The paragraph introduces The Mosaic Company's Third Quarter 2024 Earnings Conference Call. The operator mentions that the call will be in a listen-only mode until it's time for questions. Jason Tremblay welcomes everyone and outlines the agenda, which includes remarks from Bruce Bodine, the CEO, a fireside chat, and a Q&A session with other executives. It is noted that forward-looking statements will be made, which carry risks and uncertainties. The paragraph concludes with Bruce Bodine acknowledging the efforts of Mosaic's team in preparing for and recovering from recent hurricanes.

The paragraph discusses the successful recovery of Mosaic's operations in Louisiana and Central Florida following storms, noting no safety incidents or significant damage. The company's Florida operations quickly resumed normal activity, thanks to dedicated staff. It announces the upcoming retirement of CFO Clint Freeland, praising his contributions over six years. Luciano Siani Pires will join as the new CFO, bringing experience from Vale and familiarity with Mosaic. The paragraph also mentions challenges faced in the third quarter, including electrical issues at potash mines, but notes these have been resolved.

Mosaic reported $2.8 billion in revenue for the third quarter, with a net income of $122 million and adjusted EBITDA of $448 million, affected by lower potash prices and a delayed agriculture recovery in Brazil. The company is focusing on controlled improvements, expecting to meet its phosphate production target by year-end and achieving $150 million in cost savings annually by 2025. They aim for a $200 million CapEx reduction this year. Mosaic Biosciences is experiencing growth, with products used on 9 million acres globally, and is positioned for long-term growth without requiring significant new capital. The company completed key projects and plans future improvements to maintain capital allocation focus.

The paragraph discusses the company's strategic capital reallocation, including converting a joint venture into Ma’aden shares and reviewing a potash mine. It highlights dividends and share repurchases totaling $415 million. The market outlook is positive with improved corn and soybean prices, strong commodity crops, and favorable conditions in North America and Brazil. The Brazilian corn market benefits from ethanol production, and biofuels continue to drive long-term grain and oilseed demand. Indonesia and India are advancing biofuel programs that could affect commodity imports and exports. Fertilizer demand is high globally, driven by affordable nutrients and the need to recover from previous years' underapplication.

The paragraph discusses the agricultural nutrient market, highlighting increased nutrient extraction from the soil in North America and solid demand expected for 2025 as nutrients are replenished. The potash market is stabilizing with anticipated near-record shipments driven by demand recovery, especially in Southeast Asia. Phosphate prices remain high due to supply constraints and strong demand, with China's restricted exports and industrial use of phosphoric acid impacting fertilizer availability. Indian phosphate demand is unmet due to subsidy issues, potentially leading to strong future demand. The Potash segment saw a decrease in adjusted EBITDA due to lower prices and production disruptions caused by electrical issues and a rail strike, but these issues have now been resolved.

In the fourth quarter, the company anticipates potash sales volumes of 2.2 to 2.4 million tons at prices between $200 and $220 per ton, with minimal impact expected from labor strikes at Vancouver and Montreal ports due to contingency plans. The Phosphates segment's adjusted EBITDA for the quarter reached $265 million, up from $201 million the previous year, attributed to strong pre-hurricane production levels and solid stripping margins. Sales volumes for the third quarter were 1.5 million tons, affected by weather-related production and shipping delays. The company has secured reliable ammonia and sulfur supplies and new offtake agreements to meet future needs. They plan to reduce conversion costs by $20 to $30 per ton by the end of 2023, despite a production loss of 250,000 tons from Hurricane Milton. For the fourth quarter, phosphate sales volumes are expected to be 1.6 to 1.8 million tons with prices ranging from $570 to $590 per ton.

In the article, Mosaic Fertilizantes reported a decrease in adjusted EBITDA to $83 million from $147 million the previous year, mainly due to $32 million in bad debt reserves and $20 million in legal reserves. The bad debt arose from a Brazilian customer's bankruptcy, but the company expects to recover most of it through an insurance claim. Despite these setbacks, operations are fully restored globally, and the company is optimistic about the future, expecting strong agricultural and fertilizer markets by 2025. Mosaic plans to enhance shareholder value through portfolio refinement and opportunities in Mosaic Biosciences. Bruce Bodine and Jenny Wang discuss the solid state of agricultural fundamentals and tight phosphate and balanced potash markets, emphasizing strong demand in crops like palm oil, sugar, and coffee, while corn and soybean fundamentals are also improving.

The paragraph discusses the Brazilian agricultural market, highlighting that domestic corn and soybean prices are higher than international prices due to the devaluation of the real and increased demand for bioethanol. The Brazilian government's fuel bill, which proposes a 5% increase in diesel and bioethanol blending rates, is expected to significantly boost demand for corn, soybeans, and fertilizers by 2032. In India, the country is now a net corn importer due to increased corn ethanol production, alongside other crops, aiming for an E25 target by 2030. Phosphate markets remain tight with demand matching 2023 levels but supply constraints limiting growth. In India, monsoon season and economic factors have led to demand surpassing supply, causing reduced shipments in 2024 and setting up increased demand in 2025. In North America, a large crop is expected, which could result in a 4-5% increase in nutrient removal from the soil compared to 2023.

