Investor Update

Dec 10, 2020

Slides

Good morning, everyone, and thank you for joining us today at the third of our four company hosted presentations. Each of these chapters was created to provide you with better insight into our strategy and operational focus areas. Before we begin, please read the safe harbor and familiarize yourself with our conference capabilities, especially the Q and A box on your screen. You may enter questions at any time, and we will address them at the end of the presentation. For those of you that follow Mosaic or have joined us for any of our previous strategic chapter meetings, what you see on your screen should look very familiar by now, which is exactly the way it should be. It means that we've been clear and consistent about who we are and what our plans are for the future. In short, Mosaic is a mission and a strategy driven organization. The efforts of our 13,000 global employees are aligned, focused and driven towards creating long term value for all of our stakeholders. The efforts of our 13,000 global employees are aligned, focused and driven towards creating long term value for all of our stakeholders. As a result, what you've seen us deliver in these positive measurable and real impact of these efforts. Despite a global pandemic in fertilizer prices that are still recovering, we have performed exceptionally well this year. And now we are well prepared to build on this success as we head into 2021, which is shaping up to be a very positive and promising year ahead. Today, we are shifting from our previous chapters that were focused on operations to review two critical strategic priorities that will help shape and define our future. The first is act responsibly and then the second, grow and strengthen our product portfolio. But before we begin, I'd like to move off topic for a moment and provide you with an update on our countervailing duty petition. On November 24, the U. S. Department of Commerce announced a preliminary ruling that estimated subsidy rates for Moroccan producer OCP as well as Russian producers, Osagro and Eurocam as well as others. Commerce's final determination on duty rates are expected around 02/08/2021. A parallel vote by the U. S. International Trade Commission regarding harm to The U. S. Phosphate industry is expected around March 11, followed by a written determination around March 25. Given the DOC decision, I'd like to address recent dynamics as we've seen them in the market. As we've said multiple times in the past, our petition will not impact global supply and demand, but rather it will impact trade flows. And this is exactly what we've seen. Moroccan and Russian shipments have shifted from The U. S. To India and Brazil. And in their absence, The U. S. Market has begun receiving tons from nontraditional sources. The market is adjusted, and we're seeing an improvement in U. S. Market conditions as Moroccan and U. S. Tons have shifted elsewhere. On the demand side here in The U. S, as the date for the preliminary ruling approach, our commercial teams observed cautious buying as customers were forced to balance addressing diminishing inventory channels with the possibility of a resurgence in product from Russia and Morocco. Since the ruling, customer requests have ramped up and NOLA DAP spot prices have risen about $30 to $385 per tonne or even a bit higher. So as we approach the next planting season, we want to reiterate several favorable factors. While the trade case is still ongoing, U. S. Pricing has so far benefited from the shift of Moroccan and Russian product to other markets. U. S. Inventories remain depleted ahead of a strong anticipated spring season. U. S. Farm income is at a seven year high, which maintains grower affordability despite recent price increases. And we continue to expect imports from nontraditional suppliers to find their way to The U. S, which should reduce the current NOLA premium. However, we strongly believe overall global demand, combined with tight supply points, all point to a very favorable '1 for our phosphate business. With that, let's get back to our topics today. I'd like to pass the meeting over to the first of our two presenters today, Ben Pratt, Senior Vice President, Government Affairs and Public Relations. Following Ben will be Walter Precourt, our Senior Vice President of Strategy and Growth. Ben, over to you. Thank you, Joc, and good morning, everybody. At the most basic sense, I'm going to talk about acting responsibly today. And in the most basic sense, acting is about our license to operate. We have to be a good corporate citizen everywhere we operate if we want to continue to operate. That's table stakes. But as sustainability has evolved and we move closer to standardized reporting across industries and across the economy, it also serves as a useful indicator of what we deem material, of what we deem to be our most significant risks. And importantly, I think it serves as a good proxy for our nonfinancial management effectiveness. At Mosaic, we've been leading the industry for a long time. We've been taking stands. We've been making and living up to commitments. I'll spend some time today talking about our new ESG performance approach targets, but first, just a quick view of our philosophy on this all this work. We don't think of this as an academic exercise. It's not we're not doing this to appease the cottage industry of sustainability. We do understand our place in the broader world, but our focus is on driving better Mosaic performance by measuring what matters and then driving it back to our businesses so that we can improve and then reporting it openly and honestly to the rest of the world. We're not new to this. We have a well established history of being accountable and transparent to our many constituents. Our first sustainability report eleven years ago was the first in our industry. And then in 2012, we were the first to make significant environmental commitments. Those were commitments to stewardship that were not quantified. And then five years ago, we had our first quantified performance targets, 10% reductions in our targets were 10% reductions in water and energy use and a 10% reduction in greenhouse gas emissions per unit of production. Another step along our journey in 2018, we aligned to the United Nations Sustainable Development Goals, which I'll hit on briefly later. And then this year, we made a significant evolution and significant progress with the launch of 13 new quantified five year environmental, social and governance performance targets. On the next slide, you see our targets, and they're available on our website, too, obviously. When we made the Vale Fertilizantes acquisition, it gave us an opportunity to step back and look at how we report all this data and talk about our corporate responsibility. One of the things we learned from that is that we needed to adapt our ESG reporting and our framework as the company grows and changes. And so we regard this document, these 13 targets, as a living thing that we can adapt to the changes in the business. These 13 ESG performance targets address our performance across four key