Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — CFI Fertilizer Outlook Forum (February 2009)
27 slides from Mosaic Company (the)'s conference presentation, Feb 12, 2009
Slide 1: The Near Term Phosphate Outlook
The Near Term Phosphate Outlook Regina, Saskatchewan Gord McKenzie Director of Sales Western North America Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement CFI Fertilizer Outlook Forum This presentation 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 future financial and operating results. Such statemen
Slide 3: Current Situation
Current Situation CFI Fertilizer Outlook Forum Customers step out of the market Distribution pipeline plugs Stocks back-up at production points Production declines as a result Crop nutrient markets recalibrate Supply chain exposed to large inventory valuation risk
Slide 4: Customers step out of the market
Customers step out of the market CFI Fertilizer Outlook Forum Build up of distribution pipeline stocks last year A late North American harvest Reduced credit availability in some regions Expectations of lower crop nutrient prices Large drops in energy and raw materials costs Declines in crop prices
Slide 5: Customers step out of the phosphate market
Customers step out of the phosphate market CFI Fertilizer Outlook Forum Year-to-date (Jul-Dec) DAP/MAP domestic shipments were down 47% from the high levels a year ago. Shipments during the last three months (Oct-Dec) were off 60% from a year earlier. Year-to-date (Jul-Dec) DAP/MAP exports were down
Slide 6: DAP/MAP stocks were above 3-year averages
DAP/MAP stocks were above 3-year averages CFI Fertilizer Outlook Forum Reductions in production in North America slowed down the build-up of inventories. Stocks held by producers at both on- and off-site facilities inched up 2% in December to more than 1.8 million tons.
Slide 7: U.S. phosphate production decreases
U.S. phosphate production decreases CFI Fertilizer Outlook Forum Year-to-date (Jul-Dec) U.S. phosphoric acid production was down 23% from a year earlier. The U.S. industry operated at 49% of capacity in November and just 31% of capacity in December. U.S. Phosphoric Acid Production and Op. Rates 1,00
Slide 8: Expectations of lower crop nutrient prices
Expectations of lower crop nutrient prices CFI Fertilizer Outlook Forum Ammonia Prices c&f Tampa $ MT Source: Fertecon The rise and fall of phosphate raw materials costs Sulphur Prices c&f Tampa $ LT Source: Green Markets
Slide 9: Crop nutrient markets recalibrate
Crop nutrient markets recalibrate CFI Fertilizer Outlook Forum Potash Prices Blend Grade fob U.S. Midwest Warehouse $ ST Source: Green Markets Prilled Urea Prices fob Yuzhnyy $ MT Source: Fertilizer Week America DAP Prices fob Tampa Vessel $ MT Source: Fertecon The entire supply chain captured large
Slide 10: Near Term Outlook
Near Term Outlook Nutrient demand prospects begin to improve Another record crop is required in 2009 A rally in agricultural commodities prices Lower crop input costs Better farm economics Demand deferral vs. destruction Reduction in production worldwide Adjustments to get product moving through the
Slide 11: Stock drawdown stopped but not reversed
Stock drawdown stopped but not reversed World Grain and Oilseed Stocks 08/09E L M H Mil Tonnes 10% 13% 16% 19% 22% 25% 28% 31% 34% Percent Stocks Percent of Use Source: USDA and Mosaic (for 09/10 estimates) 2009/10 Scenario Assumptions Low Medium High Increase in Harvested Area (Mil HA) Yield (Devia
Slide 12: From record area and yields
From record area and yields World Grain and Oilseed Area and Yields Mil Hectares 1.50 1.75 2.00 2.25 2.50 2.75 3.00 Tonnes per Hectare Harvested Area Yield Linear (Yield) Source: USDA and Mosaic The global average yield also increased this year (and revised upward this month) due to the potent combi
Slide 13: Crop prices moved higher
Crop prices moved higher (Dec 5 trough to Feb 6 change) +18% or $1.44 bu +20% or $0.71 bu +17% or $0.89 bu 2009 New Crop Prices Daily Close of New Crop Options Jan 2, 2008 to Feb 6, 2009 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb $ BU Dec 09 Corn Nov 09 Soybeans Jul 09 Wheat Source: CBO
Slide 14: Domestic Phosphate Outlook: Case 1
Stock Draw Stock Build Domestic Phosphate Outlook: Case 1 2008/09 Change U.S. Phosphate Demand: -10.5% 2008/09 Change in U.S. DAP/MAP Shipments: -25.9% U.S. Phosphate Use and DAP/MAP Shipments 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 08E 09F Mil Tons P O 5.75 6.00 6.25 6.50 6.75 7.00 7
