Earnings Call: Q1 2020

May 5, 2020

Good morning. Thank you for listening in on our first quarter virtual Fireside chat. By now, you see our earnings release and the commentary. And so we would like to spend an hour or so answering the questions we received last night. We'll do our best to answer every question. And we've consolidated questions where they're similar to each other. Before we begin, I would like to reiterate our key things. First, our markets are holding up well, and global fertilizer demand is strong. COVID 19 is obviously made for a very dynamic business environment. That agriculture must and will continue to produce. And secondly, we're delivering strong operating performance and making real strategic progress across the me with lower cost, increased efficiency, and created leverage for the years ahead. So now, Laura, let's take the first question. Jacques, we've received similar questions from Rick and Patel at Berenberg and Chris Parkinson at Credit Suisse. Given your progress on per ton costs, can you comment on any updated projects versus your initial goals in all three segments? How sustainable are these cost levels going forward and could there be further upside considering that it's only first quarter 20? Finally, is there any scope to accelerate some of the company's cost reduction plans that were meant for 2021 into this year? Thank you for your question. Look, as we continue to pursue transformational opportunities across our business, We are looking at what are the critical few projects that we can continue through this COVID nineteen that really will make a difference over the long term for Mosaic. In potash, the first of these of course is the K3 development. Today, we have 3 minors running. Soon to have 4. And by the end of the year, we'll be close to eliminating the need for the k 1 bind. That's a big step forward in this project and really a a nice Segway into having no need for brine inflow costs and pushing K3 to being the most efficient line in the world. In terms of fertilizantes, whether it's the optimization of freight or cost reductions in through, energy and our beneficiation, or driving our rock cost lower. We're well on track towards our 2020 2021 cost reduction targets there. And, of course, if we can accelerate those, we will. In Phosphates, whether it's our next generation mining initiative or our next gen processing initiatives. We're using technology and automation to drive costs, and drive efficiency in that business. So across the business, despite the interference of COVID, we are really pushed on those critical ones that'll make a difference in the long term to Mosaic. Joc, P. J. Juvekar at Citi Ask. How are you thinking about your EBITDA covenant And what happens if EBITDA continues to fall? Thank you, PJ. We are comfortably above our EBITDA to interest rate covenants. But I what I will do here is I'll let Clint give you some details on that. K. Thanks, Jock, and, and thanks, P. J. For your questions. Jock said, you know, I think the question that you have really focuses in on our interest coverage ratio, which, which uses adjusted EBITDA. And as Jack said, we have plenty of room, in that ratio right now. It is calculated on a rolling 4 quarter basis. So certainly keep that in mind. The other thing is as you're calculating that to keep in mind is that similar to our reported adjusted EBITDA, the, the covenant does adjust for things like foreign exchange gains and losses, share based compensation expense, and, losses for asset write down. So Just be sure that you're adjusting your math for those items as you're, looking at that ratio. Josh, this next question comes from Jonas Oxgaard at Bernstein. You spent $264,000,000 on CapEx in Q1, but you're still guiding to 1,200,000,000 for the year. Run rate for q 1 is 1,050,000,000. Are you picking up spending in quarters 2 through 4? And if so, why? Thank you, Jonas. Yeah. We did make a conscious effort to conserve cash in Q1, and we normally do that as that is our lowest cash flow quarter. So we try not to spend as much capital in that quarter if we can help it. And with COVID, We were even more focused in the first quarter, but we do expect some acceleration of spending as we go through the year. Particularly in the summer months in Canada. As you know, K3 is our biggest expenditure, single expenditure area. And on that, A lot of that work is gonna go this summer, but we believe that that work is necessary. And as we've said previously, will drive lower cost and more efficiency in the long run. In terms of other capital, yeah, by all means, we're gonna try and minimize what we do throughout the end of the year, but at the same time, we still have to look after the quality of our assets and the safety of our people. That is always our first forecast. Jack, this next question comes from Chris Parkinson at Credit Suisse. How should we think about transportation and logistics costs in terms of both inland and seaborne freight? Is it safe to say rates could be a minor tailwind to FOB netback prices. Thank you, Chris. Yeah. We're definitely enjoying lower transportation costs right now, which is providing a bit of tailwind. Of course, the cost of fuel is helping us from a a rail and ocean freight perspective. And on rail, there's an extra efficiency in that we're not transporting as much of other products, so it adds a lot more availability to us. In terms of ocean freight, while ocean freight is helping us, it's also helping the whole industry. And so the bigger impact there is it'll probably trade change