NTR - Earnings call transcript Q2 2022

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Operator

Greetings, and welcome to Nutrien's 2022 Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Investor of VP Holzman, Relations. Jeff sir. Please go ahead,

Jeff Holzman

to Thank XXXX quarter welcome you, Good morning, operator. Nutrien's conference second and call.

contain material As forward-looking we these differ future prospects materially about that conclusions we information. conduct this actual contained call, expectations, various and forecasts. from plans results in those were information. applied assumptions statements Therefore, make forward-looking making Certain could and our in

for recent factors current well Securities comments these we turn questions. about Canadian and report, most quarterly as CEO; Ken to opening to information contained with our call Interim assumptions the annual Additional in Commissions. before and President and as report shareholders our filed your CFO, now information and take annual MD&A Farah, are Pedro over Seitz, I form will U.S. and our

Ken Seitz

you I Good earnings morning and also call. will Nutrien's quarter second to welcome

of get highlight remainder would XXXX, into I the we Before results messages. discussion the for and of key to outlook like our three

to and structural XXXX. we energy, environment Nutrien well fertilizer a provide global support First, markets beyond will for believe changes agriculture

the Second, leverage call. growth feed to plans to detail $X our capital ability invested walk And also on around distribute we meaningful provide in our In returning and expect our accelerating advantages in $X and of of we generate capital this growth later balanced billion Pedro strategic returns a initiatives while to sustainability business, shareholders. to the are capital enhance more will in on invest that integrated a approximately on sustaining that initiatives to approach through and XXXX, shareholders. billion growth and solutions supports growing we help sustainable to excellent allocation our world. are committed business, third, unique capital to

production driven Now turning global outlook, fundamentals, position performance the half to advantaged results delivered the of earnings Nutrien our and of and retail. assets the of first strength by market excellent record our

up American ammonia across important the the growth in had crop very first safety Company, priorities serious up in $XXX occurred and start in in per in Nutrien gas largely sustainability volumes higher fatality large this is was $X.X significantly Solutions in $X.X prior were growth Potash by engagement billion, delivered higher from of first offset from reflecting more prices. Brazilian were North spring. high-value adjusted by growers. do. in half all record In EBITDA was favorable increased more impairment of more year, crop phosphate and the increase window quarter. continued chain had higher we sales very our our than retail year, of year. In and half and and a including Fertilizer our progress realized The to lower geographies mix season Crop phosphate and a injury a reduced were global impacted We nearly previous adjusted EBITDA and proprietary second the in to volumes, to up input procurement most a realized to cash and the season the continue first nutritional shifts second in to XXXX, sulfur our strong the to a controllable ton margins the in supported work markets. condensed reversal by and in fall XXXX, America driven as offset billion and production quarter, our costs and half, strong record environment of that and products rising with fixed application first the offset volumes ammonia which team The increase products. prioritize sales were than higher volumes. increased and prices the supported and higher UAN, We across due to down EBITDA of a a performance sales major of fundamentals nitrogen market increased strong spring offshore realized its of price impacts improved netback combination as had Asia a expanded adjusted margins. Spot excellent Ag North of prices the retail decline and first of in production and volumes American and strength X% $X.X our in were services nearly prior efforts, available products XX% of record the prevention nutrient protection prices to costs. margins the Southeast $XXX non-cash supply and to more compared natural network. to billion Canpotex offshore recognized a compared higher strategic these the in we which the North view The by nitrogen, benchmark fertilizer prices half of than million, half and delayed some volumes adjusted in prices first flat. costs Potash inflation. outside sales particular, the the EBITDA Brazil contributor relatively offering million half to

reopen a global oilseed to Black is Sea shipments. positive if remain a to food deal increase be Global outlook. sustained for security, Ukrainian development there and the historically exports through low. Turning The would grain inventories to recent the

logistical regions in volumes production projected be conditions supply the down season. are believe U.S. favorable. little will continue in strikes in ongoing levels compared growing analysts to to be and dramatically challenged Ukraine's generally for region. to were leaving grain military to other this by any However, constraints issues addition export grain XXXX, labor buffer and