focus areas: people, environment, society and company. And I'll talk about I'll give you some examples of each of those as we go through today. How did we get here to these 13? Well, we went through a very careful companywide analysis. We reached good consensus across departments and geographies. And received good consultation with external stakeholders to ensure that we were aligning to the broader social expectation. All 13 of these targets are pretty closely intertwined. For example, you could wonder how volunteer hours would rise to the list of our 13 important targets. But if you think about that volunteer hours as a proxy for how we motivate employees, how we keep them engaged, how we serve our communities, how we provide environments for people to have a purpose driven career, It tells you a lot about our success of driving employees to be productive. All that said, we haven't lost our strong focus on the environment. We have new 20% per unit of production, greenhouse gas emission, water use targets. Those are aggressive targets. We wanted to set targets that were achievable but not easily achievable, and we think we have done that. And then we have other environmental targets, including reducing fertilizer's impact on the environment, which I'll get back to, and reinforcing our commitment to dam safety, for example, in Brazil. I'll start with the people category. And our priorities there are inclusion, safety, wellness and engagement. You know, obviously, a healthy and happy or well in the current jargon workforce leads to our ability to innovate and to achieve our strategy. We're focused on three pillars of employee wellness. It's financial, physical and psychological. I'll just talk briefly about the psychological element because it's become so much more important in recent years and especially in this year. Some years ago, we started training employees at our Esterhazy mine in Canada to build awareness about what unwell looks like in their peers to break down stigmas around mental illness and to notice signs of stress in their peers. And that's worked really well. We're now extending that training to Brazil and to the rest of North America. At the same time, we are redirecting some of our community dollars to contribute to the psychological well-being of our headquarters community in Tampa. And then during this COVID period, psychological mental well-being is even more important, and we're paying still closer attention on the one hand to the challenges of working at our sites while remaining COVID safe and the stresses that can create, as well as the challenges of working remotely for those of our for our people who work in offices. So we're asking important questions about how people are doing on a regular basis. The environment is simply put on environmental stewardship. Our greatest asset is our employees, and we rely on them to not only be good stewards of the environment, but identify new ways for us to improve. We're focused on greenhouse gas emission reductions in our production facilities and not so much on the end use because the application of phosphate and potash fertilizers, in particular, has minimal GHG impact on farm. And we are on a steady path of reduction. We have been on a steady path of greenhouse gas emission reduction over the past ten years. We're down 12% per unit since 2012. The new 20% target obviously includes Mosaic Fertilizantes in Brazil, and it's aimed at reducing Scope one and Scope two emissions by 20% by 25%. Again, this is not an easy target for us to achieve, especially because we've made such big progress before we set this target on our greenhouse gas emissions. So how have we done that? We make investments in efficiency, and we're optimizing our electricity cogeneration work. And then the important element that I mentioned earlier about employee innovation, we rely on our employees to identify ideas, large and small, across the business to save small and large amounts of energy and thus greenhouse gas emission. I just want to note that this journey isn't ever linear. It's obviously influenced by the denominator, tons produced, and lots of other factors. But the trend line is down, and it will continue to be down. On to society, we have a lot of impacts on society, but I want to talk briefly about our work to lead the industry on nutrient stewardship. A little background for those of you who may not be familiar with the term. When crop nutrients are lost to waterways, they can create water quality problems like algae blooms. We don't sell to the end user in North America where this issue is most important. So it would be easiest easy for us to avoid the issue. But instead, we've decided to lead along with the Fertilizer Institute, our industry association, helping to drive for our nutrient the for our nutrient stewardship framework. That's around educating our customers and their customers on how fertilizer properly and for ours are using fertilizer in the right place, at the right time, in the right amount, using the right source of fertilizer. We engage in a lot of projects around nutrient stewardship, and we bring together large consortiums to do it, retailers, farmers, NGOs, universities and the Fertilizer Institute and other trade organizations, as I said. So we're educating farmers and retailers on best management practices. We're on the ground, on field, teaching farmers how to manage water on the edge of field to keep the water on their field and out of water sources. We've engaged in very targeted on ground projects in this regard with NGO help and usually to demonstrate the effectiveness of good nutrient stewardship, and that's working. We are showing that we can drive water quality improvements with good edge of field practice. Our ESG target in this regard is to get to 25,000,000 acres under 4R management in North America and the dark blue provinces and states that you see highlighted in the map by 2025. That's a bold goal to move from 5,000,000 to 25,000,000 in five years, but we think we have the momentum and the projects to get us there. We're doing this because it does work. And we have evidence that for ours, good management on field has kept about 5,000,000 tons of phosphorus in fields and out of the water in the Western Lake Erie Basin, example, since 2014. The company front, governance, which is oversight and accountability, which is essentially transparency, are foundations for an effective ESG practice. We have that. We have buy in at all levels of the organization, down to our operators and our mines, to our general managers at our facilities, to our team, the leadership team. And then most important, to our Board. Our Board is very engaged in ESG work. The Board receives regular updates on our whole program, and then they do deep dives into specific elements, both as a whole Board and in our Environmental Health, Safety and Sustainability Committee. And then on the reporting side, we are we've been reporting leaders industry for a long time. We have always adhered to the most current global reporting initiative format, the GRI. And this work, sustainability reporting, is still changing quickly