MOSAIC CO - FORM 8-K - EX-99.1 - PRESENTATION AT CRU PHOSPHATES 2012 INTERNATIONAL CONFERENCE

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8-K - FORM 8-K - MOSAIC CO	d318096d8k.htm

North American Phosphate Outlook

Dr. Michael Rahm

Vice President

Market and Strategic Analysis

CRU Phosphates 2012 Conference

Hotel Mazagan

El-Jadida, Morocco

March 19-21, 2012

Exhibit 99.1

Safe Harbor Statement

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of

1995. Such statements include, but are not limited to, statements about future financial and operating results. Such

statements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to

significant risks and uncertainties.

These risks and uncertainties include but are not limited to the predictability and volatility of, and customer expectations

about, agriculture, fertilizer, raw material, energy and transportation markets that are subject to competitive and other

pressures and economic and credit market conditions; the level of inventories in the distribution channels for crop nutrients;

changes in foreign currency and exchange rates; international trade risks; changes in government policy; changes in

environmental and other governmental regulation, including greenhouse gas regulation, and implementation of the U.S.

Environmental Protection Agency’s numeric water quality standards for the discharge of nutrients into Florida lakes and

streams or possible efforts to reduce the flow of excess nutrients into the Gulf of Mexico; further developments in the lawsuit

involving the federal wetlands permit for the extension of the Company’s South Fort Meade, Florida, mine into Hardee

County, including orders, rulings, injunctions or other actions by the court or actions by the plaintiffs, the Army Corps of

Engineers or others in relation to the lawsuit, or any actions the Company may identify and implement in an effort to mitigate

the effects of the lawsuit; other difficulties or delays in receiving, or increased costs of, necessary governmental permits or

approvals; the effectiveness of our processes for managing our strategic priorities; adverse weather conditions affecting

operations in Central Florida or the Gulf Coast of the United States, including potential hurricanes or excess rainfall; actual

costs of various items differing from management’s current estimates, including, among others, asset retirement,

environmental remediation, reclamation or other environmental regulation, or Canadian resources taxes and royalties;

accidents and other disruptions involving Mosaic’s operations, including brine inflows at its Esterhazy, Saskatchewan potash

mine and other potential mine fires, floods, explosions, seismic events or releases of hazardous or volatile chemicals, as well

as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filed with the Securities and

Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.

Topics

Current Situation and Near Term Outlook

Long Term Outlook

Evolving Role of U.S. Industry

Current Situation and Near Term Outlook

Expected

Features

Positive crop nutrient demand drivers

Record global phosphate shipments but . . .

A slow start followed by a fast finish this year

Lower and less volatile raw materials costs

Several supply and demand uncertainties

Impacted by sentiment and intangibles

Positive crop nutrient demand drivers

Markets still signaling for more area and yield

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

US$ BU

New Crop Corn Prices

Daily Close of the New Crop Option October 1 to June 30

2008

2009

2010

2011

2012

Source: CBOT

7.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00

15.00

16.00

US$ BU

New Crop Soybean Prices

Daily Close of the New Crop Option October 1 to June 30

2008

2009

2010

2011

2012

Source: CBOT

High prices in 2011 did not move the needle

300

350

400

450

500

550

600

650

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11E11/12F12/13F13/14F

Mil Tonnes

World Grain & Oilseed Stocks

Source: USDA and Mosaic

2013/14 Grain and Oilseed Scenario Assumptions

Low

Medium

High

Harvested Area Change

0.00%

0.25%

0.50%

Yield Deviation from Trend *

Largest Negative

0.0%

Largest Positve

Demand Growth

1.75%

2.00%

2.25%

* Largest deviation from the 11-year trend 2000-2010

Trend yields in 2012

and

2013

don’

keep pace with 2%

demand growth!

