UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant þ
Filed by a Party other than the Registrant o

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o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
o		Definitive Proxy Statement
o		Definitive Additional Materials
þ		Soliciting Material Pursuant to 240.14a-12

Terra Industries Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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	(1)		Title of each class of securities to which transaction applies:
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Filed by Terra Industries Inc.
Pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Subject Company: Terra Industries Inc.
Commission File No.:001-08520

February 15, 2010

Dear Terra Customer:

I am writing to update you on important news about Terra.

Earlier today, we announced an agreement to be acquired by Yara International ASA (“Yara”) for US$41.10 per share in cash. We are excited about this business combination, which we believe represents a winning proposition and significant opportunity for Terra, our customers, our employees and our shareholders. A copy of the press release we issued is attached for your convenience and can be found on the investor relations page of our website at: www.terraindustries.com.

Yara has an outstanding reputation as the world’s largest supplier of plant nutrients, and we have enjoyed a strong partnership with them since forming GrowHow UK in 2007, a joint venture operation in the United Kingdom. Yara has a solid understanding of the nitrogen business and the value we place on you, our customers. Following closing of the transaction, we will be able to market Yara products produced elsewhere and you can expect increased product offerings with the same focus on upgraded and industrial products. I am confident that Yara’s broad expertise in agricultural, industrial and environmental products will complement Terra’s North American nitrogen footprint and serve you well in the future.

Following the close of the transaction, Terra will become a wholly-owned subsidiary of Yara and will be called Yara North America. Yara North America will oversee operations of the combined company, including Yara’s manufacturing and sales facilities in the United States and Canada. I will serve as President of Yara North America and Sioux City will become the headquarters of Yara’s North American operations.

Until the transaction closes, which we expect will happen by the end of the second quarter, Terra will continue to operate as a separate company and we expect it will be business as usual. Following completion of the transaction, we expect that you will continue do business with people whom you have come to know and trust. While we will make every effort to keep you informed throughout this process, you should feel free to reach out to your normal contact with any questions you may have.

I am truly pleased about the opportunities this transaction will afford Terra and you, and I look forward to building upon our strong working relationship.

Sincerely,

Mike Bennett
Terra President and CEO

Important Information

Terra Industries Inc. (“Terra”) plans to file with the Securities and Exchange Commission (the “SEC”) and mail to its shareholders a proxy statement regarding the proposed business combination with Yara International ASA (“Yara”). Investors and security holders are urged to read the proxy statement relating to such business combination and any other relevant documents filed with the SEC (when available), because they will contain important information. Investors and security holders may obtain a free copy of the proxy statement and other documents that Terra files with the SEC (when available) at the SEC’s Web site at www.sec.gov and Terra’s Web site at www.terraindustries.com. In addition, the

proxy statement and other documents filed by Terra with the SEC (when available) may be obtained from Terra free of charge by directing a request to Terra Industries Inc., Attn: Investor Relations, Terra Industries Inc., 600 Fourth Street, P.O. Box 6000, Sioux City, IA 51102-6000.

Certain Information Regarding Participants

Terra, its directors, executive officers and certain employees may be deemed to be participants in the solicitation of Terra’s security holders in connection with the proposed business combination with Yara. Security holders may obtain information regarding the names, affiliations and interests of such individuals in Terra’s Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on February 27, 2009 and amended on April 28, 2009, its definitive proxy statement for the 2009 Annual Meeting, which was filed with the SEC on October 13, 2009, and its Current Report on Form 8-K filed with the SEC on December 1, 2009. To the extent holdings of Terra securities have changed since the amounts printed in the definitive proxy statement for the 2009 Annual Meeting, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC. Additional information regarding the interests of such individuals can also be obtained from the proxy statement relating to the proposed business combination with Yara when it is filed by Terra with the SEC. These documents (when available) may be obtained free of charge from the SEC’s Web site at www.sec.gov and Terra’s Web site at www.terraindustries.com.

Forward-Looking Statements

Certain statements in this communication may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made and Terra undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. Words such as “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions are used to identify these forward-looking statements. The forward-looking statements contained herein include statements about the proposed business combination with Yara. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. These risks, uncertainties and assumptions include, among others:

	•		the possibility that various closing conditions for the proposed business combination with Yara may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction,
	•		the risk that Terra’s shareholders fail to approve the proposed business combination,
	•		the risk that Yara’s shareholders fail to approve the proposed capital increase for its rights offering,
	•		that risk that the proposed business combination with Yara will not close within the anticipated time period,
	•		the risk that disruptions from the proposed business combination with Yara will harm Terra’s relationships with its customers, employees and suppliers,
	•		the diversion of management time on issues related to the proposed business combination with Yara,
	•		the outcome of any legal proceedings challenging the proposed business combination with Yara,
	•		the amount of the costs, fees, expenses and charges related to the proposed business combination with Yara,
	•		changes in financial and capital markets,
	•		general economic conditions within the agricultural industry,

•

competitive factors and price changes (principally, sales prices of nitrogen and methanol products and natural gas costs),

	•		changes in product mix,
	•		changes in the seasonality of demand patterns,
	•		changes in weather conditions,
	•		changes in environmental and other government regulations,
	•		changes in agricultural regulations and
	•		changes in the securities trading markets.

Additional information as to these factors can be found in Terra’s 2008 Annual Report/10-K and in Terra’s subsequent Quarterly Reports on Form 10-Q, in each case in the sections entitled “Business,” “Risk Factors,” “Legal Proceedings,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the Notes to the consolidated financial statements.