Woes Ahead?

(Mosaic item updated to clarify analyst Charles Neivert's outlook on crop prices and the fertilizer industry, and to update stock prices.)

NEW YORK (TheStreet) - Mosaic(MOS) shares fell 4% Thursday afternoon after the fertilizer producer reported disappointing fiscal third-quarter results.

At least one analyst, however, downplayed the miss -- but suggested that more worrisome developments may lie on the horizon, not just for Mosaic but for the fertilizer industry as a whole.

In a note to clients Thursday, Charles Neivert of Dahlman Rose called Mosaic's miss a "timing issue," with a seasonal pickup forthcoming in the company's next period, which will benefit naturally from the Northern Hemisphere planting season.

"On the bearish side," Neivert wrote, "we see potential challenges for fertilizer producers by the second half of the calendar year." His rationale? "'The Runaway Bride' syndrome, i.e. a fear of commitment by dealers/distributors." That is, fertilizer buyers may now be shying away from making the big crop-nutrient purchases they had earlier claimed they would.

Furthermore, according to Neivert, bumper crop yields this year in corn and soybeans may result in weaker crop prices in 2011 -- never a good sign for fertilizer makers, since poorer farmers means a drop in demand for crop nutrients.

Neivert's opinion appeared to diverge from Mosaic's, but he later said in a brief interview with TheStreet that this isn't so. He noted that his concerns involve next year, not this year. Mosaic has not given guidance, qualitative or quantitative, on calender 2011.