Shares in agriculture companies slumped after Mosaic, the US fertiliser company, said it was cutting phosphate production in response to flagging demand.

In New York shares in John Deere, the machinery maker, lost 14.2%, with fertiliser maker CF Industries slumping nearly 35% and seeds firm Monsanto shedding 16.2% despite raising its earnings forecast. Canada's Potash Corp lost 27% and Calgary-based Agrium, the largest agricultural retailer in the US, closed down 24.1%.

The falls followed an admission by Mosaic that the average price of its phosphate sales in the June-to-August quarter were, while up 2.5 times year-on-year, below company forecasts.

"Strong upward price momentum levelled off towards the end of the quarter," the group, which is majority owned by Cargill, said, blaming a seasonal slowdown in demand coupled with larger trade stockpiles.

"To better balance inventory levels and supply chain demands we will reduce planned phosphate production by 500,000 to 1m tonnes over the next several months."

The announcement, which sent Mosaic's own shares down 41%, raised fears that the credit crisis was beginning to crimp farm spending. Ed Schafer, the US Agriculture Secretary, on October 1 warned that tight credit could slow the country's agriculture boom.

However, Mosaic, which reported a near quadrupling to $1.19bn in net profits for the quarter, said that it expected demand for phosphate to rebound once the impact of its production cut fed through into falling stockpiles. While farmers had grown record harvests, low inventories of grain and oilseeds meant there was scope for further yield improvements fostered by fertilisers.

Other market losers included Agco, the owner of agricultural brands including Massey Ferguson and Fendt, which closed 10.4% lower in New York.