Now, I'll turn the call over to Angelo.Angelo Brisimitzakis Thanks, Peggy. Good morning, everyone. Thank you for joining us today. Compass Minerals made solid gains this quarter with a 20% year-over-year increase in operating earrings, a 24% increase in net earnings, and a 27% increase in adjusted EBITDA on essentially the same sales volumes as in the second quarter of 2010. These improvements helped us generate the best six-month cash flow from operations in our history of $194 million. And we achieved these second quarter gains despite some headwinds that were largely external. It’s unusual for weather to play much of a role in our second quarter results, but weather has significant impact on sales volumes in both of our operating segments this year. Heavy rains in California and other western states this spring hampered fertilizer applications to many fruit, vegetable and nut crops, which in turn suppressed our specialty potash fertilizer sales in the second quarter. It’s our experience that once the potash application season has passed, growers simply skip the application for that growing cycle. So unfortunately, these sales are unlikely to be recaptured. However, Big Quill Resources, which we acquired in January contributed more than enough new sales to increase our overall segment sales volume by about 4% over the last year's second-quarter results. Excluding this weather impact, demand for sulphate of potash is improving from what we’ve experienced over the last couple of years, and this rebounding demand has supported stronger prices in the marketplace. The stronger potash market combined with the benefit of higher price sales from Big Quill Resources, more specialty application, lifted our second quarter average selling price by $81 per ton or 16% over the 2010 quarter to $600 per short ton. Shipping and handling costs rose by $12 per ton for the same period last year. So our net year-over-year pricing gains was about $70 per ton.
Our second-quarter SOP production cost were flat with the first quarter of this year, but they did increase over our 2010 costs because the higher value sulfate of potash sold by Big Quill Resources has higher per unit production costs than the potash we produced at the Great Salt Lake.Despite these high year costs, our specialty fertilizer operating earnings increased 26% to $18.7 million and our operating margin expanded by two percentage points over the prior year quarter and by almost three percentage points sequentially. As for the second half of 2011, I like to able to be say that weather challenges are behind us, but unfortunately that isn’t the case. Like the other Western US states, Utah experienced a cool wet spring; this has affected our solar evaporation process which is fueled by hot, dry, sunny weather at the Great Salt Lake. With a shortened solar evaporation window this year, we're likely to have a reduced mineral harvest in the fall. As a result, we expect to produce less SOP for the rest of 2011 and 2012 than we had originally planned, which in turn will increase our per unit production costs. We anticipate that the reduced solar production will also require us to constrain and optimize our overall segments sales to around 160,000 tons of SOP during the second half of 2011 and to about 350,000 tons for 2011. However, we expect our average selling price to continue improving and to be around $625 per ton potentially more for the second half of 2011. So factoring all these year-over-year SOP changes that is significantly higher average selling prices, higher production costs, and lower sales volume. We still expect our specialty fertilizer operating margin percentage, operating margin dollars and operating earnings per ton to strengthen through the end of 2011 when compared to the prior year quarters.
Before I conclude this discussion on our specialty fertilizer segment, I want to emphasize that our analysis of this year’s solar evaporation season continues to be fine-tuned. We will have more information for you on our third-quarter conference call, as our solar evaporation cycle will be completed. I also want to point out that we don't currently expect this to impact our mineral harvest in future years, nor should it affect our ability to sell magnesium chloride or solar salt coproducts from the Great Salt Lake facility this year or next.Read the rest of this transcript for free on seekingalpha.com