and still evolving quickly. It's still a relatively young science. And so we are constantly monitoring the ever changing landscape there, ratings and surveys and responding to those that we think will add value. But most important, again, we use this data to drive our performance more than it's more important that we drive performance than that we respond to surveys and rating systems. A couple of examples about how we deliver both ESG and economic value at the same time. And ESG value is considered in all our CapEx decisions. A great example of driving ESG and economic value is our new K3 minutee at Esterhazy in Canada. Obviously, the mine will drive lower mining costs and will eliminate our brine management spending, and it will be an extremely efficient mine. But it also has ESG benefits. Canadian potash's global GHG emissions profile is already well ahead of the rest of the world. K3, we think, will take that a step further through automation, efficiency and lack of energy spent pumping brine. All that will have additional greenhouse gas emission and cost benefits for Mosaic in the province. Another important example of ESG and economic value intersecting is our electricity cogeneration projects. We've made significant investments over many years now to capture waste heat and turn it into electricity. In 2019 alone, we generated 1,500,000 megawatt hours of electricity from our own waste heat, allowing us to avoid 900,000 tons of CO2 equivalent emissions and to reduce electricity costs by $75,000,000 in addition to sending some electricity back to the grid. Our projects now are focused on further optimizing the existing cogen facilities we have, both here in North America and in Mosaic Fertilizantes in Brazil. Finally, on the society front, we have a responsibility to contribute to our communities and society at large. We know that our license to operate is impacted there. But it's more it's about more than license to operate to us. We want to make sure we have healthy communities everywhere we operate so that we have a good future workforce, so that our employees are engaged, and so that we have a vibrant place for people to live and work. And along those lines, before I talk about our broader world impact, I mentioned that we have a pretty significant annual community investment budget. We use it judiciously to make a difference where we need to. We back it up with our time and commitment, not just we don't just put our names on signs and walk away. We work on these projects to make sure our communities get better. But in terms of broader society, we have impacts, we believe, on all 17 of the United Nations Sustainable Development Goals. But we've chosen to align to five, where we think we have the most impact. Obviously, in zero Hunger, where fertilizer accounts for about half of all crop yields, we have a big impact on global food security. Clean water and sanitation goes to the heart of the nutrient stewardship strategy I discussed in our efforts to improve and protect water quality. Decent work and economic growth is obviously, safety and risk reduction are critical to us. But still is meaningful employment, and we're a big economic contributor in all the areas where we have facilities, not just direct employment, but indirect employment through our supply chains and other sources. Climate action, I talked about our greenhouse gas emission target. We're committed to reducing our impact there. And then life underwater, our work to reduce nutrient runoff impacts underwater as well. So to conclude, I just want to say that our ESG approach is focused first internally. We want to make Mosaic perform better, and we want to drive that performance through good data. Second, it's about ensuring our license to operate. And then third, our it's we understand our place in the world and our contribute and our contributions to society writ large. With that, I will conclude and pass the presentation over to Walt Precourt, our Senior Vice President of Strategy and Growth. Walt? Thank you, Ben. Growing and strengthening our product portfolio is not new to Mosaic, but we have increased the emphasis on expanding the types of products in our portfolio and accelerated the speed with which we identify, develop and launch new products. Mosaic's current performance portfolio continues to grow steadily in sales volumes, delivering value and improved yields on the farm and margins to both us and our customers. As we shared in August, we've set a bold target to increase performance product sales volumes to 5,200,000 acres in 2023. This product suite includes Micro Essentials, Aspire, KMAG and our recently launched Sisterra product. As part of our strategy, we continue to evaluate new and enhanced products. In addition to building out our pipeline with internally supported work, we have recently signed agreements with innovative companies for licensing and co development of the next generation of crop nutrition products. This approach helps us to accelerate new product introduction and has off ramps to reduce risk as we expand our product portfolio to include new soil health products. As shared at our last Investor Day, we believe that Mosaic's access to global markets and insights from farmer needs creates a unique opportunity for us to complement our core phosphate and potash portfolio with value creating opportunities in the six areas identified on this chart. Since that time, we've built a small team to scan ag tech environments and help us find those products and technologies that can create value for our customers. Today, I will take a deeper dive into the area of soil health. So why soil health? Over time, soils can lose productivity, yet there is a need to feed a growing population on the same amount of farmland. We have seen significant improvements in technology to more efficiently deliver crop nutrition, enhancing yields and providing strong returns to farmers using biological tools. In addition, macro social concerns, including climate change, water use, and protecting the broader environment are driving our customers to think differently about what they apply to the land. Soil is a farm asset just like equipment, and maintenance is required to ensure maximum productivity. Survey suggests that farmers are adopting biological products at a rapid rate. In addition to the twenty three percent of farmers that use them today, 19% more intend to use biologicals in the future. To us, focusing on soil health, particularly bio fertilizers and biostimulants is a natural extension of our existing platform and a winning proposition for our customers, ourselves and our communities, particularly given their alignment with the four R agronomic principles that Ben touched on earlier. Like any emerging area, there are lots of definitions to describe what's in and what's out, and it can be difficult to draw lines. We generally view the crop nutrition segment of biologicals in two primary categories, biofertilizers and biostimulants. Biofertilizers are sometimes referred to as nutrient use enhancers or nutrient uptake enhancers. They typically focus on improving the delivery of