Farmland Industries Inc.'s fertilizer business continued to be a financial drain on the cooperative, which reported a decline in first-quarter sales and earnings Tuesday.
Kansas City, Mo.-based Farmland earned $3.2 million on sales of $2.3 billion during the quarter ended Nov. 30. During the same period a year earlier, Farmland had earnings of $6.7 million on sales of $3 billion.
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The cooperative's refrigerated foods and petroleum businesses posted "significant" earnings increases from a year earlier, the cooperative said, but crop production continued to struggle. An oversupply on fertilizer has hurt the division, which last week formally placed its Lawrence nitrogen plant on standby status.
The plant, already idle since May 1, laid off 20 production employees last week and revealed plans for shedding 34 administrative and managerial jobs by March 1. A Farmland fertilizer plant in Pollock, La., also is idle.
Bob Honse, Farmland's president and CEO, said he was optimistic that fertilizer losses would rebound.
"Going into the second quarter, inventory costs have been reduced and the cost of production should continue to reflect lower natural gas prices," he said. "We also expect additional acres of feed grain production to drive increased demand in the spring season. China's accession to the WTO, which Farmland worked hard to achieve, will increase demand for phosphate fertilizers."
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