from crop nutritional strong past high Crop the capped we is potash, much a for of products. protection volatility two have grower more upcoming the Belarus more crop significant crop and normal in through temperatures focus planting impacted high and with yields. hot In Europe are shipments potential are July this the but small over over application temperatures due and in to However, Tidewater XX and late, as The Fertilizer in movements forecast reportedly area window summer reduced third first to ensure is special impact on available look of our to of demand core Lithuania. Brazil, and is for but estimated logistically have been yield a which down of to XX-year sanctioned, bulk slow potash planted planning narrowed in has to still were XX% remains positions futures just-in-time XXXX. shipping costly is a and exports strong Russia strong average, season. XX inventories move tons is month Russian that record was expect the option. been market Belarus. rapidly planted quarter restrictions restrictions prices the North maturing to the are to respectively, margins XX%, anticipate broader been inland shipment access supply dress facilitate XX% Shipments next months on products commodity expect at an sanctions commodity but for exports. trading potash volumes million levels supply we not Europe. challenging in Belarus challenges be and million activities on have loss for expected In nitrogen, X% to likely weather, half multiyear by fall. are purchase from on container, X%. financing in increase impacted and is we the to elevated In been XX% Russia to the recent buyers The currently above and and and But on top basis. soybean We constrained Belarus has from product by to America, on grower Eastern by basis. by a XXXX a the via global between

the region, years. new be for XX% see supply five supply, next we Beyond source over of excluding of new which to approximately projected development from the the potash the Nutrien, in existing was this of potash the capacity challenges, delays potential

over to prices exports. further of prices it prices cost allocation availability XX% and and to pricing estimated market is European concerns European given second purchases guidance paid well $X,XXX strengthen delayed an Pedro and through have there MMBtu to I the our the over per ammonia to financial than per close buyers as ammonia gas the equates now Many plans. be expect could by capital by ton of restricted cash turn Europe's over in are will and recent of we gas averaged half to in July to half high Europe. supported then the curtailed, tighten urea supply. production that which and We ammonia resurgence Russian winter in more volatility, review in nitrogen Chinese seasonal gas $XX second as production

Pedro Farah

Ken. Thanks,

to of $X.X of to in now total strong nearly billion a expect first adjusted years. in XXXX, half, shares both we outstanding. guidance, EBITDA strong the billion over in $XX.X five represents represents our the on the weighted and adjusted region of half increase guidance reduction a growth comments and EPS reflecting $XX.X which our increase XXXX, are had $X.X per billion projected threefold the midpoint EBITDA few in EPS compared a a First, the The our range adjusted second share. and to and $XX.X rate the XX% very billion we in average Retail adjusted between earnings guiding and a annual to $XX past

been and volumes will we in EBITDA nutrient season guidance the in Potash margins and In adjusted anticipate second range prices this North half. we historically we have through more in primary stable our most strong anticipate and narrowed ton a three expect application by We demand the potash, offshore achieved below half expect amongst the strong per that nutrients driven continue crop normal levels America record last year. markets. second fall the

midpoint due we guidance. more adjusted of This working in constructive range natural guidance nitrogen change, expect pricing half approximately XX% XXXX. lower $X.X and from higher We a cash we favorable timing low conversion prices. impact a of Our second revised forecast than this in project EBITDA of to result to through change forecast a nitrogen billion cash gas than the American impact XXXX. the requirements; ratio benchmark for is and ratio maintain in our flow previously into outlook assuming domestic of activities our earnings the of our the year operating however, of Despite markets capital operating cash at reflects to North previously this

be allocation in sustained earlier, X/X we mentioned we X/X balanced to and returning projects. a cash repurchases. flow approximately may ensure on slightly pressures inflationary reflects higher on operations, to to approach as inflation in our growth have expanding that he projects a maintain of transitory. dividends We our This X.X capital to support to operating capability. and Reinvesting intend guidance than X.X labor plan we Ken production on and and believe through equipment, and as previous particular, and As allocating well shareholders remaining sustaining safe is reliable share our equipment. in

our the geographies We billion drive capabilities growth initiatives our will expect approximately we network and growth on capital are portfolio. Critical of and accounts to $X.X core high focused in for growing our cycle. our advance strategic nearly the acquisitions investments business allocating that XX% proprietary with earnings across expanding digital through return enhancing products

We total have a for year approximately so XX this Australia, million. Brazil, announced far acquisitions or in $XXX investment completed of last in

the completion Following expect XXXX. acquisitions of by target we surpass recent stated in of million our to announced adjusted of two EBITDA $XXX Brazil,

the other mining Our portfolio hurdle low investment additional by are low-cost to meet is $XXX performing this to underground we to potash, will And a This equipment is million providing ton, what on on ramp exceeding payback flexible, the related to regret XXXX. production market. are for that very tons based production in estimate In cost development unmatched of the that our mine cost capability is be global seeing industry. market majority a XX very a or $XXX support in well, of in period and our to capability production capital of short needed is margins. demand. the acquisitions at projected accelerated Brazilian We per based rate words,

an ammonia ammonia and a announced goals. II project our returns projects. tidewater. advance We upside. prices, we premium our in access to allowed in to in merchant use play believe the and clear, build to mid-cycle provides expansion with our infrastructure key be emissions Louisiana. facility X.X existing will low-cost we end ammonia for on markets volume intention at Nutrien reduction price million come our can relying brownfield the at not and in We And clean a ammonia This additional current attractive ton emerging achieve to that leverage role clean this of Phase Geismar, an participate larger may achieving continue market. nitrogen be development to opportunity or project XXXX a site To May, existing a are This

