Mosaic Company (the) · NYSE:MOS

Mosaic Company (the) — PRESENTATION BEING MADE BY THE MOSAIC COMPANY ON JANUARY 13, 2015

48 slides from Mosaic Company (the)'s investor presentation, Jan 13, 2015

  1. Slide 1: Bull or Bear? The Great Debate Rahm vs. Jung

    Bull or Bear? The Great Debate Rahm vs. Jung Mosaic AgCollege Orlando, FL January 13, 2015 Dr. Michael R. Rahm Vice President Market and Strategic Analysis Andy Jung Director Market and Strategic Analysis

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement 2 This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Northern Promise Joint Venture, the acquisition and assumption of certain relate

  3. Slide 3: Bull or Bear? The Great Debate - Course Description

    Bull or Bear? The Great Debate Rahm vs. Jung This course pits two Mosaic analysts in three informal and somewhat irreverent debates about the agricultural commodity, phosphate and potash outlooks. Based on a coin toss, one analyst will argue the bull case while the other will argue the bear case, wi

  4. Slide 4: Debate: Agricultural Commodity Outlook

    Debate 1 Agricultural Commodity Outlook

  5. Slide 5: Where do we go from here?

    Where do we go from here? 5 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00 S O N D J F M A M J J A US$ BU New Crop Corn Prices Daily Close of the New Crop Contract (Sep 1 - Aug 31) 2013 2014 2015 Source: CME 8.0 9.0 10.0 11.0 12.0 13.0 14.0 S O N D J F M A M J J A US$ BU New Crop Soybean Prices Daily

  6. Slide 6: The Bull Case: Markets are Looking Ahead Not Back

    The Bull Case: Markets are Looking Ahead Not Back (Six Minutes)

  7. Slide 7: Markets are Looking Ahead Not Back

    Markets are Looking Ahead Not Back 1. It’s a demand-pull story 2. And it’s a demand-pull story with a few supply kickers and risks 3. Look beyond the stock build 4. Farmers aren’t selling 5. Agricultural commodities will remain attractive investments 7

  8. Slide 8: It's a demand-pull story

    It’s a demand-pull story 8 1,800 2,000 2,200 2,400 2,600 2,800 3,000 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14F Mil Tonnes World Grain & Oilseed Use Source: USDA and Mosaic  Record harvests but also record demand.  Highly profitable feed economics and strong feed demand.  U.S. exports especial

  9. Slide 9: Look beyond the stock build

    Look beyond the stock build 9 15.0% 17.5% 20.0% 22.5% 25.0% 27.5% 30.0% 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13E14F Global Grain & Oilseed Stocks as a Percent of Use Source: USDA 606 580 494 407 469 463 426 438 513 570 549 537 520 582 625 350 400 450 500 550 600 650 700 00 01 02 03 04 05 06 07

  10. Slide 10: Farmers aren't selling

    Farmers aren’t selling 10 6% 8% 10% 12% 14% 16% 18% 20% 22% 0 20 40 60 80 100 120 140 160 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14F Debt:Asset Ratio Bil $ U.S. Net Cash Income Government Payments Market Debt:Asset Ratio Source: USDA  Some farmers have invested in additional storage cap

  11. Slide 11: The Bear Case: Just a Dead Cat Bounce

    The Bear Case: Just a Dead Cat Bounce (Six Minutes)

  12. Slide 12: Just a Dead Cat Bounce

    Just a Dead Cat Bounce 1. Fundamentals don’t lie - and will prevail 2. Big crops in big fields in South America 3. A strong dollar drives lower commodity prices 4. Biofuels are at risk 5. Something will spook the speculative herd 12

  13. Slide 13: Fundamentals don't lie - and will prevail

    Fundamentals don’t lie - and will prevail 13 606 580 494 407 469 463 426 438 513 570 549 537 520 582 625 15% 18% 20% 23% 25% 28% 30% 350 400 450 500 550 600 650 00 01 02 03 04 05 06 07 08 09 10 11 12 13E14F PercentMil Tonnes World Grain & Oilseed Stocks Stocks Percent of Use Source: USDA 2.0 2.1 2.2

  14. Slide 14: Big crops in big fields in South America

    Big crops in big fields in South America 14 0 20 40 60 80 100 120 140 160 70 74 78 82 86 90 94 98 02 06 10 14F Mil Tonnes South American Soybean Production Brazil Argentina Paraguay Source: USDA 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 0 10 20 30 40 50 60 70 80 90 100 70 74 78 82 86 90 94 98 02 06 10 1