Potential for a strong supply response

2.40

2.50

2.60

2.70

2.80

2.90

3.00

3.10

780

800

820

840

860

880

900

920

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11

11/12

MT Ha

Mil Ha

World Grain and Oilseed Area and Yields

Harvested Area

Yield

Trend

Source: USDA

2000

2100

2200

2300

2400

2500

2600

2700

2800

2900

3000

00/01

01/02

02/03

03/04

04/05

05/06

06/07

07/08

08/09

09/10

10/11E

11/12F

12/13F

Mil Tonnes

World Grain & Oilseed Production

Historical

2012/13 Range

2012/13 Medium Scenario

Source: USDA and Mosaic

Record harvested area record average yield record

production global demand in 2011/12

Positive drivers underpin record phosphate

shipment forecasts

Source: Fertecon and Mosaic

62-64

64-66

11E

12F

13F

Mil Tonnes

DAP/MAP/MES/TSP

World Processed Phosphate Shipments

North American phosphate shipments and

use have recovered to high levels

3.0

4.5

6.0

7.5

9.0

10.5

12.0

3.0

3.5

4.0

4.5

5.0

5.5

6.0

11E12F

13F

Mil Tons

Product

Mil Tons

NA Phosphate Use and DAP/MAP/MES/TSP Shipments

Phosphate Use

Total Shipments

Source: AAPFCO, TFI, IFA and Mosaic

Fertilizer Year Ending June 30

Strong U.S. shipments last Fall followed by

slow movement this Winter

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Mil Tons

U.S. DAP and MAP/MES Domestic Shipments

2011/12 Fcst

6-Yr Olympic Avg

Source: TFI and Mosaic

MIN MAX Range (2005/06-2010/11)

Average North American shipments expected

this Spring

Source: TFI, USDC and Mosaic

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jul-Dec

Jan

Jun

Mil Tons

Implied North American Phosphate Shipments

Yr Min-Max Range

2011/12

5-Yr Average

U.S. exports have stabilized in the 6-7 million

ton range during the last five years

12F

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Mil Tons

U.S. DAP and MAP/MES Exports

Source: TFI and Mosaic

Fertilizer Year Ending June 30

Low shipments during the FH of 2012 expected

reduce

U.S.

exports

this

fertilizer

year

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jul

Aug

Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

May

Jun

Mil Tons

U.S. DAP and MAP/MES Exports

MIN

MAX

Range

(2005/06-2010/11)

