U.S. farmers are involved in a "pricing stalemate" with retail crop nutrient suppliers that could impact yields and supplies this year, according to one of the country's largest producers.

A senior executive at Mosaic Co. (MOS) said while demand for phosphate-based fertilizers is starting to recover, the industry needs to adjust pricing and inventory writedowns to kickstart the market.

Fertilizer demand soared in the wake of rising commodity crop prices, helping boost yields, only to tumble in the wake of the market reversal that started last August.

Many farmers have opted to delay buying fertilizer, as well as equipment like tractors, ahead of the upcoming planting season. Sellers have been stuck with highly priced inventory produced during last year's boom.

Mike Rahm, vice-president market analysis at Mosaic, noted the pricing standoff in slides accompanying a conference presentation in Houston.

Rahm noted demand for phosphate-based products had started to improve, sparking new production, while buyers of potash-based supplies remained on the "sidelines."

His comments on demand conditions echo recent remarks by other industry executives, with further insight expected next week when Monsanto Co. (MON) reports fiscal second-quarter results.

Monsanto is the world's largest seed supplier by revenue, as well as a producer of herbicides and other crop nutrients.

Sector valuations across the sector have fallen heavily, with Mosaic down 72% from its 52-week high and Monsanto off 42%. Monsanto has argued it is more resilient as farmers typically prioritize seed purchases over fertilizer and capital equipment.

In his presentation, Rahm noted demand from India remained strong, helped by a government price cap while the Brazilian market was "uncertain" and China remained a "wild card" because of export taxes and procurement policies.

-By Doug Cameron, Dow Jones Newswires; 312-750-4135; doug.cameron@dowjones.com