  15. Slide 15: A strong dollar drives lower commodity prices

    A strong dollar drives lower commodity prices 15 y = 0.3804x2 - 81.538x + 4557.2 R² = 0.7331 100 200 300 400 500 600 700 70 80 90 100 110 120 CRB Index U.S. Dollar Index CRB Index vs. U.S. Dollar Index 2000 to 2014 Source: ICE  There is a negative correlation between a trade-weighted dollar index a

  16. Slide 16: Biofuels are at risk

    Biofuels are at risk 16 0 20 40 60 80 100 120 140 160 00 02 04 06 08 10 12 14 $ BBL WTI Global Spot Crude Oil Cash Prices Source: NYMEX 0% 7% 14% 21% 28% 35% 42% 49% 0 2 4 6 8 10 12 14 70 74 78 82 86 90 94 98 02 06 10 14 Pct of Total Bil Bu U.S. Corn Use Corn Use Ethanol Grind Ethanol Pct of Total S

  17. Slide 17: Your Vote

    Your Vote

  18. Slide 18: Are you an agricultural commodity bull or bear?

    After those compelling arguments, are you an agricultural commodity bull or bear? 18 1 2 0%0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1.Bullish 2.Bearish 30

  19. Slide 19: Debate: Phosphate Outlook

    Debate 2 Phosphate Outlook

  20. Slide 20: Where do we go from here?

    Where do we go from here? 20 100 200 300 400 500 600 05 06 07 08 09 10 11 12 13 14 15 $ ST Weekly DAP Prices NOLA Barge Source: Green Markets 200 300 400 500 600 700 05 06 07 08 09 10 11 12 13 14 15 $ MT Weekly DAP Prices fob Tampa Source: Fertecon

  21. Slide 21: The Bear Case: It's Just Supply and Demand

    The Bear Case: It’s Just Supply and Demand (Six Minutes)

  22. Slide 22: It's Just Supply and Demand

    It’s Just Supply and Demand 1. The BEAR won the agricultural commodity debate 2. Demand risks still exist 3. Plenty of phosphate from China 4. Other new capacity eventually will start-up or run better this year 5. Ammonia prices will drop even further 22

  23. Slide 23: Demand risks still exist

    Demand risks still exist 23 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F Mil Tonnes India DAP/ MAP/ TSP Imports DAP MAP TSP Souce: CRU, IFA, Mosaic  First-half demand prospects look solid: - Underpinned by the strong harvest rally. - $4 corn and $10 soybe

  24. Slide 24: Plenty of phosphate from China

    Plenty of phosphate from China 24 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 95 97 99 01 03 05 07 09 11 13 Mil Tonnes China DAP/ MAP/ TSP Exports Actual Forecast Source: Fertecon, China Customs, Mosaic  Recent changes in China’s export tax are expected to facilitate large and more orderly exports in 2015.

  25. Slide 25: Ammonia prices will drop further

    Ammonia prices will drop further 25 100 200 300 400 500 600 700 800 05 06 07 08 09 10 11 12 13 14 15 $ MT Ammonia Prices c&f Tampa Source: Fertecon $545 $655 $625  A poor NA fall application season.  Fewer production disruptions this year.  Lower oil prices (European natural gas prices tied to oi

  26. Slide 26: The Bull Case: Something's Happening Here

    The Bull Case: Something’s Happening Here (Six Minutes)

  27. Slide 27: Something's Happening Here

    Something’s Happening Here 1. The BULL won the agricultural commodity debate 2. Bank on India to lead a strong demand rebound 3. Supply changes are tightening the market 4. There are homes for Chinese tonnage 5. Don’t expect much relief from lower raw materials costs 27

  28. Slide 28: Bank on India to lead a strong demand rebound

    Bank on India to lead a strong demand rebound 28 64.5-66.5 30 35 40 45 50 55 60 65 70 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F Global Phosphate ShipmentsMMT Product DAP/ MAP/ MES/TSP Source: CRU and Mosaic 0.0 2.0 4.0 6.0 8.0 10.0 12.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E 16F Mil

  29. Slide 29: Supply changes are tightening the market

    Supply changes are tightening the market 29  More than 1.0 million tonnes of U.S. finished phosphate capacity either closed permanently or shut down in 2014: - PotashCorp closed permanently its Suwannee River complex at mid-year (215,000 tonnes P2O5 capacity or the equivalent of 415,000 tonnes MAP)

  30. Slide 30: There are homes for Chinese tonnage

    There are homes for Chinese tonnage 30 0 5 10 15 20 25 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F China Phosphate ShipmentsMMT Product DAP/ MAP/ MES/TSP Source: CRU and Mosaic  At home: - Phosphate shipments have doubled since the middle of the last decade and continue to grow at moderate rat

