Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — IFA Fertilizer Demand Meeting (May 2010)
28 slides from Mosaic Company (the)'s conference presentation, May 28, 2010
Slide 1: U.S. Crop Nutrient Demand Outlook: Recovery and Moderate Growth Prospects
U.S. Crop Nutrient Demand Outlook Recovery and Moderate Growth Prospects Dr. Michael R. Rahm Vice President Market and Strategic Analysis Paris, France May 31,
Slide 2: Topics
Topics The Collapse of 2008/09: A Post Mortem The Recovery of 2009/10: A First Read Medium Term Outlook: Moderate Growth Prospects Positive agricultural outlook and farm economics Further increases in corn based ethanol production Crop-nutrient-using technical change
Slide 3: The Collapse of 2008/09: A Post Mortem
The Collapse of 2008/09: A Post Mortem No official statistics yet Large estimated declines especially in P&K use N: -5% to -7% P: -15% to -20% K: -35% to -40% Estimates based on: Unprecedented drop in domestic shipments 2008/09 statistics released by a few states Survey data Large drawdown of stocks
Slide 4: 2008/09 Demand Collapse in Pictures
2008/09 Demand Collapse in Pictures 09E Fertilizer Year Ending June 30 U.S. Nutrient Use Source: AAPFCO and Mosaic 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 09E Fertilizer Year Ending June 30 U.S. Nitrogen Use Source: AAPFCO and Mosaic 2.25 2.75 3.25 3.75 4.25 4.75 5.25 5.75 09E Fertilizer Yea
Slide 5: Collapse in NA Phosphate Shipments and Use
Collapse in NA Phosphate Shipments and Use 4.4 4.5 4.6 4.6 4.2 4.3 4.3 4.6 4.3 4.8 4.6 4.5 4.6 4.2 3.5 U.S. DAP/MAP shipments were less than the minimum of the five-year range in 8 months of 12 months during the 2008/09 fertilizer year. Shipments were especially slow during traditionally strong ship
Slide 6: Collapse in NA Potash Shipments and Use
Collapse in NA Potash Shipments and Use 5.5 5.6 5.8 5.7 5.4 5.3 5.3 5.3 5.3 5.9 5.5 5.1 5.6 5.0 3.1 NA MOP monthly shipments trended downward throughout the 2008/09 fertilizer year. Implied May shipments of about 195,000 tons KCL were approximately 1.0 million tons less than the three- year average
Slide 7: State Statistics Show a Large Drop in 2008/09
State Statistics Show a Large Drop in 2008/09 2008/09 Change from Five-year Average Total Shipments -25% Nitrogen -13% Phosphate -41% Potash -53% 2008/09 Change from Five-year Average Total Shipments -17% Nitrogen -7% Phosphate -35% Potash -36% 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 4.25 Mil T
Slide 8: Survey Indicates a Large Decline in 2008/09
Survey Indicates a Large Decline in 2008/09 Source: IPNI and TFI. 2009 North American Retail Fertilizer Survey.
Slide 9: High Prices the Main Reason for Declines
High Prices the Main Reason for Declines Source: IPNI and TFI. 2009 North American Retail Fertilizer Survey.
Slide 10: De-stocking From the Pipeline to Farm Field
De-stocking From the Pipeline to Farm Field 4.4 4.5 4.6 4.6 4.2 4.3 4.3 4.6 4.3 4.8 4.6 4.5 4.6 4.2 3.5 5.5 5.6 5.8 5.7 5.4 5.3 5.3 5.3 5.3 5.9 5.5 5.1 5.6 5.0 3.1 De-stocking of the distribution pipeline DAP/MAP: 800,000 to 1.0 million ton decline MOP: 1.4 to 1.6 million ton decline Crop removal ex
Slide 11: Topics
Topics The Collapse of 2008/09: A Post Mortem The Recovery of 2009/10: A First Read Medium Term Outlook: Moderate Growth Prospects Positive agricultural outlook and farm economics Further increases in corn based ethanol production Crop-nutrient-using technical change
Slide 12: The Recovery of 2009/10: A First Read
The Recovery of 2009/10: A First Read Demand recovery N: +5% to +7% P: +17% to +22% K: +35% to +40% Estimates based on: Strong rebound in domestic shipments Good to ideal weather this spring Anecdotal reports from customers Cautious distributors and a de-stocked pipeline Just-in-time inventory No-pr
Slide 13: 2009/10 Demand Recovery in Pictures
2009/10 Demand Recovery in Pictures Million Tons N+P2O5+K2O Million Tons P2O5 Million Tons N Million Tons K2O 09E10F Fertilizer Year Ending June 30 U.S. Nutrient Use Source: AAPFCO and Mosaic 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 09E10F Fertilizer Year Ending June 30 U.S. Phosphate Use Source
Slide 14: DAP/MAP Shipments Up 49% So Far This Year
DAP/MAP Shipments Up 49% So Far This Year 4.4 4.5 4.6 4.6 4.2 4.3 4.3 4.6 4.3 4.8 4.6 4.5 4.6 4.2 3.5 4.2 U.S. DAP/MAP shipments surged in April reflecting strong farm demand. Year-to-date (Jul-Apr) shipments totaled 5.9 million tons, up 49% from the low levels a year earlier. Shipments are projecte