nitrogen, phosphate and potassium to crops. This market is expected to grow to $3,300,000,000 by 2025 and is 50% concentrated in our key geographies in The Americas. Likewise, the market for biostimulant products, which stimulate natural soil microbes at a new level, is expected to grow to $3,000,000,000 by 2025, again with strong market share in The Americas. Market studies suggest that these products are growing at a greater than 10% compound annual growth rate and that they are expected to deliver higher margins. One key point to highlight is that these products are designed to work with nitrogen, phosphate and potash fertilization, positioning Mosaic to capture value both on traditional and biofertilizer products applied to each acre. This is a fast changing area and we've learned a great deal by cultivating relationships up and down the value chain. This includes things like leveraging the knowledge of our business partners in farming and ag retail, understand the problems that they are trying to solve, working with leading ag tech programs at universities across the globe to better understand the potential of emerging technologies, becoming involved in ag focused venture capital, acting on great employee ideas and participating in a number of ag tech networks. We are building knowledge in the space, standing in traffic, if you will, to discover opportunities to create meaningful returns. When things stand out, we thoroughly evaluate the ability to move from product concept to the farm. We assess potential partners' pipelines, intellectual property and core competencies, using our research partnerships and our in house agronomy teams to support us. Then working with our commercial teams, we seek to understand the potential market and expected returns. Ultimately, this leads to deals that include things like joint development agreements and market rights in key geographies for key products. To bring innovation to market quickly and efficiently, we are making a series of small investments. From a financial perspective, current deal activity is on the order of magnitude of about $10,000,000 a year or less annually for the next three to five years, with the ability to quickly shut things down and pivot if we are not seeing the results we need. We believe this is a capital efficient way to execute R and D. We have two of these relationships to share more details on today. Our relationship with Inuvia hits on multiple aspects of ESG. The collaboration brought new life to the Plant City facility, which have been idled. This, in turn, created construction and permanent jobs, benefiting the local community. And it has allowed Mosaic to acquire distribution rights to a novel product that in and of itself is a great ESG story. We have also just announced an agreement with another outstanding innovative company, BioConsortium. With them, we'll collaborate on R and D activities for the production of novel nitrogen fixing microbial products to market in The Americas. This will allow Mosaic to capture nitrogen value at the farm without investing in traditional production infrastructure. And we believe it's important to have a full suite of nutrient use enhancers to best serve our customers. And this deal was the first step in that journey. Stay tuned. We have more deals in the pipeline that are included in the investment profile I described earlier. We look forward to sharing more soon. In closing, providing sustainable balanced crop nutrition is what we do. We believe that growing our product portfolio with the addition of complementary products like Cisterra and biologicals is a great way to help both our customers and ourselves be more profitable. We also believe that these new products benefit from our existing market access and the products could help open up new channels to us. The fertilizer market is prime for disruption. We want to lead in those efforts. We definitely understand the challenges of successfully introducing new nutrition products, and we are positioning ourselves to invest wisely for Mosaic, our shareholders and our customers. And now back to you, John. Thank you, Walt and Ben. I hope you walk away from today's session with two clear messages. First, our focus on being a responsible and safe organization permeates everything we do. Mosaic takes these issues seriously, and they have been part of our DNA for a very long time. Our ESG targets build on Mosaic's leadership position in this area. And when taken as a whole, we view good ESG performance as a useful indicator of overall management effectiveness. Second, we are taking bold steps that complement our market leading positions in phosphates and potash. We are very excited about the opportunity ahead to expand our product portfolio in new ways, and we believe that these will add tremendous value both to the grower and to our shareholders. Now before we open up for questions, I'd like to remind you that the final chapter in our series is scheduled for March 11, where Quinn Freeland, our CFO, will address our optimized operating assets and capital management priorities. Now over to you, Paul. Thanks, Joc, Ben, Walt. As Joc said at the beginning, please enter questions in the Q and A box, and we will try to get to as many questions as we can over the rest of the hour. Just a minute and we'll compile some questions here. Joc, our first question comes from Vincent Andrews at Morgan Stanley. He asks, in order to meet your GHG emission reduction target, do you need to make any meaningful CapEx investments? Yes. Thank you, Vincent. Obviously, when we invest in things and one of the great examples was cogeneration, we believe that as we make overall investments, if we take into account the greenhouse gas impact, first of all, that will help drive that. And that's our example of Esterhazy. Our example of our New Wales generator that we put in a few years back is another great example where it has an economic payback, but it also has a great greenhouse gas payback. So yes, there's obviously going to be places, Vincent, where we're going to need to make reasonable investments. But at the same time, a big chunk of this is looking at ways in which many, many ideas coming up from the floor and coming up from our employees are allowing us to make some real strides in emissions. Ben, do you have anything to add to that? I think that was pretty much how we calculated it out. So not significant capital investment. That's probably the way to say it. Yes. I would just say no stand alone capital investments that don't have an economic return. But as you said, all of our CapEx decisions do have an element of GHD involved. Yes. Joc, our next question comes from Andrew Wong at RBC. He asks, fertilizer use helps increase yields, which reduces arable land use and helps limit food price increases. How can that benefit provided by Mosaic's business get captured in the measured and reported ESG metrics? Yes, Andrew, great question. I guess these are what we call we call those Phase three or Class three impacts. And they're pretty hard as you can guess, they're pretty hard to measure directly. This is why when we look at the 4R getting