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

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

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

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

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<P align="center" style="font-size: 24pt"><B>TERRA INDUSTRIES INC.<BR></B>
<FONT style="font-size: 10pt">(Exact name of registrant as specified in its charter)
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    <TD style="border-bottom: 1px solid #000000"><B>Maryland</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>1-8520</B></TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000"><B>52-1145429</B></TD>
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<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>
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    <TD style="border-bottom: 1px solid #000000"><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: 1px solid #000000"><B>51102-6000</B></TD>
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<TR valign="top">
    <TD>(Address of Principal Executive Offices)</TD>
    <TD>&nbsp;</TD>
    <TD>(Zip Code)</TD>
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<P align="center" style="font-size: 10pt">Registrant&#146;s telephone number, including area code: <B>(712) 277-1340</B>


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<TR>
    <TD nowrap>(Former name or former address if changed since last report.)</TD>
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<P align="left" style="font-size: 10pt">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 align="left" style="font-size: 10pt">
<FONT face="Wingdings">&#111;</FONT> Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>
<FONT face="Wingdings">&#111;</FONT> Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>
<FONT face="Wingdings">&#111;</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">&#111;</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 align="left" style="font-size: 10pt"><B>ITEM 8.01 OTHER EVENTS</B>


<P align="justify" style="font-size: 10pt; text-indent: 8%">On December&nbsp;18, 2008, Terra Industries Inc. (&#147;Terra&#148;) announced that it has idled its Woodward, Oklahoma
manufacturing facility and the methanol loop, which operates in conjunction with the ammonia process, to manage
inventories in light of lower industrial ammonia demand resulting from the economic slowdown. A copy of the press
release is filed herewith as Exhibit&nbsp;99.1.


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


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    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibit</TD>
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    <TD width="3%" nowrap align="left">99.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Press Release issued December&nbsp;18, 2008, announcing that Terra has idled
its Woodward, Oklahoma ammonia manufacturing facility and methanol loop.</TD>
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<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


<P align="left" style="font-size: 10pt; text-indent: 4%">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 align="left" style="margin-left:48%; font-size: 10pt">TERRA INDUSTRIES INC.



<P align="left" style="margin-left:48%; font-size: 10pt"><U><B>/</B>s/ John W.
Huey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
<BR>
John W. Huey
<BR>
<I>Vice President, General
Counsel and</I>
<BR>
<I>Corporate Secretary</I>


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


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




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<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>EXHIBIT INDEX</B>
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    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Press Release issued December&nbsp;18, 2008, announcing that Terra has idled
its Woodward, Oklahoma ammonia manufacturing facility and methanol loop.</TD>
</TR>
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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 it has idled its Woodward, Oklahoma
manufacturing facility and the methanol loop, which operates in conjunction with the ammonia process, to manage
inventories in light of lower industrial ammonia demand resulting from the economic slowdown. 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 Terra has idled
its Woodward, Oklahoma ammonia manufacturing facility and methanol loop.
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 No.
Description
99.1
Press Release issued December 18, 2008, announcing that Terra has idled
its Woodward, Oklahoma ammonia manufacturing facility and methanol loop.