Mosaic Company's earnings have tumbled 89% thanks to cuts in farm fertilizer demand, which the potash and phosphate group warned was likely to show only a slow revival.

The US-based company's post-tax profits collapsed to $58.8m in the December-to-February quarter from $520.8m a year before.

The group said that, while raw material prices had remained high, revenues had been hurt by a "change in sentiment" among farmers concerned at lower grain prices and global economic crisis.

Mosaic's phosphate fertilizer division, normally its main earner, fell into a $124m operating loss after a 58% slump to $552m in sales.

Operating profits at the potash division halved to $186m despite a more modest drop of 12%, to $481m, in revenues.

Slow revival

Mosaic said that while its performance was likely to improve during the current quarter, results would remain "weak compared with the recent past".

Although demand for phosphates had shown some revival, prompting it to reverse some cutbacks in production, potash sales remained in the doldrums.

Mosaic is to retain potash production cuts "until demand improves", slicing output by 2.0m tonnes during its financial year, which ends next month.

Nonetheless, the group said it remained confident in agriculture's prospects, with population growth and biofuel production to continue raising grain and oilseed consumption "at a faster pace than historical trends".

Jim Prokopanko, the Mosaic chief executive, said: "Large crops are still required to secure the world's food supply. Demand for crop nutrients can only be deferred for so long."

Price target cut

The data disappointed analysts, who had been expecting Mosaic's earnings to come in at $129m, excluding one-off effects, according to Reuters.

Cancord Adams reduced its price target on the group's shares to $55 from $60.

Nonetheless, Mosaic stock recovered from early weakeness to stand $1 higher at $43,.94 in afternoon trade in New York.