to 25,000,000 acres, we think those things are actually having a great impact. The question is how do you quantify them. Ben, have you I know we've tried. Have we made any real progress on how we might do that? We're making progress, Jack. I don't think we're ready to talk about specific measurements. But to the other point about agricultural intensification, has significant benefit long term saving forest lands and reducing the need for additional crop land. Joc, following up on that, we actually did receive a few questions on the 4R program. Vincent Andrews from Morgan Stanley asks, can you provide some more color on the actual process of getting acres validated under the program? And then how do you make sure and monitor that those acres continue to operate within the framework? And then a second part of that question comes from Adam Samuelson from Goldman asking if there's a cost increase that there's a cost to increase acres under the 4R program to $25,000,000 by 2025? Yes. Thanks, Adam and Vincent. Look, let me address the last part first. We believe that using 4Rs, which is putting the right amount of fertilizer in the right place at the right time and the right application rate, will actually reduce the cost of fertilization. So we don't believe it's a cost burden if done correctly. In terms of verification, there is a verification process, which I'm going let Ben talk about. And obviously, the we have to keep looking at it each year and over the years to make sure it continues. The one challenge with 4R, I think, though, too, is the proprietary application philosophies that some of the retailers have. And while it follows the basic philosophy, they like to brand that as their own kind of agronomic approach. Ben, a little bit on that and the verification? Yes. I would you're right, Jack. It's a pretty robust certification program that farms have to go through to have their acres counted, and then they do have to be recertified on an annual basis with a slightly less onerous measurement process. And on the economic front, I would just add that while there's a very there's often some small upfront costs to capture water and keep it from leaving fields, it does have an economic benefit downstream by keeping the fertilizer local and having and reaping all the value from your fertilizer rather than losing We, as a company, believe that the more efficiently we can use fertilizers, in the case of ours manufactured fertilizers, and while that might hurt our sales or whatever, we do believe that, that is the best way to minimize the impact of farming on the environment. But it also is the best way to intensify and get the best yields from the farm. Joc, another follow-up on the 4R program. Steve Byrne from Bank of America, he asks, does the 4R program suggest that even fall applications should be avoided? And then a second unrelated question is or somewhat related question is, with respect to Lake Erie, where the algal blooms this year on the Western Shore? And is the primary driver N or P leaching into the water? Sorry, Paul, could you repeat that last piece about the Lake Erie? Did you say the is the phosphate or nitrogen the main contributor? Was that what you asked? That's the question. He's asking if it was nitrogen or phosphate that was the contributor to the algal blooms to the extent that they occurred. Okay. Well, let me address the 4R and fall application. I mean, in all of these things, The U. S. Has used fall applications for a long time and it's been very effective. And I think if safeguarded properly and put on it, again, the right times in the fall, I think fertilizer can be used very responsibly in the fall, and I don't think that should be a problem. The trick is how do you get it to get into the soil and not run off. And that's where the challenge becomes. In terms of the Lake Erie bloom, I mean, the Lake Erie bloom is obviously extremely complicated. You have municipal impacts, you have farm impacts, I. E, the impacts of manure and all of that. You have organics and other things that run into that thing. And then, of course, you have manufactured fertilizers. And of the manufactured fertilizers, I think, in general, nitrogen is a bigger contributor than phosphate, but that doesn't eliminate the idea that phosphate itself, whether it comes from manufactured fertilizer or organics, is going to impact it's a fertilizer. It's going to impact the ability of the algal bloom to grow. Algae, like any other plant, requires fertilizers and feeding it. And so where it gets that fertilizer and it probably uses both nitrogen and phosphates, and those contribute to that growth. Ben, anything on the 4R and On fall application, the this is one of the critical elements of the FAR program, the right time. We don't think a blanket prohibition on fall application makes sense. It probably does make sense to regulate application on frozen ground where you'll lose a lot of nutrients, but that's about educating people on right time to apply the fertilizer. And like you're I think you covered it, John. Okay. Jon, we've gotten quite a few questions on our growth portfolio. So I'll just jump into those now. The first one comes from Ben Isaacson at Scotia. He asks, how should we measure progress of your Performance Products portfolio, particularly in biofertilizers and biostimulants? Additional questions related to that is, are we targeting $1 EBITDA pickup? Should we be looking for margin expansion or market share? And finally, what is the investment that we're prepared to make and the type of IRR return on capital that we're looking for? Okay. That's a pretty multi question there, Ben. But let me talk about this from a different perspective first, and then I'm going to hand it over to Walt. But you can really think of this as an extension of our R and D. So no different than the R and D that led to the MicroEssentials products or the R and D that ultimately led to Aspire or Cisterra or now these other products. We've had a long history of looking at products, thinking about problems for the farmer and saying, can we take those and turn them into an economic product that we can take to market? And we think in that, we have great market access to North America, Brazil, India, China through our own distribution and market channels. And so we think we have a competitive advantage doing that globally. And then so we're saying, well, what fits into that? And I know this is an indirect way to say it, but at this stage, we're saying, what are the investments that we make that have a reasonable chance of success over time? And then it's way, way too early on some of them. We have a product pipeline of mature products like K Mag, MicroEssentials. We have rapid growth, early stage products like Aspire. We have new products like Sisterra. And then we have what I would call basically pipeline products like Anubia sorry, the bioconsortium products, etcetera. Those were way too early to say either how much they're going to give us or if they're even commercializable. But we believe there's a good chance they'll be commercializable. If they are commercializable, history has been these