the trade flows rather than make a real difference to our competitiveness. This next question comes from Jonas Oxgaard at Bernstein. Can you talk about the drivers of differences between rock cost per tenant, Florida? Versus Brazil. What is the long term goal for Brazilian rock costs and what is the rock cost per ton in Peru? Thank you, Jonas, for the question. In in terms of our rock mining costs, we have a very different mining method in Florida versus Brazil. And the main reason for that is in Florida, we have a sedimentary deposit where we're able to use large drag lines to move the rock. In Brazil, it's a an igneous deposit, and we have to blast and use truck and shovel to move move the ore in that situation. So Brazil will always have a slightly higher cost per ton than the US will have But the advantage, of course, is you don't have freight from the coast up to our growing regions or up to Uber, which was where we will use the rock. So in location, it's very competitive. Long term, we've put out our goals as having rock costs in the range of 300 reais per ton. We still see that as being a good goal. And we believe we'll achieve that goal. Matter of fact, I think we've achieved that goal this year. So we're we're doing well on rock costs. We expect to continuously improve And, that's really a good thing. In terms of Peru, again, it's a truck and shovel operation, but it is a sedimentary rock, so we don't have to blast. So they have pretty good costs. They're somewhere in between, our Florida costs and our Brazilian costs. Josh, the next question comes from Vincent Andrews from Morgan Stanley. Can you provide some additional detail related to how Mosaic will realize the sales from the new China contract and how much Chinese potash volume will your 2nd quarter results reflect? When will you recognize the volumes in the bonded warehouses China. Thank you, Vincent. The way we deal with potash sales outside of Canada is through Canpotex, and we follow Canpotex's revenue recognition standards. So those tons in bonded warehouses have largely been recognized. Although I will say there will have to be an adjustment for changes in price that we will recognize in Q2. Actually going to be directed to our own distribution business. And so they're sitting today in our corporate segment in profit and inventory. And so that will move as we make the final sale of those products. Jack, we have a multi part question from Seth Goldstein from Morningside Research. This all retains to k 3. What is the expected effective production capacity for 2020? What is our total expected production? As a percent of total or in tons, and should Mosaic decide to reduce potash production, would any of it come from K3? Thank you, Seth. As we look at 2020 K3, by the end of the year, we expect we'll be running in that 2a half to 3,000,000 tons per year of actual potash produced coming out of K3. As I asked said earlier, that will allow us to virtually eliminate the k 1 mine and have all the k 1 plant be fed by the k 3 mine. In terms of this year, we expect to production from the k 3 mine. If we have to turn down production, Certainly, it will not be from k3, which is by far our most efficient underground production today. Chuck, our next question comes from Vincent Andrews at Morgan Stanley. How much volume in North America was actually pulled forward from Q2 into Q1. Thank you, Vincent. In in fact, if we look at the volumes, Probably the bigger impact on volume was what would have been q 4 volume last year coming into q 1, We had late fall, but it continued well into the late late fall and into the winter months. And so the revenue recognition in Q1 was impacted by tons that would have normally moved earlier in the year in Q4. In terms of moving tons from Q1, from Q2, I think that effect will be minimal as although we got acceleration of people ordering and taking delivery, there is a lag for revenue recognition. And so from a revenue recognition, perspective, many of the tons that might have been shipped in March will actually be recognized in the second quarter. Josh, the next couple of questions retained to Mosaic Fernandez. Steve Byrne from Bank of America wants to know What is the long term growth potential for the Fertilizantes business? Is it becoming a bigger producer or a larger distributor or to expand into full service retail. Thank you, Steve. As you're well aware, There is great long term potential for Mosaic Fertilizantes. This business gives Mosaic a real first mover advantage in Brazil. And as such, we think there's tremendous opportunities to become either a bigger producer, through organic or inorganic means, It allows us an avenue to distribute our value added products like MicroEssentials and continue to grow that market. In terms of whether we would move move into a more retail base, at this stage, that isn't really our strategy, and we don't believe that that where this business should go in the long term. Scott, the next question comes again from Vincent Andrews at Morgan Stanley. With the significant devaluation of the reais in 2020, how much will that impact Mosaic's gross profit and how much will impact the SG and A line? Thank you, Vincent. We have provided sensitivities to changes in FX rate in the appendix. However, what I will emphasizes, these were done on an unhedged base. So when you think about it, you have to think about the fact that we have hedged about half of our, real, real eye based exposure. In terms of SG And A, about third of our costs in SG And A are actually rebased. So that gives you an idea on the impact to Brazilian SG And A. The next few questions doc pertain to our phosphate segment. So both Adam Samuelson from Goldman Sachs and Mark Conley from Stevens are interested in hearing Mosaic's perspective on the outlook for sulfur over the balance of 20.20 given the curtailments in the global energy sector. And the implications for input costs. Can and would you carry higher than normal sulfur inventory through the course of 2020 and into 20 21. Thank you, guys. Certainly, the oil industry disruption is having a knock on effect in terms of sulfur. At Mosaic, there's 2 things we're doing to really help our sulfur situation. 