*Sees strong farm economy in 2009

*Would like to expand potash and phosphate reserves

By Euan Rocha

NEW YORK (Reuters) - U.S. fertilizer producer Mosaic Co (MOS.N) expects a solid farm economy in 2009 and does not see next years crop plantings being hurt by the effects of the credit freeze, its chief executive officer said in an interview.

"To say no, there are going to be no implications (on the farm economy from the credit crunch) that would be careless and whistling past the graveyard. But, we see the farm economy as solid and our reports are that banks are still lending to farmers," said CEO Jim Prokopanko.

Prokopanko spoke to Reuters late on Wednesday after the company reported fiscal first-quarter results that missed Wall Street's expectations and warned it would lower phosphate production due to excess phosphate inventories in global markets.

Shares of the fertilizer producer tumbled more than 40 percent on Thursday. Mosaic's earnings miss, coupled with analysts' downgrades of other agribusiness companies pummeled shares of farm equipment makers, seed producers, grain processors and other fertilizer companies.

Prokopanko said the results met his expectations and the company remained confident that the fundamentals in the agricultural sector remained strong.

"We've looked at historic data going back 40 plus years. There are only three or four years, where we've seen grain and oilseed consumption reduced year-over-year," said Prokopanko.

"We see that growth could possibly slow, but we just don't see grain and oilseed consumption going backward."

The agricultural sector sell-off comes amid worries that the credit crisis that has swept through financial markets could hamper farmers' ability to get cash for next year's planting season.

"There are issues over tighter credit in both the U.S. and Brazil that could force farmers to cut back on spending and reduce fertilizer usage," said Goldman Sachs analyst Edlain Rodriguez in a note to clients.

Investors fear that farmers will pull back on spending because of lower grain prices and higher costs for things like fertilizers, seeds, farm equipment and fuels.

BAILOUT NECESSARY

Prokopanko believes that Washington's $700 billion bailout package is necessary, even though the global credit freeze has not really impacted the fundamentals in the agricultural sector.

The bailout plan would allow the U.S. Treasury Department to buy toxic mortgage-related assets from banks in an effort to unlock credit markets and head off a deeper economic downturn in the United States and overseas.

The initial bailout proposal was rejected by the U.S. House of Representatives on Monday. However, the Senate passed an amended version of the plan on Wednesday night and the House is expected to vote again on Friday.

"Personally, I'm favorable of (the bailout package). Something has to be done here to restructure the financial and credit markets," said Prokopanko.

Prokopanko said the collapse in valuations of fertilizer stocks does present an opportunity for acquisitions in the sector. He said the company is keen to expand both its potash and phosphate reserves.

"Share prices are down, but the earnings sure are good, the cash flow sure is good and these are solid assets ... Yes, we'd like to pick something up, but I don't think anyone is going to give it away."

(Reporting by Euan Rocha; editing by Carol Bishopric)