8-K

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                       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): October 20, 2003


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



           Maryland                     1-8520                 52-1145429
(State or other jurisdiction    (Commission File Number)      (IRS Employer
     of 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)

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ITEM 5.  OTHER EVENTS AND REGULATION FD DISCLOSURE.

         On October 20, 2003, Terra Industries Inc. issued the press release
contained in Exhibit 99.1 hereto, which is incorporated by reference herein.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

         99.1     October 20, 2003 Press Release



                                   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/ Francis G. Meyer
                                       -----------------------------------------
                                       Francis G. Meyer
                                       Senior Vice President and Chief Financial
                                       Officer


Date: October 21, 2003

EX-99.1

TERRA                      Exhibit 99.1                    Terra Industries Inc.
                           ------------                        600 Fourth Street
                                                                  P.O. Box 6000
                                                       Sioux City, IA 51102-6000
                                                       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

             APPEALS COURT ORDERS TERRA INSURER TO COVER CLAIM COSTS

Sioux City, Iowa (October 20, 2003)--On Oct. 17, the U.S. Court of Appeals for
the Eighth Circuit upheld a lower court decision ordering Terra Industries
Inc.'s insurer, National Union Fire Insurance Company of Pittsburgh ("National
Union") to pay all past and future judgments, settlements and defense and other
associated costs arising from the recall of carbonated beverages containing
carbon dioxide tainted with benzene. The claims arose when carbon dioxide
manufactured at Terra's Severnside, England plant was found to be tainted with
trace amounts of benzene in May 1998.


In 2001, Terra management estimated that total claims for the product recall
could be $14 million and established reserves to cover these losses.


The Eighth Circuit's decision is subject to appeal by National Union.


Terra Industries Inc., with 2002 revenues of $1 billion, is a leading
international producer of nitrogen products and methanol.


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.