Slide 15: Large shipments required this spring if DAP/MAP shipments decline 26%
Large shipments are required this spring if DAP/MAP shipments decline 26% this year U.S. DAP and MAP Domestic Shipments 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Mil Tons MIN MAX Range (2003/04-2007/08) 2008/09 Act/Fcst 3-Yr Average Source: TFI and M
Slide 16: Domestic Phosphate Outlook: Case 2
Stock Draw Stock Build Domestic Phosphate Outlook: Case 2 2008/09 Change U.S. Phosphate Demand: -18.8% 2008/09 Change in U.S. DAP/MAP Shipments: -40.4% U.S. Phosphate Use and DAP/MAP Shipments 2.75 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 5.25 08E 09F Mil Tons P O 4.50 4.90 5.30 5.70 6.10 6.50 6
Slide 17: Below average shipments required this spring if shipments run 40% below
Below average shipments required this spring if shipments continue to run 40% below last year Case 2: 40% Drop in U.S. DAP/MAP Shipments in 2008/09 U.S. DAP and MAP Domestic Shipments 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Mil Tons MIN MAX Range (
Slide 18: Global import demand outside of China is expected to drop in 2008
Global import demand outside of China is expected to drop 10% in 2008 Processed phosphate includes DAP, MAP and TSP World Less China Phosphate Import Demand 08E Mil Tonnes DAP/MAP/TSP W Europe Asia Less China Oceania L America Other Source: Fertecon, IFA and Mosaic After surging 12% or 2.3 million t
Slide 19: India imports more than doubled in 2008
India imports more than doubled in 2008 DAP fabrication was down 26% so far this fertilizer year. DAP/MAP imports surged 105% to almost 6.1 million tonnes in calendar year 2008. India Processed Phosphate Import Demand 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Mil Tonnes DAP MAP Source: Fertecon, IFA and Mosai
Slide 20: Latin America imports are expected to decline 32% in 2008
Latin America imports are expected to decline 32% in 2008 Import demand is expected to decline 32% in 2008 due to high carryover stocks in Argentina and Brazil and the re-start of the Fertinal plant in Mexico. Latin America Processed Phosphate Import Demand 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 08E Mi
Slide 21: Brazilian imports dropped about 28% in 2008
Brazilian imports dropped about 28% in 2008 Imports dropped 28% or more than 1.0 million tonnes in 2008 as the country continues to battle with high inventory level. Import demand are expected to remain at very low levels in these few months. Market condition deteriorated and fertilizer shipments to
Slide 22: Argentine imports dropped 43% in 2008
Argentine imports dropped 43% in 2008 Total processed phosphate import demand from Argentina declined 43% or 580,000 tonnes to 780,000 tonnes in 2008. The market needs more time to work off relatively high stocks in the distribution pipeline. Argentina Processed Phosphate Import Demand 0.0 0.2 0.4 0
Slide 23: Exports are expected to be down from major exporting regions
Exports are expected to be down from major exporting regions Processed phosphate includes DAP, MAP and TSP U.S. processed phosphate exports dropped from 12 million tonnes during the last half of the 1990s and from 9 million tonnes during the first half of this decade to about 5.6 million tonnes in c
Slide 24: China exports plunged more than 50% in 2008
China exports plunged more than 50% in 2008 DAP and MAP exports in December totaled less than 80,000 tonnes. DAP/MAP exports plunged more than 50% to 1.8 million tonnes in 2008. Chinese export taxes and procurement strategies cause uncertainty and China will remain a wild card in 2009. China Monthly
Slide 25: Moroccan exports dropped 37% in 2008
Moroccan exports dropped 37% in 2008 Moroccan processed phosphate exports dropped 37% in 2008. OCP announced the shutdown of the large Jorf Lasfar complex starting on November 1 in response to the slowdown in phosphate shipments. Morocco Processed Phosphate Export Supply 0.0 0.5 1.0 1.5 2.0 2.5 3.0
Slide 26: Near Term Outlook
Near Term Outlook Nutrient demand prospects begin to improve Another record crop is required in 2009 A rally in agricultural commodities prices Lower crop input costs Better farm economics Demand deferral vs. destruction Reduction in production worldwide Adjustments to get product moving through the
Slide 27: The Near Term Phosphate Outlook Thank You
The Near Term Phosphate Outlook Thank You Regina, Saskatchewan Gord McKenzie Director of Sales Western North America
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