8-K

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 8-K


                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

       Date of report (Date of earliest event reported): November 1, 2004


                              TERRA INDUSTRIES INC.
             (Exact name of registrant as specified in its charter)



           Maryland                         1-8520             52-1145429
(State or other jurisdiction of    (Commission File Number)   (IRS Employer
        incorporation)                                       Identification No.)

                                  Terra Centre
                        600 Fourth Street, P.O. Box 6000
                           Sioux City, Iowa 51102-6000
                                 (712) 277-1340
          (Address of Principal Executive Offices, including Zip Code)
              (Registrant's Telephone Number, Including Area Code)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|  Written communications pursuant to Rule 425 under the Securities Act (17
     CFR 230.425)

|_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
     240.14a-12)

|_|  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

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ITEM 8.01         OTHER EVENTS

         On November 1, 2004, Terra Industries Inc. announced that, at the
request of Methanex Corporation and under the terms of an agreement between the
two companies dated December 15, 2003, it will cease production at its Beaumont,
Texas, methanol manufacturing facility on December 1, 2004. A copy of the press
release is furnished herewith as Exhibit 99.1.


ITEM 9.01         FINANCIAL STATEMENTS AND EXHIBITS.

         (c)      Exhibits

                  99.1     Press Release issued November 1, 2004.



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                             TERRA INDUSTRIES INC.


                                             /s/ Mark A. Kalafut
                                             -----------------------------------
                                             Mark A. Kalafut
                                             Vice President, General Counsel and
                                             Corporate Secretary


Date: November 2, 2004

EX-99.1

[logo]                                                     Terra Industries Inc.
                                                               600 Fourth Street
TERRA                                                              P.O. Box 6000
                                                       Sioux City, IA 51102-6000
                              Exhibit 99.1             Telephone: (712) 277-1340
                                                         Telefax: (712) 277-7383
                                                         www.terraindustries.com
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                                      NEWS
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For immediate release                                    Contact: Mark Rosenbury
                                                                  (712) 279-8756


                  TERRA TO MOTHBALL BEAUMONT METHANOL FACILITY


Sioux City, Iowa (Nov. 1, 2004)--Terra Industries Inc. (NYSE symbol: TRA)
announced today that, at the request of Methanex Corporation and under the terms
of an agreement between the two companies, it will cease production at its
Beaumont, Texas, methanol manufacturing facility on Dec. 1, 2004, and mothball
the plant for an indefinite period. Terra sold its sales contracts and rights to
the full output of the Beaumont plant to Methanex for five years ending Dec. 31,
2008. Under the terms of that agreement, Terra received a lump-sum payment of
$25 million and shares in a percentage of cash gross profits generated from
Beaumont sales. The agreement gives Methanex the right to cease production at
the Beaumont facility and also stipulates that, beginning two years from the
date of the shutdown, Terra has the option to terminate the agreement at a cost
of approximately $417,000 per month remaining on the contract.


The Beaumont facility has annual production capacity of 225 million gallons of
methanol and 255,000 tons of ammonia. The ammonia loop has historically used
hydrogen produced by the methanol plant in its manufacturing process. Terra is
evaluating the feasibility of alternative sources of hydrogen for the ammonia
loop.


Approximately 40 Terra employees will lose their jobs after the methanol plant
is mothballed. Terra will retain some employees to operate the methanol storage
and distribution terminal and to potentially operate the ammonia plant. Terra
estimates that it will spend as much as $5 million to mothball the plant and for
employee separation costs.


Terra continues to produce methanol at its Woodward, Okla., facility. That
facility, which primarily produces nitrogen products, has annual methanol
production capacity of 40 million gallons.


Terra Industries Inc., with 2003 revenues of $1.4 billion, is a leading
international producer of nitrogen products.


This news release may contain forward-looking statements, which involve inherent
risks and uncertainties. Statements that are not historical facts, including
statements about Terra Industries Inc.'s beliefs, plans or expectations, are
forward-looking statements. These statements are based on current plans,
estimates and expectations. Actual results may differ materially from those
projected in such forward-looking statements and therefore you should not place
undue reliance on them. A non-exclusive list of the important factors that could
cause actual results to differ materially from those in such forward-looking
statements is set forth in Terra Industries Inc.'s most recent report on Form
10-K and Terra Industries Inc.'s other documents on file with the Securities and
Exchange Commission. Terra Industries Inc. undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of new
information, future developments or otherwise.


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Note:    Terra Industries' news announcements are also available on its web
         site, www.terraindustries.com.