The paragraph discusses the current and future dynamics of the fertilizer market, particularly focusing on phosphates and potash. It highlights that the demand for phosphate is increasing, especially in Brazil, due to improved grower economics and tight inventories, while limited new supply and strong domestic demand in China are constraining global availability. The competition between agricultural use and industrial use in China has further tightened phosphate availability. For potash, there is a broad recovery in demand across the globe, notably in Southeast Asia, driven by high palm oil and rice prices. This is expected to result in global potash shipments reaching record levels, with supply from Russia and Belarus returning to pre-war levels. Overall, the potash market is seen as balanced with current low prices encouraging continued growth into 2025. Jason Tremblay asks about phosphate production levels, and Bruce Bodine anticipates reaching the target run rate by the quarter's end.

The paragraph discusses the company's turnaround schedule, which will be completed in a few weeks, enabling sustainable phosphate production, although it may vary quarterly due to turnaround activities and product mix adjustments. Production will be lower in the first quarter due to planned activities but is expected to recover throughout the year. The paragraph also addresses a question about credit exposure in Brazil, mentioning a $32 million bad debt recorded but limited risk of future losses. The company has taken steps to mitigate risks, such as reducing exposure to affected retailers, requiring prepayments, and using credit insurance to safeguard against potential losses.

In the question-and-answer session, Richard Garchitorena from Wells Fargo inquires about the phosphate business's strong margins despite challenging weather conditions and the ongoing cost savings efforts. Bruce Bodine responds by highlighting the success of their cost reduction program and how improved production positively affects fixed cost absorption. He acknowledges the impact of hurricanes in Louisiana and Florida on production but emphasizes that production remained flat compared to the previous quarter, showing significant improvement. Bruce expresses confidence in the underlying performance of their operations, despite the interruptions, and indicates that further information will be shared in the fourth quarter following their turnarounds.

The paragraph discusses expected cost improvements and margin expansions in a company's operations following disruptions from hurricanes and turnaround work in late 2023. After addressing these disruptions, they anticipate a $20 to $30 reduction in costs per ton. Clint Freeland acknowledges these points and notes that adjusting for production shutdowns would reveal lower costs and improvements, indicating progress. The conversation then shifts to a question from Steve Byrne of Bank of America regarding the company's Biosciences segment. He inquires about product types, their income statement impact, and the pipeline's potential. Bruce Bodine expresses appreciation and enthusiasm for discussing Biosciences, highlighting its importance to the company.

The paragraph discusses the expansion and potential of nutrient use efficiency enhancement products by Mosaic, with specifics provided by Jenny Wang. These products, like PowerCoat and BioPath, improve nutrient efficiency and are primarily sold in North and Central America, with other products in Brazil and China. Over 70% of these products are applied by coating fertilizer granules, while the rest are mixed with liquid fertilizers or pesticides. The company plans to expand to seed-coated products and is developing new products in their pipeline, including nitrogen fixation materials and phosphorus solubility enhancers.

The paragraph discusses the outlook for potash demand and supply in 2025, noting anticipated demand growth of 1 to 2.5 million tons. It mentions potential supply increases from areas like Laos, Russia, Belarus, and Canada, with Mosaic and Canpotex playing key roles in meeting this demand. Jenny Wang highlights that the current potash prices support further demand growth, especially with demand recovery expected in markets like Indonesia and Malaysia.

The paragraph discusses the supply-side assumptions for potash production, highlighting key projects and expansion efforts. It mentions the anticipated increase in production from EuroChem’s VolgaKaliy project in Russia and growth in Laos, despite past challenges such as management changes and water issues. There's also mention of potential supply constraints if expected expansions don't materialize as anticipated. Additionally, Bruce Bodine comments on production potential, noting an investment in the Esterhazy Hydrofloat project, which is expected to produce an additional 400,000 tons by mid-next year, bringing total output from Esterhazy and Belle Plaine to approximately 9 million tons, to meet market demands, particularly in North America.

The paragraph features a discussion led by Chris Parkinson of Wolfe Research, who questions Bruce Bodine about future projections for phosphate operations. Bodine acknowledges challenges and improvements in their phosphate production run rate, targeting 7.8 to 8.2 by the end of the year, despite scheduled maintenance turnarounds affecting short-term output. A significant sulfuric turnaround at Bartow is planned for early the next year, indicating some variability in operations. The focus remains on reaching a stable and higher production rate post-maintenance for consistent normalized earnings in 2025 and 2026.

The paragraph discusses fluctuations in conversion and rock costs in a certain business, with the expectation that conversion costs will decrease by $20 to $30 per ton from 2023 levels and remain stable annually. Rock costs in Florida are stable at $55 per ton with potential minor increases due to improved alignment following hurricane-related impacts. The costs may also vary based on the consumption of higher-cost Miski Mayo blended rock. The conversation then shifts to a Q&A session where Ben Theurer from Barclays asks about the business environment in Brazil, specifically regarding farmer activity and buying behavior. Jenny Wang responds, indicating that mixed signals are coming from Brazil due to challenges such as falling commodity prices and liquidity issues at the farmer level.

