CALGARY – The CEO of Canadian fertilizer giant Nutrien Ltd. said Thursday the company may consider slowing down its previously announced plan to ramp up potash production, as falling prices and lower sales volumes take a bite out of profits.

“Yes, we would consider slowing down. We’re really, as we talked about earlier this year, watching the market,” CEO Ken Seitz told analysts on a conference call to discuss the company’s disappointing first-quarter financial results.

“If we see that the market’s not there, then we’ll pace our capital accordingly.”

The Saskatoon-based company — the world’s largest fertilizer producer — lowered its earnings guidance for the year to between $6.4 billion and $8.0 billion, down from a previously announced range of $8.4 billion to $10 billion.

The company’s net earnings for the third quarter were US$576 million, down 58 per cent from US$1.4 billion a year earlier, and its sales for the quarter ended March 31 were US$6.1 billion, down 20 per cent from US$7.7 billion a year earlier.

It has been a volatile period for Nutrien, which achieved record earnings in 2021 and then saw fertilizer prices spike in March of 2022 as the Russia-Ukraine war shook up global agricultural markets and reduced supplies of fertilizer from Eastern Europe.

To meet increased global demand, Nutrien announced in June of last year a plan to ramp up potash production by 40 per cent compared with 2020 production levels — an increase of more than five million tonnes.

The company said it would achieve this by investing in expansions at its existing Saskatchewan mines, including the hiring of approximately 350 people.

But by the second half of 2022, Nutrien had suffered what it called a “historic” decline in the pace of its potash shipments. In North America and Brazil in particular, farmers appeared to be postponing fertilizer purchases in the face of high prices.

As a result, in February of this year, the company announced it would slightly delay its expansion plans, targeting 2026 instead of 2025 to reach its potash production target of 18 million tonnes.

While Seitz said Thursday the company is open to slowing its plans further, he said he remains bullish on the longer-term outlook for fertilizer. He said Nutrien anticipates increased global potash demand in the second half of the year as a result of lower-than-expected inventories and improved affordability for farmers compared with 2022.

He added that historically, periods of lower-than-normal demand have been followed by years of strong demand growth — and he expects that to happen again.

“The reality is again that we are in a market that’s growing,” Seitz said.

“We believe that’s going to carry on for the absolute foreseeable future — a two and a half to three per cent annual growth rate. New supply’s going to be required to meet that growing demand.”

Nutrien’s share price tumbled Thursday on the company’s first-quarter results, trading down almost five per cent on the Toronto Stock Exchange as of mid-day.

The company’s diluted net earnings per share for the quarter were US$1.14, down 54 per cent from US$2.49 a year earlier.

This report by The Canadian Press was first published May 11, 2023.

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Note to readers: This is a corrected story. A previous version ran with a photo of a former CEO.