2011/12 Fcst

6-Yr Olympic Avg

Source: TFI and Mosaic

U.S. DAP/MAP/MES production has

remained steady at about 14 million tons

0.0

3.0

6.0

9.0

12.0

15.0

18.0

21.0

12F

Mil Tons

U.S. DAP and MAP/MES Production

Source: TFI and Mosaic

Fertilizer Year Ending June 30

Record shattering U.S. imports in 2010/11

but significantly less expected in 2011/12

0.0

0.2

0.4

0.6

0.8

1.0

1.2

12F

Mil Tons

U.S. DAP and MAP Imports

Source: TFI, USDOC, and Mosaic

Fertilizer Year Ending June 30

North American offshore imports have

declined from record levels in 2010/11

Mosaic 39.5%

Imports

15.0%

Other NA

45.5%

North American Phosphate Shipments

2010/11

Mosaic 48.6%

Imports 4.6%

Other NA

46.8%

North American Phosphate Shipments

2011/12 YTD

U.S. DAP/MAP producer stocks have

increased but remain within recent ranges

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Jul

07/08

Oct

Jan

Apr

Jul

08/09

Oct

Jan

Apr

Jul

09/10

Oct

Jan

Apr

Jul

10/11

Oct

Jan

Apr

Jul

11/12

Oct

Jan

Mil Tons

U.S. DAP and MAP Producer Stocks

Source: TFI

Lower and less volatile raw materials costs

100

200

300

400

500

600

700

$ LT

Sulphur Prices

c&f Tampa

Source: Green Markets

100

150

200

250

$ MT

Phosphate Rock Prices

fob Morocco

Source: Fertilizer Week

Lower and less volatile raw materials costs

Jan 05

Jan 06

Jan 07

Jan 08

Jan 09

Jan 10

Jan 11

Jan 12

$ MM Btu

Henry Hub Natural Gas Price

Daily Closing Price of the Front Month Contract

Source: NYMEX

100

200

300

400

500

600

700

800

900

1000

$ MT

Ammonia Prices

c&f Tampa

Source: Fertecon

Several Uncertainties

Indian demand

Chinese exports

Ma’aden ramp-up

Arab Spring production disruptions

Impact of higher retail prices on Indian demand

Rupees Tonne Unless Noted

2010/11

2011/12 FH

2011/12 SH

2012/13A

2012/13B

2012/13C

(1)

DAP Contract Price c&f India (US$ Tonne)

$500

$612

$677

$525

$565

$600

(2)

Rupee/US$ (Average for Period or Forecast)

45.6

45.3

50.6

49.5

(3)

DAP Contract Price c&f India Duty Unpaid

22,785

27,703

34,262

25,988

27,968

29,700

(4)

DAP Contract Price c&f India Duty/Taxes Paid+Insurance

23,998

29,464

36,425

27,643

29,744

31,583

(5)

Estimated Bogey from Vessel to Retail Shelf

2,400

(6)

Estimated Cost Retail Shelf

26,398

31,864

38,825

30,043

32,144

33,983

(7)

Subsidy (excluding primary and secondary freight subsidy)

16,268

19,763

14,348

18,288

(8)

Implied Retail Price

10,130

12,101

19,062

15,695

17,796

15,695

(9)

Percent Change

19%

88%

-18%

-7%

-18%

The Maximum Retail Price of DAP was unchanged at R9350 from April 2002 to April 2010.

Scenario A - Based on recent bids for spot cargos at $525 tonne c&f India and the approved subsidy level of R14,348 tonne.

Scenario B - Based on Q1 acid price of $960 tonne c&f India, a spot ammonia price of $375 tonne c&f India and the approved subsidy of R14,348 tonne.

Scenario C - Based on spot price plus a risk premium for potential sulphur and ammonia price increases. Solves for subsidy to achieve Scenario A retail price.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

11E

Mil Tonnes

India Processed Phosphate Import Demand

Source: Fertecon, IFA and Mosaic

TSP

MAP

DAP

Chinese exports in 2012

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

11E

Mil Tonnes

China Processed Phosphate Export Supply

TSP

MAP

DAP

Source: Fertecon, IFA, China Customs and Mosaic

Ma’aden ramp-up

0.0

0.5

1.0

1.5

2.0

2.5

3.0

11E

12F

13F

Mil Tonnes

Saudi Arabia DAP Export Supply

Source: Fertecon

Arab Spring production disruptions

0.0

0.5

1.0

1.5

2.0

2.5

11E

12F

Mil Tonnes

Tunisia Processed Phosphate Export Supply

TSP

DAP

Source: Fertecon

Key Factors to Handicap

Agricultural commodity prices

Weather

–

beware

big

supply

response

Political

and

economic

developments

–

impact

energy

prices and the value of the dollar

Speculative positions

The Uncertainties

Indian demand

Chinese exports

Ma’aden ramp-up

Arab Spring

Sentiment and Intangibles

Buyer caution

Price expectations and channel inventories

Marketing strategies of suppliers with new capacity or new

product mix

Long Term Outlook

Expected

Developments

Strong demand growth underpinned by the food

and energy stories

Relatively high commodity prices

Profitable farm economics

Global phosphate demand growth of 2.5%-3.0% per year

DAP/MAP/TSP shipment growth of ~3% per year

Net capacity increases expected to keep pace

with demand growth

Nearly all of the projected demand and capacity

growth outside North America

North American industry projected to remain a

large and stable producer and exporter

The food story by the numbers

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

Mil Tonnes

Source: USDA and Mosaic

World Grain and Oilseed Use

Actual for U.S. Ethanol

Actual

Forecast for U.S. Ethanol

Forecast

Population growth and increases in per capital GDP

are expected to generate steady and predictable

increases in global grain and oilseed (food) demand.

