An official estimate of a drop in the US corn plantings this year is wide of the mark, CF Industries has said, announcing a 53% fall in first quarter earnings.

While the US Department of Agriculture has estimated that this season's America's corn plantings, which are still in their early stages, will fall 1m acres to 85m acres, CF said that the final acreage would "meet or exceed" last year's total.

CF gave no reason for its thinking, beyond noting long-term increases in corn demand "as population growth and improving diets in developing countries continue to drive demand for coarse grains".

However, it forecast the increased acreage would support "strong" sales of nitrogen fertilizers this spring, after a flat first quarter of 2009 by volume.

By value, sales rose 4% to $456.2m in the period thanks to increases in ammonia prices, although divisional profits fell as it shouldered the fixed costs of running factories which operated at only 81% capacity during the quarter.

'Slow domestic demand'

Phosphate sales, meanwhile, eased 1.0% to $224.4m "despite slow domestic demand" as CF doubled shipments abroad.

Stephen Wilson, the CF chief executive, said: "Realising the difficult domestic market conditions early in the quarter, we stepped up our actions to move product into offshore markets."

Nonetheless, the division fell into an operating loss thanks to a hangover of high raw material costs stemming from last year and a $24.3m writedown in potash inventories.

Group earnings fell from $177.3m to $83.0m on revenues up 1% at $680.6m.

'Mine the soil' 

Mr Wilson said that domestic sales of phosphate and potash remained sluggish amid a stalemate between farmers awaiting lower prices and distributors attempting to recover the high costs of stocks bought during last year's buoyant markets.

"Unlike nitrogen, which requires application each year, phosphate and potash can be retained the soil," Mr Wilson said.

"Many farmers may opt to 'mine the soil' and rely on current phosphate levels for the spring season."

However, the fertilizer industry's long-term prospects remained "strong" supported by demand for higher crop yields.

CF Industries shares stood 5.7% higher at $70.74 in lunchtime trade in New York.