$X returning $X equates to increased this to capital on our intend back our market which was February. current XXXX, cap, around which we XX% Finally, shareholders in billion in dividend, in by of X.X% of is billion

by Given reduction in to criteria it intent NCIB the common year-end, the our in I'll confidence decision dividends around sustainable as yesterday share $XXX time. to complete to the significant in in factoring lower we now XXXX. in we our Completing XX% we operating shares over on outstanding growing plan target announced our Ken. pass flow, And count and back our to the existing NCIB million cash

Ken Seitz

uniquely top I'm has joined like of world tier business is connection your with to been our feed for just hard I'm members chain, the very respond helping to future. our leadership challenge by team, close Thanks, final extensive deliver our to strong, thank make remain challenge can today sustainably be would production and and apparent. their of Pedro. would I more due and to the to few this feeding we assets. to people for confident Nutrien supply global grower, fundamentals happy and I who Nutrien positioned The through questions. dedication take our would growing our the the efforts of organization we and work safely a never the a across talented our comments.

Operator

Capital Your Markets. session. gentlemen, from first go begin Ladies Please Wong RBC and [Operator Andrew ahead. will of the we comes now question Instructions] question-and-answer

Andrew Wong

move about regarding nitrogen. and the just we is week urea supply like market we're prepared nat mentioned we gas a than nitrogen heard last into the high obviously, constrained just in the situation bit already all midyear in the with up you quickly expected, was things Europe. pretty but So that guidance, also, weaker moved in can And seeing remarks, $XXX very

of So what we're and range. the today? just a upper here lower what the of in And kind maybe being the of are you end your curious conservative bit because assumptions are little guidance seeing just

Ken Seitz

shifts from late start some of Great. Thank strong and to the XXXX. lower true the spring season I full area, mix plant crop had you application yes, application in spring, some led which led a which rates some to for And the course, season fall And it's we carryover to in therefore application prevent season. question, the -- mean, and Andrew. a that

it on seen hand to yes, is the over year. through volatility and how seasonal color provide market. some centered I some rest we -- and So and supply a yet we've will here, constrained just -- that it I'll how volatility Raef to first we've additional

Raef Sully

Yes. we higher you volatility had impacted the Thanks, And much Ken, as thought. was Look, than in results. Andrew. thanks, our the noted, first half that and

continues That season. outstrip strong to last had we delayed mentioned, supply good fall. demand some application forward, Ken had the We global rates increases. remain constraints. to As start the really had production really said, here, fundamentals should've We the looking global

challenges you the which to As eye -- and keep cost high, conversion get on about going pricing can in And Europe. pricing in, starts half. to see nitrate. Chinese -- the shut export reductions I are ammonia remain tons of current capacity in remains to into into is also we're gas natural ammonia mentioned, EU of leading think there, gas that first ammonia the ammonium sorry, place. an XXX,XXX export you There in

million, year. is X.X a That's million Our to be down from for normal million going outlook tons. of lot around quite X million probably X full to levels X the

see excited about the the carbon. low in we're of we addition, growth In potential

a Jeff, we don't half I for and really in want the think you know half, anything? the outlook to add good But volatility I I So beyond. think if see second first despite the

Jason Newton

guess about on I when outlook talking Andrew, benchmark the specifically, prices.

and seen we've even say, you coming in in global -- up ammonia As urea prices of of significant couple North prices with weeks volatility the in and last urea global America.

typical to in the we natural sort of having that's market have look in year. on gas have return conditions, expect that current we if is of case, impact where the to included think as of the prices normally be relative the seasonal said, don't modest. part fourth That half quarter prices tightened and certainly certainly, above the even And the today and we is are market. at in where But a peaked constrained look relatively year. year, in forecast seasonal you they and the the first were if down, a improvement in the of first to we I as production shutting towards increase forecast prices cost marginal Europe at prices the

Operator

go Jacob ahead. Bout comes CIBC. of from next Please question Your

Jacob Bout

My on question is potash demand.

what for down prices summer Brazil versus this rising on the inventory into more to of China is expectation much farmers fill back spring? lower-priced compressed for for XXXX. guiding to How in your program. pushing the a export levels markets slightly then You're expectations is are can a reflection Maybe comment And potash U.S. and bit of a second volumes half like you there? India? given the the Or the higher