1, as you suggested we are moving to a higher level of inventory to make sure we have a better buffer. And then secondly, we've actually been sourcing cheap or cheapish sulfuric acid to supplement our supply. Now that has worked out quite well because other industries have slowed down. But in terms of the overall world sulfur market, one of the things I will say is Mosaic is probably better positioned than most because of our position in the US Gulf. And remember, in the US Gulf, while the production is down, They're using more heavy crude right now, which produces more sulfur. Certainly, there is going to be periodic and localized offer deficiencies around the globe. But I think in that, Mosaic will be positioned best to weather the storm. Jack Gulf, Mark Connelly, from Stevens, and Steph Goldstein from Morningside, have questions related to our MicroEssentials product. First, what are the main things Mosaic needs to do to reach its micro central sales target for 2021? Is there a trade off in application between soy and corn planted acres? How would crop prices remain at or near current levels affect the pace or probability of reaching that target. And finally, how much do you expect Brazil to contribute to Microsoft's growth in 2020? Thanks, folks. I'm gonna hand this one straight to rip because I think he can give a more complete answer. Yeah. Thanks, Joc. And, and for us to kind of achieve the goals we have for for MicroEssentials, We need to continue to provide the agronomic support that we're doing to customers and to dealers that distribute the product. As well as we need to help them focus on maximizing the returns of their crops and in years where where crop prices get difficult, we can we see that people focus on maximizing the return, and we've seen good growth in MicroEssentials. As far as the corn and soybean, ratio, we've got products that are specific to MicroEssentials products that are specific to corn, to soybeans, to canola, and we'll match up the needs of the farmer and the need to the crop. Thanks, Rick. And let me add, because North America is a mature market, the growth there is somewhat lower than than in other markets. And in Brazil, we expect up to 60% of our growth will come from that market. Jack, we have another MicroEssentials related question. What is the expected mix shift between commodity products and MicroEssentials or other specialty products, and would this impact the margin mix? Thanks, Joel. Our 2021 goal continues to be achieving a final MicroEssentials. Sales number of about 3,700,000 tons. And that normally gives us an average premium of about $40 a ton over DAP and math. So it is certainly our best margin product but we also get the retailer, the distributor margin there. And so, you know, in Brazil, it's by far our most profitable and and really adds to our margins. Doc, Joel Jackson from BMO asks, what levers does Mosaic have to ensure phosphate doesn't continue in negative margin territory under the current pricing environment Well, thank you guys. Let me answer those one at a time. Certainly, our next gen mining and next gen processing will improve both our recovery rates and our costs in the phosphate business. Also, we're doing other things like considering the integration of our phosphate and potash business, which takes significant costs out of those businesses. So It's not just the technology. It's all the other day to day stuff that goes with it. In terms of, phosphate production reductions, We've always said we will match the needs of our customers with our production. At this stage, we believe that We are matching that effectively, and there will be no need for, production re reductions. And we believe that the demand is there today, and it's so prices should follow in time. In terms of our overall costs, these have been pretty much constant in phosphates for up to 10 years, and we're able to each year improve in such a way that we're taking the impact of inflation out of our costs, which I think is actually making us much more competitive in the main term. Chuck, Chris Parkinson from Credit Suisse asked, what is your forecast for long term stripping margin assumptions based on your outlook for raw materials and the view on marginal cost of production out of China. Thank you, Chris. As we look forward and we look at the raw materials, we believe those basically, are passed on to the consumer. So if we look at a balanced market for phosphate, we would look at probably what we've said before, which is a net global price. In that range of $2.85 to $3.10. Obviously, at times, it's going to be below that and above that at other times, But if we look to the long term average, I think that's where we would where we would post it. John, I'm gonna move on to the market related questions. Many of them were multi parts, and I've done my best to summarize those. The first question, comes from Ben Isaacson at Scotia, Seth