The paragraph discusses recent changes in agricultural commodity prices, noting that local prices have climbed higher than those in the Chicago market, partly due to the devaluation of the local currency and increased local demand from new ethanol plants. Farmers are benefiting from higher prices, improving their economic situation. The text highlights that a significant portion of crops and necessary fertilizers for the next planting seasons, including safrinha corn and summer soybean, have already been sold and purchased, respectively. Overall, despite challenges, there is a trend of improving sentiment and economic prospects at the farmer level.

In the paragraph, a discussion takes place about the unmet demand for phosphate in India due to unfavorable government subsidy conditions. Justin Pellegrino, standing in for Vincent Andrews from Morgan Stanley, asks for more insights into the subsidy situation. Bruce Bodine acknowledges a significant shortfall in India's demand and directs Jenny Wang to provide details. Jenny explains that demand for DAP (diammonium phosphate) is strong in India, aided by good monsoon and commodity prices, but supply hasn't kept up. The challenge lies in a big price gap between what farmers pay ($360 per ton) and international market prices ($640 per ton), with government subsidies not bridging this gap, deterring importers from purchasing internationally. This has resulted in an estimated 2 million tons shortfall in DAP shipments, which farmers still require.

The paragraph discusses the factors influencing phosphate shipments, including reduced consumption and depleted inventory. It anticipates changes in farmer prices and government subsidies to ensure economic viability for farmers, particularly in India where there has been a phosphate shortage. The conversation then shifts to a question from Andrew Wong of RBC Markets, who inquires about the phosphate production run rate and demand assumptions for the coming year. Bruce Bodine responds, clarifying that the projected production range considers normal interruptions like routine maintenance and weather disruptions.

The paragraph discusses recent challenges and considerations in agricultural turnaround times and cost dynamics. It highlights the impact of weather-related events, like hurricanes, on turnaround times, leading to variability in outcomes. The expected annualized figure is around 8 million, subject to fluctuations depending on timing. Additionally, it notes that while phosphate prices have been high, potash remains affordable. Farmers must consider multiple factors, including land rent and input costs, despite decent crop yields improving farm economics. In Brazil, barter ratios are rising, and the overall affordability of inputs remains manageable for farmers, especially given the high nutrient depletion in North American crops, necessitating replenishment to maintain yields.

In the paragraph, Jenny Wang and Bruce Bodine discuss the dynamics of demand and supply in the phosphate market. Jenny suggests that demand might only grow if there is an improvement in supply rather than a change in pricing. Bruce responds to a question from Edlain Rodriguez about phosphate being an outlier among nutrients. He explains that the high price of phosphate is due to limited supply rather than market manipulation. They emphasize that significant new capacity could shift these dynamics, but currently, supply constraints are the primary factor driving prices.

The paragraph discusses the forecast for Mosaic's phosphate production and pricing, emphasizing that despite historical trends, there has been no significant announcement of new supply that might impact their forecast. The company expects strong stripping margins into 2025. Jenny Wang notes that high phosphate prices are supported by elevated raw material prices, specifically ammonia and sulfur, and any future changes in their supply and demand may affect phosphate pricing. The discussion shifts to a question from Lucas Beaumont about Fertilizantes' updated shipment outlook, noting stable shipments for five consecutive years, contrasting with 5% annual growth seen in the prior decade, and seeking insights into the market outlook going forward.

In the article paragraph, Bruce Bodine and Jenny Wang discuss their optimistic outlook on Brazil's fertilizer market growth for the coming year. Despite a more selective approach due to credit risk concerns, they focus on value over volume in sales. Additionally, Bruce mentions an investment that will increase their distribution capacity by 1 million tons, particularly in northern Brazil, enhancing their growth potential next year. Overall, they anticipate market expansion supported by improving farm economics and barter ratios, but remain cautious about credit risks.

The paragraph is from a discussion involving Jeff Zekauskas from JPMorgan, who asks about potential curtailments in potash shipments from Belarus and Russia, and changes in phosphate production in China. Bruce Bodine responds, stating there's no evidence of Belarus or Russia reducing their potash shipment rates, contrary to President Lukashenko's suggestion. He mentions that shipments from Belarus have remained consistent. Bodine emphasizes the resilience of their supply chain and readiness to adjust strategies if needed. Jenny Wang is referenced as having more detailed information on China's phosphate production, which she is expected to address.

In the paragraph, Jenny Wang discusses the increase in China's phosphate production, driven by higher production of LFP and P4 for products like glyphosate, and notes a rise in local consumption of phosphate and potash fertilizers due to economic factors and the adoption of GMO crops. Bruce Bodine concludes the call by highlighting Mosaic's resilience in overcoming challenges, its strategic investments, and efforts to reduce costs and capital expenditures.

The Mosaic Biosciences business is experiencing rapid growth, with its plants and mines operating efficiently and safely to meet high product demand. The company is optimistic about its future prospects for the rest of this year and into 2025. The conference call and presentation concluded with gratitude expressed to participants.

This summary was generated with AI and may contain some inaccuracies.