  31. Slide 31: Your Vote

    Your Vote

  32. Slide 32: Are you a phosphate bull or bear?

    After those compelling arguments, are you a phosphate bull or bear? 32 1 2 0%0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1.Bullish 2.Bearish 30

  33. Slide 33: Debate: Potash Outlook

    Debate 3 Potash Outlook

  34. Slide 34: Where do we go from here?

    Where do we go from here? 34 100 200 300 400 500 600 700 05 06 07 08 09 10 11 12 13 14 15 $ MT MOP Prices Standard Grade c&f SE Asia Source: FMB 100 200 300 400 500 600 700 05 06 07 08 09 10 11 12 13 14 15 $ MT MOP Prices Blend Grade c&f Brazil Source: FMB 100 200 300 400 500 600 700 05 06 07 08 09

  35. Slide 35: The Bull Case: It's Demand, Stupid

    The Bull Case: It’s Demand, Stupid (Six Minutes)

  36. Slide 36: It's Demand, Stupid

    It’s Demand, Stupid 1. The BULL won the agricultural commodity debate 2. Demand growth is back on track 3. Producer cupboards are low if not bare 4. The potential loss of Solikamsk 2 tightens the market 5. Logistics still are a complicating factor in North America 36

  37. Slide 37: Demand growth is back on track

    Demand growth is back on track 37 58-60 25 30 35 40 45 50 55 60 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F Global Potash ShipmentsMil Tonnes KCl Source: CRU and Mosaic  Record shattering shipments in 2014: - Moderate potash prices, profitable farm economics, and balanced nutrient use. - The “

  38. Slide 38: Producer cupboards are low if not bare

    Producer cupboards are low if not bare 38 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 Jul 2010/ 11 Jan Jul 2011/ 12 Jan Jul 2012/ 13 Jan Jul 2013/ 14 Jan Jul 2014/ 15 Jan Mil Tonnes KCl North America MOP Ending Stocks Source: IPNI  In North America: - Producer inventories plunged 1.7 million tonnes between Jan

  39. Slide 39: The potential loss of Solikamsk tightens the market

    The potential loss of Solikamsk 2 tightens the market 39 0.0 2.0 4.0 6.0 8.0 10.0 12.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E Mil Tonnes KCl Belarus MOP Production Source: Fertecon and Belaruskali 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E Mil Tonnes KCl

  40. Slide 40: The Bear Case: The "Bear" is the Bear Case

    The Bear Case: The “Bear” is the Bear Case (Six Minutes)

  41. Slide 41: The "Bear" is the Bear Case

    The “Bear” is the Bear Case 1. The BEAR won the agricultural commodity debate 2. Shipments could drop from last year’s record high 3. Exchange rates will keep FSU producers in high gear 4. Others will make up the potential loss of Solikamsk 2 5. Most of the logistical issues are behind us 41

  42. Slide 42: Shipments could drop from last year's record high

    Shipments could drop from last year’s record high 42 58-60 25 30 35 40 45 50 55 60 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F Global Potash ShipmentsMil Tonnes KCl Source: CRU and Mosaic  First-half demand prospects look solid: - Underpinned by the strong harvest rally by key crop prices. - D

  43. Slide 43: Exchange rates will keep FSU producers in high gear

    Exchange rates will keep FSU producers in high gear 43 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E Mil Tonnes KCl FSU MOP Production Source: Fertecon, Uralkali and Belaruskali  The U.S. dollar has appreciated nearly 80% vs. Russian Ruble and about 8% vs.

  44. Slide 44: Others will make up the potential loss of Solikamsk

    Others will make up the potential loss of Solikamsk 2 44 30 35 40 45 50 55 60 65 70 75 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E 15F MMT KCl Source: Company Reports, Fertecon and Mosaic Global Potash Capacity  Assuming the Solikamsk 2 mine does not operate in 2015, we estimate that global capac

  45. Slide 45: Your Vote

    Your Vote

  46. Slide 46: Are you a potash bull or bear?

    After those compelling arguments, are you a potash bull or bear? 46 1 2 0%0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1.Bullish 2.Bearish 30

  47. Slide 47: Presentation available on the Mosaic website

    This presentation and other products are available on the Mosaic website 47 http://www.mosaicco.com/resources/market_analysis.htm  Mosaic Stakeholder Handbook  Market Mosaic ▪ Market Alerts ▪ Past Presentations

  48. Slide 48: Thank You for Your Business!

    Bull or Bear? The Great Debate Rahm vs. Jung Mosaic AgCollege Orlando, FL January 13, 2015 Dr. Michael R. Rahm Vice President Market and Strategic Analysis Andy Jung Director Market and Strategic Analysis Thank You for Your Business!

PRESENTATION BEING MADE BY THE MOSAIC COMPANY ON JANUARY 13, 2015 on 6ix