Gold's unit morning side, and Rick and Patel at Berenberg. They've all asked about new Chinese contract. Pricing, including when do you think the seaborne trade to China will pick up again given the amount of potash and bonded warehouses? How did the price compare to your expectations and how frequently do you expect these contracts to reset in another 12 months or 18 months? And what is the outlook for volumes contracted to China and India? Thank you, guys. Let me take these one at a time. First of all, we expect that the actual shipments to China will start almost immediately. Yes. There is material in bonded warehouses. But our expectation is that we'll go and start filling up the NPK plants and the and the retailers very quickly. And what will come behind will be the refill for the fall. How does the price compare to our expectations in that, you know, certainly we're disappointed in a in a price as low as as came in, but I will emphasize China is still an important base contract. And, you know, the thing there is to get the volumes moving, We've already seen the ability to move prices up in Brazil since we got that contract settled. So the big thing there is really get it done. Move move forward and work on moving prices up in the rest of the in the rest of the world. The 3rd piece in terms of volume for China and India, we do expect imports to China will be down slightly to I think around 8,000,000 tons. And in terms of India, they'll be up maybe half a 1,000,000 tons to 4a half 1000000 tons. So Basically, the 2 of them kinda balance off, and we see a a fairly flat year for those 2 big contracts. Josh, the next question comes from Vincent Andrews at Morgan Stanley, specifically addressing slide 5. Slide 5 argues that the 2020 Chinese potash contract could set off a similar potash price run as the settlement did in 2016. What are the similarities and differences to S And D, US dollar, and soft commodity prices that both support and refute such a comparison. And in particular, given the substantial volume sitting in Chinese bonded warehouses today, will the potash market really be able to have a near term price upswing if the industry is not actually shipping material incremental potash to China in the next quarter or so. Thank you, Vincent. Let me hand this straight over to Rick, and he can give you a a good answer on that one. Yeah. Thanks, Joc. And Vincent, it's, it really is amazing how much the this year lines up to what we observed, coming out of 2016 and the settlement from from China. The, you know, the industry sentiment at the time went after entering through a period of prolonged oversupply. It was, the expectation was for, the prices to remain remain soft. But the fact that the China volume occurred and the contract occurred almost immediately, we saw the market kind of kind of step up. And I think one of the questions that you need to ask yourself, or what are the similarities that, that are happening today that are that happened at at the last time. You know, generally speaking, the dollar is not much different than it was 3 to 4 years ago. With the exception of Brazil, which frankly is positive for for commodities. Ag commodity prices for the most part were weaker, today than they were in 2016 2017, but if you remember, we also saw corn futures bouncing around the low $3 range then as well. And, the other current done current uncertainty is the COVID 19. But we think overall, this is a very good analogy to look at and to understand. And to the question of, can we see price up upticks? We're already seeing that in Brazil where we've We've sold potash at a much higher level. Chris Parkinson's at, Credit Suisse and PJ Juvekar from Citi, both ask questions on the potash cost curve. So, Joc, can you discuss your views of the global potash cost curve and who might be profitable at a $215 per metric ton CFR Brazil price. In particular, what is the benefit of the depreciation in the Russian ruble for Russian producers. And do you think $220 per ton marks the near term 4? Thank you for your question, guys. There's no question that even at $215, the players on the far left of the Costco particularly, the Russians and the Belarus Russians right now will be cash positive at the at a 215 CFR Brazil price. But remember, That does not include the cost of sustaining those businesses, replacing reserves, etcetera. So I don't think it's a long term sustainable cost. But I believe the lower cost players will be reasonably comfortable at those costs for a short period of time. Jack, the following question comes from Mark Connelly at Stevens. Why is it to any producer's advantage to place any significant app or near the Chinese market. Thank you, Mark. The question about why we would put product into bonded warehouses when there isn't a contract. It is a delicate balance between continuing to keep production going, product flowing, If there's an anticipation of a contract in the near term, I think it certainly makes some sense to advanced some product to those markets. However, I would agree that in this case, that was used more than probably was helpful and it did delay the ultimate settling of the contract. The following question comes from Adam Samuelson at Goldman Sachs. Asking more broadly about the potash market. Well, they lowered its global potash shipment forecast by 2,000,000 tons relative to its February forecast. Versus a downwardly revised 2019 level. Given that at least 1,500,000 tons of 4th quarter 2019 production curtailment and 1,500,000 tons of new capacity coming on stream in 2020. Do