are high margin products sold in low volumes, but very high margins. And they could be very disruptive to existing fertilizers, and we think we should be part of that. In terms of overall investment, we've invested probably well, definitely hundreds of millions of dollars in micro essentials over time, but only when we knew that we could get a superior return for those investments. And I don't see why any of these would be any different in terms of our investment philosophy, which is we're focused on superior return on capital. So we're only going to invest if we believe we can get that. Joc, I think that summarizes it well. The Sisterra product, we just view as a performance product like our other performance products. We've shown a history of being able to grow those. Aspire is our newest product in the portfolio. Typically, a new product starts out in the 50,000 to 100,000 ton a year range, and we've got a history of growing these things by 15% a year. More than that, I really can't doubt at this point. Good. Thanks, Walt. Just a follow-up on that, I mean, a question from John Roberts, he's asking if there are any hurdles to meeting our twenty twenty three targets for our performance products? Hurdles. Well, again, I liken this back to when we were talking about the some of the earlier questions on expansions and other capital. We're building these with on ramps and off ramps. And the like anything, we want to fail fast if they're not good and take them forward if they are good. And right now, you're investing in numerous for a product pipeline, expecting that maybe 20%, 30% of those will go to commercialization and a couple of them will be basically home runs like something like a MicroEssentials or Inspire, but really early days for that in terms of that. And I got to go back to Ben's question, how do you measure this? I think you measure this in when you start seeing new products come to market. Jacques, we've gotten quite a few questions on CBD and implications of that as well as trade flows. The first in this area comes from Adam Samuelson at Goldman Sachs. And he asks, given the shifts in U. S. MAP and DAP premiums, how is Mosaic thinking about the right balance of export versus domestic sales going forward? Is it materially different than the mix that we've seen over the past three years? Yes. Okay. Thanks, Adam. Think, Jenny, I'd like you to weigh in on this. But let me summarize by saying what we've kind of said earlier, which is over time, we expect the trade flows will reset themselves and we're seeing Jordanian, Egyptian, Australian, Mexican products start coming to The U. S. And over time, we expect that the premium into NOL, I want to call it premium, will balance off and it will basically be free fair trade based on the freight requirements. And so each of the players will look at what the freight differential is to their different markets and the price, and they'll balance those off. And OCP and plus agro, euro chem tonnes will probably go to other places and displace them. So in terms of that, what are we going to do? Certainly, short term, we have refocused on The U. S. Market because we want to make sure that our customers are kept whole and that our customers don't suffer from this. Our goal is not to short The U. S. Market. Our goal is to have The U. S. Market be well supplied and at good, fair prices. In that, we're aggressively trying to reload The U. S. Market to make that happen. But over the long term, we expect that we may redirect some of our product here. But overall, we still have a lot of commitments to other markets like Brazil, India, etcetera, and we fully intend to respect those customers as well. So it's not really a big market share gain that we're trying to build here in The U. S. We're just looking for fair trade. Jenny, any talk about us redirecting long term, short term? Yes. Jack, I think you covered well. I guess I just want to add one comment. We do have our customers outside of The U. S. That we've been serving and we have a relationship. We will continue to supply our customers there. The flexibility as Mozek that we have is our own distribution businesses in Brazil and India and China, where we have more flexibilities supporting the trade flow. So basically shorting the supply from our production in North America and also in our venture in Saudi. And we are basically purchasing product for our own distribution businesses. So that's the adjustment that we have been managing. Just to Great add on that, point. Thanks, Jenny. A follow-up, Chuck, from Artem Organikov at VTB Capital. He's asking really sort of about some of the dynamics in pricing. Do we expect U. S. Prices to decline and meet where global prices are at? Or do we expect global pricing to rise to the parity to where U. S. Prices are to close the parity gap? Yes. Look, today, I think based on what we saw when the announcement was made, the world is tight. The whole world is tight. What we would have expected in a more loose market, if you will, would be that as the Russian and Moroccan tons went to other markets, it would have a downward pressure on those. And what we've seen is exactly the opposite. We've seen the whole global market move up. So where will it go? My belief is the parity will be found by increasing international prices rather than a decline necessarily of U. S. Prices. What we're seeing in other markets is they're accelerating as well, which says there is not a lot of extra phosphate to go around. Jenny, any thoughts on that? I think you covered well, Joc. The global price are basically decided by the fundamental, which supply is tight, driven by very strong demand and also the reduction of the supply side, specifically the export reduction out of China. That has really driven the tightness of the phosphate market. Therefore, Jack, you're totally right. We should expect to see the global price to go up. Joc, going back to some of the discussion on the growth portfolio, Seth Goldstein from Morningstar, he asks longer term, how do you think about the trade off between increased bio fertilizer profits and lower demand for P and K that results from that increased biofertilizer use? Yes. Well, I mean, we don't think that look, there's a basic stoichiometric need for potassium, phosphate and nitrogen, sulfur and others in plant bodies. So you're never going to eliminate the need or whatever for all you can do is increase the efficiency or in the case of nitrogen, I guess, fix it from the air. But in terms of phosphate and potash, to date, there's been no way to release those from the soil. All you're doing is creating an environment, a soil health environment that allows those to be used more efficiently. So from my perspective, it means that each time you sell gets used more effectively. And if that means a 10% better utilization of the phosphate or potash, that means that the plant will grow a higher volume in the same acreage and the intensification means that the sales don't go down, but the output does go up. And I think that's what we've seen in The U. S. Over time, and I think that's what we'll continue to see, which is higher and higher