Farmers around the globe will need to harvest record

area and produce yields that exceed the 30-year

trend in order to meet projected demand.

Additional harvested area and higher yields will drive

continued increases in crop nutrient demand.

Connecting

the

Dots

100

120

140

160

180

200

220

Mil Tonnes

World Crop Nutrient Use

Actual -

FSU

Actual -

ROW

Mosaic Model

IFA

Fertecon

Mosaic Survey

1.75

2.00

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

750

775

800

825

850

875

900

925

950

975

MT Ha

Mil Ha

Source: USDA and Mosaic

World Harvested Area and Average Yield

Actual Area

Forecast Area

Actual Yield

Required Yield

1980-10 Yield Trend

2000-10 Yield Trend

Positive long term outlook

World Acid Production

Million Tonnes P

Capacity

Production to Meet Demand

World Phosphate Shipments

Million Tonnes DAP/MAP/MES/TSP

74%

66%

80%

68%

79%

50%

60%

70%

80%

90%

World Acid Operating Rates

The Evolving Role of the U.S. Industry

Expected

Evolution

Lesser role in a growing global market but . . .

Still a large and stable U.S. industry

Focus on maintaining a competitive advantage

Florida

–

large

scale,

low

cost

rock

mining

operations

Louisiana

–

cost

advantaged

sulphur,

ammonia

and

access

to major U.S. agricultural regions

Focus on productivity/efficiency enhancements

Focus on innovative premium products

More limited geographic reach but . . .

Moving further down the value chain

Marketing innovative premium products

Focusing on high productivity agricultural systems

Shipping to freight advantaged regions

The next generation of crop nutrients for the next generation of farming

Rock is our competitive advantage in Florida

Ona

DeSoto

Our Florida operations have more than 45

years of rock reserves

Our Florida chemical plants require

about 11.8 million tonnes of rock per

year when running at 90% of

capacity.

Our current reserves are sufficient

to run our Florida operations for

more than 45 years.

Source: Mosaic 2010/11 10-K.

Phosphate Rock Reserves

Reserve

Average

Percent

Unit: million tonnes

Tonnes

BPL

Active Mines

Four Corners, FL

53.6

65.9

30.2

South Fort Meade, FL

53.8

64.2

29.4

Hookers Prairie, FL

5.7

65.5

30.0

Wingate, FL

36.5

63.5

29.1

Total Active Mines

149.6

64.2

29.4

Future Mines

Ona

245.5

63.5

29.0

DeSoto

148.0

64.8

29.7

Total Future Mining

393.5

64.0

29.3

Total Mining

543.1

64.2

29.4

Innovative Premium Products

MicroEssentials

deliver significant value

Sulphur in elemental and sulphate form as well as

micronutrients ribboned throughout each granule

Yield increases of 3%-7% based on field trials conducted

during the last 10 years

Largest yield boost in the most intensive cropping systems

Rapid adoption of MicroEssentials

Production of 1.3 million tonnes in CY 2011, up from 1.0

million tonnes in 2010

Marketed to strategic customers in both North America and

key offshore geographies

Investing in expected future demand growth

Produced today in two granulation plants at Bartow and

Riverview with annual capacity of ~1.5 million tonnes

Capacity will increase to 2.3 million tonnes in April 2012

with the conversion of our Faustina C train

Projects under evaluation to increase capacity to match

expected demand growth

North American Phosphate Outlook

Dr. Michael Rahm

Vice President

Market and Strategic Analysis

CRU Phosphates 2012 Conference

Hotel Mazagan

El-Jadida, Morocco

March 19-21, 2012

Thank You!

MOSAIC CO - FORM 8-K - EX-99.1 - PRESENTATION AT CRU PHOSPHATES 2012 INTERNATIONAL CONFERENCE - March 20, 2012

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MOSAIC CO Reports