REGINA, Saskatchewan — Potash and fertilizer producer Mosaic Co. has issued layoff notices to a total of 1,000 workers at two locations in Canada.

Mosaic, headquartered in Plymouth, Minnesota, said Monday the layoffs affect 700 people in Esterhazy, Saskatchewan and 300 at its Colonsay, Saskatchewan operation.

Mosaic spokesman Brad DeLorey said the layoffs represent 80 percent of their operations in Canada. The Canadian operations produce potash.

"We're facing economic challenges as most industries are now. We're trying to match supply with world demand," DeLorey said. "Without a doubt, it's not an easy time."

The indefinite layoffs are effective Feb. 15 in Esterhazy and March 8 in Colonsay.

The cuts are a blow to Saskatchewan's resources-based economy, which has been booming in recent years because of solid growth in the agriculture, chemicals and oil and gas industries. But the Canadian province is now beginning to feel the impact of lower commodity prices, which have led to rising job cuts across the West's primary industries.

Mosaic announced last week that it is reducing its output due to weakening demand for fertilizer and higher costs for raw materials and other inputs.

Story continues below

The company said that despite net earnings of nearly US$960 million for the second quarter ended Nov. 30, sales are expected to be soft in the third quarter of the current fiscal year.

The company previously announced that it was reducing phosphate production by about 1 million tons through December 2008.

It now plans to reduce production by up to an additional 1 million tons through fiscal 2009. Potash production will also be cut by up to 1 million tons in the second half of the fiscal year.

Canadian fertilizer giant Potash Corp. also announced in December it will scale back its operations, issuing temporary layoff notices to 940 Saskatchewan employees for eight weeks starting Jan. 18.

These cuts came close on the heels of a similar decision by Agrium Inc. to issue layoff notices to 380 employees at its potash operation in Vanscoy, Saskatchewan.

However, companies and analysts have predicted a strong outlook for the fertilizer sector in 2009 for the simple reason that people still need to eat during a recession.