you expect similar production curtailments in the second half of twenty twenty? As we saw in the second half of twenty nineteen, and is Mosaic now planning for lower production and shipment than it was in February? Thank you, Adam. Yeah. There's no question. The production will be down from what it was. Previously. And we've seen reduced operating rates carry through from last year into 2020. For example, Nutrien's bouncequake facility is down. And you're aware, earlier this year, we decided that we would keep Calante down indefinitely. So that's coupled with a few albeit small production cuts due to COVID 19 issues around the world. We don't see a market being particularly burdened by supply. This is also supported by our view that there will only be about a million tons of of incremental production coming on this year. Between SQM KPLSS and EuroChem, and with the commissioning of the Petrozovsky mine in Belarus. As for Mosaic's production, we continue to maintain. We will match our production with our customer's requirements. So know, we will continue to monitor global demand, and we will make adjustments as it's required. Ben Isaacson from Scotia App if you're seeing any abnormal demand patterns related to weather, farmer economics, or COVID 19 in either potash or phosphate. Thank you, Ben. Let me start by saying weather is always a factor in our business. And right now, weather is actually probably helping us because we have a very normal year in the in the North American market, and it looks like we're going to have pretty strong spring season. So overall, weather is always plus and minus, but this year, I think, is probably helping us overall. In terms of farmer economics, certainly or COVID 19, certainly at this stage, we have not seen any impacts from either of those. Although as we look to the long term, they certainly will become a factor if farmer economics become weaker. One area where all this turmoil is helping us is in places like Brazil and India. We're saw solid farmer economics and positive farmer sentiments. Is actually driving purchase activity. Josh, the next question comes from Steve Byrne, Bank of America. In your opinion, what is the primary reason faucet and potash prices declined throughout 2019? And what will be the mechanism for reversal? Thank you, Steve. If we look back on 2019, I think the biggest thing there was actually the demand shock of the North American market. North America had a bad fall in 2018, a bad spring in 2019, and really a late fall in, in 2019. So more than anything, this was not a supply driven occurrence. It was more of a demand driven occurrence and mostly through the US bad spring. Other than that, it should be a relatively normal year this year. And so what we believe the mechanism for reversal will be is a good American Springwood we're seeing today. We have another question from Steve Jock. The upper end of your phosphate volume forecast range for 2020 is not even to the 2018 level and the upper end of the potash forecast range is equal to the 2018 level? What happened to the thesis missed applications in 2019 would be applied in 2020. Thank you, Steve. In phosphate, the primary driver shipments not reaching the 18 level is China. And in that market, the demand has declined and as such, so is production. Now as we get into 2020, we see that demand level in the area of China has stabilized as such. We can see further growth as we go forward. In potash, we we've certainly seen demand rebound in places like North America, India, and continued growth in Brazil. The one area where we haven't seen great demand has been Southeast Asia, particularly Indonesia, Malaysia, where palm prices have given us some concern about ongoing demand this year. Jeff Zukoskis, at JPMorgan, P. J. Juvekar at Citi, and Adam Samuelson from Goldman Sachs, all ask questions on the Chinese phosphate exports. First, what is your outlook for Chinese exports in 2020? Can Chinese exports catch up after COVID nineteen And what is a breakeven price for Chinese export producers? Thank you, folks. As you're well aware, Production from Dubai's province was was low in the 1st quarter. And then Once production restarted, it was really refocused on the domestic market. As we follow through the year, We expect that production shortfall and as such, some of the 500,000 tons of deficiency in terms of their exports will be made up, and we expect to end the year with somewhere around 9,500,000 tons of Chinese exports. Doctor, the following question was raised by Ben Isaacson at Scotia and Rick and Patel at Berenberg. What are you seeing in demand growth for China this year? And what is the impact of COVID 19? Thank you guys. Preliminary indications on the spring season show that phosphate demand has stabilized. With DAP demand likely ending up slightly higher year over year, while MAP demand is probably down modestly. In terms of COVID 19, it just doesn't appear that it's too much of an intact impact on domestic phosphate consumption, and I think the reasoning is simple. First of all, the Chinese government is focused very much on food production. You know, as a good example, support price for corn is up 9% to $7.50 a bushel. So that really is a good incentive for the Chinese farmer to plant. Jock, both PJ Juvekar at Citi and Chris Parkinson from Credit Suisse. Asked about the supply in in 2020 through 2022 and shorter term with global competitors curtailments behind them you expect more phosphate imports into the US post planting this year. Thank you folks. I'm gonna hand this one straight