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<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND
EXCHANGE COMMISSION<BR>
<FONT style="font-size: 12pt">Washington, D.C. 20549
</FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest
event reported): December 18, 2008</B>

<P style="font-size: 24pt" align="center"><B>TERRA INDUSTRIES
INC.<BR>
</B><FONT style="font-size: 10pt">(Exact name of registrant as
specified in its charter) </FONT>
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  <TD width="32%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="33%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="32%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>Maryland</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>1-8520</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>52-1145429</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
 </TR>

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cellpadding="0" width="100%" border="0">

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  <TD width="49%">&nbsp;</TD>
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  <TD style="border-bottom: #000000 1px solid"><B>Terra Centre<BR>
600 Fourth
Street, P.O. Box 6000<BR>
Sioux City, Iowa <BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>51102-6000</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
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<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number,
including area code: <B>(712) 277-1340</B>
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cellpadding="0" width="30%" border="0">

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  <TD style="border-bottom: #000000 1px solid" nowrap><B>&nbsp;</B></TD>
 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">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:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR>


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<P style="display: none; font-size: 10pt" align="center">1
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<P style="font-size: 10pt" align="left"><B>ITEM 8.01 OTHER EVENTS</B>

<P style="font-size: 10pt; text-indent: 8%" align="left">On December&nbsp;18,
2008, Terra Industries Inc. (&#8220;Terra&#8221;) announced that GrowHow UK
Ltd. (&#8220;GrowHow&#8221;), a joint venture in which Terra holds a 50% stake,
on December&nbsp;17, 2008, temporarily idled ammonium nitrate fertilizer
production at the Billingham UK facility to manage inventories. In addition,
effective December&nbsp;27, 2008, it will temporarily idle ammonium nitrate
fertilizer production at its Ince UK facility to manage inventories and
effective January&nbsp;2, 2009, it will idle ammonia production at Ince in
anticipation of a mid-January maintenance turnaround. A copy of the press
release is filed herewith as Exhibit&nbsp;99.1.

<P style="font-size: 10pt" align="left"><B>ITEM 9.01 FINANCIAL STATEMENTS AND
EXHIBITS.</B>

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  <TD nowrap align="left" width="3%">(c)</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>Exhibit</TD>
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width="8%">&nbsp;</TD>
  <TD nowrap align="left" width="3%">99.1</TD>
  <TD width="1%">&nbsp;</TD>
  <TD>Press Release issued December&nbsp;18, 2008, announcing that GrowHow UK
Ltd. has and will idle certain production.</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">2
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<P style="font-size: 10pt" align="center"><B>SIGNATURES</B>

<P style="font-size: 10pt; text-indent: 4%" align="left">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.


<P>
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  <TD align="left">&nbsp;</TD>
  <TD align="left">TERRA INDUSTRIES INC.</TD>
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<TR><TD>&nbsp;</TD></TR>


 <TR valign="top">
  <TD align="left">&nbsp;</TD>
  <TD align="left" style="border-bottom: 1px solid #000000">/s/ John W. Huey</TD>
</TR>

 <TR valign="top">
  <TD align="left">&nbsp;</TD>
  <TD align="left">John W. Huey<BR><I>Vice President, General Counsel and</I><BR>
<I>Corporate Secretary</I></TD>
</TR>
</TABLE>

<P style="font-size: 10pt" align="left">Date: December&nbsp;18, 2008

<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">3
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<P style="font-size: 10pt" align="center"><B>EXHIBIT INDEX</B>



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  <TD width="8%">&nbsp;</TD>
  <TD width="5%">&nbsp;</TD>
  <TD width="87%">&nbsp;</TD>
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 <TR valign="bottom">
  <TD align="left" style="border-bottom: 1px solid #000000"><B>Exhibit<BR>Number</B></TD>
  <TD align="left">&nbsp;</TD>
  <TD align="left" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>


 <TR valign="bottom">
  <TD align="left">99.1</TD>
  <TD>&nbsp;</TD>
  <TD align="left">Press Release issued December&nbsp;18, 2008, announcing that GrowHow UK
Ltd. has and will idle certain production.</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="center">&nbsp;

<P style="display: none; font-size: 10pt" align="center">4
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Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 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): December 18, 2008
TERRA INDUSTRIES
INC.
(Exact name of registrant as
specified in its charter)
Maryland
1-8520
52-1145429
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
Terra Centre
600 Fourth
Street, P.O. Box 6000
Sioux City, Iowa
51102-6000
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number,
including area code:
(712) 277-1340
(Former name or former address if changed since last report.)
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:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01 OTHER EVENTS
On December 18,
2008, Terra Industries Inc. ("Terra") announced that GrowHow UK
Ltd. ("GrowHow"), a joint venture in which Terra holds a 50% stake,
on December 17, 2008, temporarily idled ammonium nitrate fertilizer
production at the Billingham UK facility to manage inventories. In addition,
effective December 27, 2008, it will temporarily idle ammonium nitrate
fertilizer production at its Ince UK facility to manage inventories and
effective January 2, 2009, it will idle ammonia production at Ince in
anticipation of a mid-January maintenance turnaround. A copy of the press
release is filed herewith as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND
EXHIBITS.
(c)
Exhibit
99.1
Press Release issued December 18, 2008, announcing that GrowHow UK
Ltd. has and will idle certain production.
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/ John W. Huey
John W. Huey
Vice President, General Counsel and
Corporate Secretary
Date: December 18, 2008
EXHIBIT INDEX
Exhibit
Number
Description
99.1
Press Release issued December 18, 2008, announcing that GrowHow UK
Ltd. has and will idle certain production.