yields caused by better use and efficiency of farming, including better spacing of plants and everything else that will lead to higher use of fertilizer, not lower. We still got quite a few questions, so we may extend beyond the hour here. We've gotten a few questions as follow ups on our performance product portfolio makeup, and in particular, this one from Andrew Wong at RBC. And he asks, can you just review all of the premium fertilizers offered by Mosaic? We hear a lot about MicroEssentials, but less about the others. What are volumes for all premium products and the additional margin realized by Mosaic from selling them? Okay, Andrew. That's another you're hitting me with some pretty toughies today. Jennie or Walt, I mean, I don't think I could name all of them. There's a number and there's a number of derivations. We do talk about MicroEssentials and Aspire because those are the big volume ones. But I know in Brazil, we've got a number of products that we sell and co products and whatnot, even things like fluoride, which is a co product. But Jenny, can you go through and a few of what we get for them? Globally, we are having four major brands in our performance product portfolio. We talk most of the time about MicroEssentials. And as we have been communicating with all of you that we are saying this product are still growing in all major markets that we are operating, especially the major growth of MicroEssentials are coming from Brazil. And we are still seeing very strong growth in North America and also in other international market. So that is MicroEssentials. We are having we launched Aspire around five years ago, that is a potash based performance product. And the margin level on that one, I would be careful not to give specifics, but we are capture a reasonable premium over the MLP, the commodity product. The premium level for Aspire are really based on the value that's created to the growers. Aspire is in the fast growing stage, since the introduction, again major growth driver are coming from Brazil. Next one, K MAX, Joc mentioned it. This is a very mature product. We've launched this product many years ago. It is basically in a stable stage and we are not projecting any changes of K MAX going forward. Lastly, Walt and Jack mentioned Sastera, we just launched this product a month ago. We foresee this product is going to grow. It's just going to be a very good complement to support the further growth of MicroEssentials as well in addition to the other benefits that we are having Okay. That's good. And then, Walt, do you want to talk about some of the product in the pipeline or should we just actually, Andrew, me summarize it this way. There are a number in the pipeline. There are a number that we are selling small volumes of because of co products or whatever. There's a number we're but when we talk about our 5,200,000 tonne target, we're talking at this stage about those four. And look, when we get into biologics and others, I don't think we'll be talking about tonnage. We'll be talking about dollar because I don't think that it's a completely different scale of product. So and again, pretty hard to talk about the commercialization of them at this stage. Joc, Chris Parkinson from Credit Suisse asks, on the ammonia front, do you have any preliminary thoughts on blue or even green over time directly or making those preference known to your domestic and international ammonia suppliers? Any thoughts even if a much longer concept would be appreciated. Yes. Look, I guess my thoughts on at this stage, the availability of green and blue ammonia is minimal. And if we start looking at the fuel sources and the and whatnot, certainly, I think very soon, you won't see coal and other gasification because of the environmental impacts. But here in The U. S, it's mostly natural gas based ammonia. And the reuse of carbon dioxide to go into enhanced oil extraction, etcetera, is a great thing from our perspective, and we would certainly encourage suppliers to do that. But we're going to have to buy 3,500,000, 4,000,000 no, sorry, 1.5 tonnes, got the number out there wrong, 1.5 or so tonnes of ammonia a year, and there just is not that supply at this stage. So that will get reassessed as the suppliers are able to produce those. But I mean anything that helps the environment and makes the impact of producing ammonia less impact from a climate perspective is probably, from our perspective, a good thing. But the question is what's the premium you're willing to pay for that? Jack, Steve Byrne from Bank of America asks if BioConsortia has gene editing capabilities to amplify the ammonia production from bacteria? Yes. Walt, I'm not sure what their methodology of development is and whether they're doing gene editing or not. Well, the products that we're looking at are non GMO type products. But we would defer to BioConsortium to talk about what they're developing, because there are things out there like CRISPR and other technologies. I just need to be careful because some of the things we know are proprietary and confidential. So I think it'd best to move back to them. Okay. Thanks. Artem of Yannick Kopf from BTV Capital asks what the margin difference is between commodity fertilizers and our performance products? Yes. So thank you. I guess the easiest way to say that is if we look at MicroEssentials over a long term, the margin improvement has been about 40 and we've been reasonably public about that. Now the Aspire product, last I looked at it, sold for about an $80 premium, but recognize that there's the cost of the boron and whatnot and the manufacturing in that. So I'm not sure that the incremental margin is that high, but it does have a higher sales price, but you have to take into account the raw materials. I'm sure it has a slight I mean, we take a margin for that manufacturing and whatnot, but I don't have detailed numbers that I'm willing to go public with at this stage. And then, of course, when you look at the K Mag, it has to compete with its other products. So it really depends on the products. K Mag competes with replacement products. So as a mature one, it has to probably run at a slightly lower incremental margin to the other ones. Joc, we have a question from a shareholder who asks, if we could discuss our views on the Chinese market for this year and next. I assume he is referring to both P and K, but any thoughts we have to share on that? Sure. I'm going to hand this to Jenny, who is by far our Chinese expert here. But I will start by saying, Chinese domestic consumption of both phosphates and potash has been very good this year. There seems to be a real shift towards domestic production and domestic consumption that's helping the world market. And then from the other's perspective of phosphate exports, their environmental measures are really kicking in, and we're starting to see quite a decrease in exports as they focus on their domestic market. Jenny, do you want to talk about the two commodities? Yes. I guess, Jack, I probably just want to start from overall demand, the Chinese demand to the ag commodities, the grains. If you look at the recent grain