Slide 15: MOP Shipments Up 39% So Far This Year
MOP Shipments Up 39% So Far This Year 5.5 5.6 5.8 5.7 5.4 5.3 5.3 5.3 5.3 5.9 5.5 5.1 5.6 5.0 3.1 4.2 MOP domestic shipments exceeded three-year averages for the first four months of 2010. In fact, MOP shipments in Q1 were up 340% or 2.5 million tons from the low level a year earlier. Shipments incr
Slide 16: An Early Spring Supports Demand Recovery
An Early Spring Supports Demand Recovery Report Week Ending (Sunday) U.S. Soybean Planting Progress -yr Range 5-yr Avg May Jun Report Week Ending (Sunday) U.S. Corn Planting Progress 10-yr Range 5-yr Avg Apr May Jun Almost 70% of the U.S. corn crop was planted by May nd this year. Corn planting was
Slide 17: Topics
Topics The Collapse of 2008/09: A Post Mortem The Recovery of 2009/10: A First Read Medium Term Outlook: Moderate Growth Prospects Positive agricultural outlook and farm economics Further increases in corn based ethanol production Crop-nutrient-using technical change
Slide 18: Medium Term Outlook: Moderate Growth Prospects
Medium Term Outlook: Moderate Growth Prospects Positive agricultural outlook Recent stock build cushions a potential supply shock Steady demand growth vs. supply step changes High futures prices and solid farm economics Further increases in corn based ethanol production Energy Independence and Secur
Slide 19: Stock Build Cushions a Potential Supply Shock
Stock Build Cushions a Potential Supply Shock 2010/11 Scenario Assumptions Low Medium High Harvested Area Change 1.5% 1.5% 1.5% Yield Deviation from Trend Largest Negative Largest Positve Demand Growth 2.0% 2.5% 3.0% 10/11 10/11 10/11 L M H Days of Use Mil Tonnes World Grain and Oilseed Stocks Stock
Slide 20: Steady Demand Growth vs. Supply Step Changes
Steady Demand Growth vs. Supply Step Changes 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 10/11 10/11 L M H Bil Tonnes World Grain and Oilseed Production and Use Production Use Source: USDA and Mosaic (for 10/11 L/M/H scenarios)
Slide 21: Record Harvested Area and Yields Required
Record Harvested Area and Yields Required 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 10/11 10/11 10/11 L M H MT Ha Mil Ha World Grain and Oilseed Harvested Area and Yield Harvested Area Yield Trend Source: USDA and Mosaic (for 10/11 L/M/H scenarios)
Slide 22: Still Strong Signals for the Next Three Years
Still Strong Signals for the Next Three Years 3.50 3.75 4.00 4.25 4.50 4.75 5.00 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun $ BU New Crop Corn Prices Daily Close of New Crop Options June 2, 2009 to May 24, 2010 Dec 2010 Dec 2011 Dec 2012 Dec 2013 8.00 8.50 9.00 9.50 10.00 10.50 11.00 Jun Ju
Slide 23: Still Solid U.S. Midwest Farm Economics
Still Solid U.S. Midwest Farm Economics $0 $100 $200 $300 $400 $500 $600 $700 2009E 2010E 2011F $ Acre Source: Iowa State University and Mosaic Return After Variable Cost for a U.S. Midwest High Yield Farm Operation Soybean Corn Following Soybean Corn Following Corn
Slide 24: Renewable Fuel Standard
Renewable Fuel Standard U.S. Renewable Fuel Standard (bil gal) EISA 2007 RFS2 EPAct Total Advanced Biofuel Conventional Renewable Total or Total Less Year RFS1 Fuel Advanced Cellulosic Advanced 4.00 na na na na na 4.70 na na na na na 5.40 9.00 na na na 9.00 6.10 11.10 0.60 na 0.33 10.50 6.80 12.95 0
Slide 25: Ethanol Production Expected to Increase
Ethanol Production Expected to Increase 0% 2% 4% 6% 8% 10% 12% 14% 16% Percent Bil Gal Source: EIA and Mosaic U.S. Ethanol Production Forecast Actual Percent of Gasoline Use
Slide 26: Crop-Nutrient-Using Technical Change
Crop-Nutrient-Using Technical Change 48-row planter capable of planting more than 1000 acres per day New seed technology Traits to make plants thrive in high population environment Implications for the entire crop input bundle Equipment Crop protection chemicals Crop nutrients Twin Row Conventional
Slide 27: Medium Term Forecasts in Pictures
Medium Term Forecasts in Pictures 10F 12F 14F Fertilizer Year Ending June 30 U.S. Nutrient Use 9.0 9.5 10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 09E10F11F12F13F14F15F Million Tons N Fertilizer Year Ending June 30 U.S. Nitrogen Use 3.00 3.25 3.50 3.75 4.00 4.25 4.50 4.75 5.00 09E10F11F12F13F14F15F Fert
Slide 28: Thank You!
U.S. Crop Nutrient Demand Outlook Recovery and Moderate Growth Prospects Thank You! Dr. Michael R. Rahm Vice President Market and Strategic Analysis IFA Fertilizer Demand Meeting Paris, France May 31,