over to Rick to give you the detail on our expectations of longer term F and B. Yeah. Thanks, Jack. You know, this week, we'll be providing in in our investor presentations an update of, the S and D outlook. But frankly, once we get through 2020 and the the expected OCP ramp up and debottlenecking activities, along with the ramp up of several smaller facilities in Egypt and Turkey. We expect the market to be much more balanced as we go into into 2021 with most of the per most of the production additions behind us. And as for the near term, there was 2 or 3 there are 2 or 3 vessels that are arriving frankly too late for the rapidly advancing spring season, and those will not make it into the north to sup to be worked into the supply. Those are gonna provide near term price pressure, but we believe it to be transitory. Josh, we have 2 related questions from Vincent Andrews at Morgan Stanley and Adam Samuelson at Goldman Sachs. Why is potash demand benefiting from the strong Brazilian farmer economics more than phosphate and this pertains to the global shipment forecast we included in our deck. And second, can you bridge the difference between strong farm level economics and the tempered shipment outlook. Thanks, guys. We believe that Strong Brazilian farmer economics has helped both phosphates and potash this year. If there's any difference in the growth between the two, It is simply our estimate of channel inventory as we enter the year. So in some cases, OffSafe may have had a higher channel inventory. And as such, that has to be worked down before we get expected higher shipments. Other than that, we really believe that Brazil will be a highlight in the whole global demand for both phosphate and potash. And as you've seen from our results, certainly from a volume spectrum. The first quarter highlights that. Josh, the following question was raised by Rick and Patel at Berenberg. As the Brazilian planting season draws closer in the second half of the year, are there any mitigating factors you can put in place to lessen the impact of logistical issues exacerbated by COVID 19? And if so, what would those be? Thank you, Rick. We've already taken a number of actions with respect to COVID 19. And as such, You know, we've seen very little impact to our, our business. And I we believe a big piece of that is these precautions we've taken. We've taken those in Brazil and in North America in all our production facilities, but we're also protecting all our supply chain partners as best we can. So we're practicing all the CDC guidelines. We're changing shift schedules. We're making sure that we don't bring our carriers into our platform, a perspective of truck drivers, etcetera. So we're trying to make sure that we do everything we can protect ourselves. In addition, we have an advantage in that we are generally, using private ports in Brazil. So we think we can do a lot and have already done a lot to allow for us to continue uninterrupted through this COVID issue. And let me add, you know, we're taking some extraordinary steps like even having our kitchen prepare meals for the drivers as they arrive so they don't contact people on their trip into our plants. The following question comes from Jonas Oxgaard at Bernstein. We keep hearing reports of specialty crops being scarted or plowed under due to logistical issues or labor shortages from COVID 19. Are you seeing any negative impact on fertilizer demand for specialty crops. Thanks, Jonas. From from our perspective, we really haven't felt any impacts today. Now There is a chance that this could be a function. There's a great strength of demand from the much larger row crop sectors, and that could be masking any negative impact from the specialty crop sector. Doctor, last question submitted last night comes from both Adam Samuelson at Goldman Sachs. And Mark Connelly at Stevens, and it's with respect to corn acreage imbalance. Given that 51% of the corn acreage has already been planted ahead of the five year average, what is your acreage forecast and what gives you confidence in that figure if it's different than the USDA? Also, You mentioned corn demand in China as they rebuild their herds, but we're hearing African swine fever might not be under control. Can you tell us what you're hearing? Thank you, folks. I'll take these one at a time. First of all, we see corner acres around 94,000,000 acres. And while the USDA was noting 97000000 acres, this was based on survey data before a lot of the COVID 19 impacts were felt. We have heard from our customer base that there was some switching, and there will be some switching from corn over to beans, but a lot of our largest customers have not seen too many corn acres come in below their initial USB expectations. So we think our our estimates are pretty realistic. In terms of African swine fever, there have been reports of some small scale African swine fever outbreaks over the last weeks. But thus far, it appears to be just that small and isolated. And bear in mind that many were expecting the demise of the Chinese soybean imports last year during the height of the outbreak. And China actually imported slightly more soybeans last year than they did in 18. So likely they sought to out to maximize output across all their livestock classes. With that, we will wrap up this Q and A session. I hope you take away a few key points. Our business is operating well despite COVID 19. We're delivering excellent operating performance, and we remain optimistic for the remainder of 2020. Thanks for listening. Be safe and stay healthy.