price increases globally, some publications caught China probably single handed to drive the demand of the ag commodities. So the strong demand to the Ag commodities have also reflected in the domestic demand to the fertilizers, including P and K. So we are saying for potash, we are saying consistent growth of potash demand in China, driven by this very high demand of the ag commodities. Phosphate also after five years decline in terms of the demand and this year we see a very strong rebound in terms of the demand for phosphate. So from demand side, China as a market has been very positive for both P and K. On the supply side, like you mentioned, Joc earlier, phosphate industry has been through some structure changes in China. We've been communicating with the group are saying the environmental protection policies launched by the government five years ago has actually come to some real impact to the industry. We are saying permanent closure of the phosphate production facilities starting from last year and this year has further gone through it. The second major changes on the phosphate industry structure changes are the majors are really shifting away from producing commodity fertilizer to high value added P2O5 products. So this tool structure change on the supply side has directly led to our production of phosphate reduction in China and the coupled with a strong demand domestically, as we have seen a direct impact on export reduction out of China in terms of phosphate. So I guess that's basically a summary to what we see in the Chinese market. You want to talk about Qinghai Lake a little bit, Jenny and the impacts of domestic production of potash? Yes. So the Qinghai Lake reserve of potash has probably come to the plateau in term of the production capacity and also the capability for them to further increase the output. This has been proven since last year. One more comment that I want to add to it is really the emphasize that policy support from the government on forcing the companies to sustainably producing their products. So as part of the policies support, the potash producers, MLP producers in Qinghai and SOP producer in Xinjiang, all of them have taken a measured approach this year. At some point of time last month, they decided to stop production in order to meet the sustainability of production. So that's the other change of the supply side of the potash industry out of China. So all this changes from supply side on both P and K and the very strong demand domestically that has led us to believe this strong market momentum in China in 2020 likely going to be continued in 2021 and onwards. Thank you. Jack, we have another question from Adam Samuelson at Goldman Sachs. He says on Slide 11, Mosaic is targeting to produce about 25,000,000 to 26,000,000 tons of finished product versus roughly 20,000,000 tons in 2019. Which businesses is this volume occurring in? And does it assume a restart of idled potash capacity? Can somebody show me Slide 19? Guess I got our Slide nine. Yes. So sorry, Adam, give me a second to find the slide so I know what I'm exactly I think the probably the gap there is Mosaic Fertilizantes, which if this is product sales, we would sell 8,500,000.0 to 9,000,000 tons from potash, 8,500,000 to 9,500,000 from phosphates and then probably 6,000,000 or 3,000,000 from for Lozante and a few distribution tonnes is probably in there. I'm not sure the exact, but we don't have a big new 6,000,000 tons of production that I'm aware of. How's that? Trying to find the slide. I believe it's Slide 11. Yes. My slides aren't. Anyway, we're happy The to follow-up with breakup of our tonnage will be the tonnage produced by our production business in Brazil plus the tonnage produced in our two production businesses here. And those are our sales. And then, of course, we have about the 6,000,000 tonnes of distribution tonnes in Brazil and another, I guess, total of about 1,000,000 tonnes of distribution in China and between China and India. And those are relatively unchanged. So if the read, Adam, was that we were suddenly making a bunch more tonnes, that was unclear on our part what we were portraying. How's that? We've gone well over the hour, but we'll end on one final question here from Jonas Oxgaard at Bernstein. He asks, the EU is calling for 25% organic farming. Is there a theoretical maximum for organic farming given the need for fertilizer? And is it even possible to create a true organic potash or phosphate fertilizer? Thanks, Jonas. Yes, I mean, first of all, let me say it is possible to create organic potash because the only reason our potash isn't considered organic per se is because we use a coating agent that is oil based. And so you could always go to a vegetable based coating agent. I got to be honest, my philosophical problem with that is it sounds good, but it doesn't really have any environmental impact that is reasonable. In terms of the EU going to organic fertilizer, look, I'm not a disbeliever in organic fertilizer. I believe in fertilizer reuse as much as we can. And really, if you think about organic fertilizer, most of it is fertilizer reuse. I mean, however you get the potassium, the phosphorus and the nitrogen to the plants is great. And the more efficiently you use them is great. I will say though, as I've said before, my challenge with organic fertilizers is you cannot feed 9,000,000,000 people with organic fertilizers. It just is not possible. Organic fertilizer to me is for the in global terms, for the very wealthy who can afford the incremental 30%, 40%, 50% extra cost and for the very, very poor who can't afford to feed themselves. And so when you look at it from a global perspective, we've just talked about China feeding 1.4 or whatever number of people with organic fertilizers is not realistic. Feeding the 1,200,000,000 people in India, organic fertilizers is not realistic. So I look at this and say, it's nice for the EU to say it, but on a global basis, it's probably, a, it's not doable. I don't know where you can find that fertilizer. The only thing you can do by going to those kinds of things is de intensify agriculture, which I think is the absolute wrong thing to do from an environmental perspective. So I have fairly strong beliefs in this because I you look at the challenges the world faces and then you look at the real leading thinkers like Bill Gates, and he goes, this fertilizer is absolutely something needed. And you look at the norm bore logs of the world, and there's probably seven hundred million people that would be in starvation if it wasn't for the green revolution. So I have nothing against organic fertilizers except that they can't. They just can't be the solution for the world population. John, Yes. I think we'll go ahead and end Again, thank you, everyone. We really appreciate your interest. I was very happy to hear all the questions. Great to see how interested you are. The one thing I will remind you is that March 11, we will have Clint Freeland, our CFO, talk to you about our capital management and finances after year end. So thank you for joining us, and we really appreciate your interest in Mosaic.