Ken Seitz

thank Well, question. we're the inventories to about we'll the and maybe unfold is do relates sort how of Yes, the go just seeing we're world, here. you, [indiscernible] Great. expecting for as that it Jacob, what around

yes, just spring lower as to which some season application mentioned, crop XXXX. prevent and fall shift we So in had, compressed that that rates. led strong area, And in is again, it then application clients true, makes, some the

on is So potash had volumes coming that North true some in spring, out America. it of we carryover the

that Nutrien -- down down therefore, so And in volumes some region.

closing up field But and order American those filling moment. the at program summer are don't just we our our volumes. book we QX North Now expect

fundamentals to ag a But recovery volumes when the That North with it's time, is we backdrop say we those the XX a XX and season application America. and of North of down the believe same said, fall world. tons, strong expect in of million at strong lay a again, the America. world parts don't expect in incentivized with We maximize still to And the in of level crop growers backdrop million all yield it's supply-constrained nutrients. agronomic fundamentals, we the appropriate

that didn't As in up in things after you first of the impacting imports it's Brazil, first were world related of the -- February. until, really part say, obviously, Ukraine in and conflict all, to the half, start for

planting in shipments those into also season, year-over-year, they we're port those And that moving So have and the port -- know XX% were for land -- up and as season. XX% we high only seeing inventories inventories port their at with will inventories are Brazil they coverage we know moving XX% in and their that about land. be planting moment, still for prepare

X.X the inventories we know for down. in inventories are first planting the imports that that back we be XX% Their year-over-year tons. down the go big in their we If sort China, we were of So know market Brazilians half, million put will buying to season. at port and significantly

pricing then the the oil migrated first And I'd are XXX,XXX, for country not shipments that So India, strong prices And on market last and are inventories say that finally, those not and just that And where those five-year that. for is getting down the getting same fact port to or up. half about related as lows seen it's true half volumes in in the which, They're low, tons. first very, world, Asia, is to the volume really again, very We've again, Southeast just it in the the in prices. China given year. compared inventories, the priced XXX,XXX needs. lowest XX%

product And what convergence granular for of so selling to for Brazil. similar bit price we saw standard a in we're actually

will The lay to for say, backdrop of at one year we the will compelled a strong to like but Southeast Yet down supply purchasing fully growers of words, Asia have again, price but last places thing delayed be believe inventory I'll just either expect a nutrients, another strong to North due they are albeit supply-constrained this is demand, is we due or crop Jacob, things purchasing. seeing that it that market. Brazil don't that moment. those that So like the sort last-minute of they'll inventory just to the see America, with just just-in-time we levels was constraints. volume important get spring, We be ag these we the know fundamentals, waiting need

Operator

comes Please question Joel from BMO next Your Capital go ahead. of Markets. Jackson

Joel Jackson

the at on in we've looks you potash. a expecting some talk from quarter like, perspective where pricing the I India competitors seen about a expect to which around China, play and some and into play look with third things. you Staying in for other [indiscernible] as decrease realized midstream going the pricing price other think quarter what book is you on the in out in do prices third fourth If What quarter spot your

Ken Seitz

among little question. nitrogen, and stable of thank been bit Yes, would is Yes, crop more potash for the to certainly what say pricing. you I nutrients, in a terms compared has

wide fruits some place slight again the into Hemisphere a all in we're heading a things. we're and seasonal expect have we be open Brazil, seen in fall just some And and here like softening We a season. [indiscernible] Northern to where application these softening, season season, the window which this

the it markets, China XXXX, to these like with we spot around I and around stability mean, forecasting all remain saying as levels in balance inventories of the for at for I looking later of we're at very that a for negotiate in that's the but we're -- rather and forecasting not and sort probably be be will in will these balance in and moment could into the in-country for there that those compelled some contract QX, sooner the QX of prices markets pricing the than and of sort there's said, necessarily India XXXX. low into these true So that's year. levels and head possible

Operator

of from go comes ahead. America. of Please Steve question next Bank Your Byrne

Steve Byrne

that and Clearly, in you maybe for fall aggressively of your purchasing on in buying side Is like your in comment -- next in of the wholesale was retail up there Yes. the business buying loading fall. agreement well has year? crop to pricing capture your because retail of business of chems, in margin that your the made pretty side margin business, of half year. and up side and the of this It is next business run retail this the similar what in level spring. fertilizer about interested and the clearly and I'm nitrogen this for of bold on captured on first was some advance the the a clearly year seems earlier of captured crop inflationary crop that chemicals, potash

Ken Seitz

Right. procuring reflected first been Well, thank in question. group you, in business. our strategically environment. the results our for yes, successful And rising our Steve, price this retail has retail say, And as in you half

Now on open Tarsi procuring see of some an I'll as true But at we XXXX heading second in well. that first last some window for the crop as into say, half -- time, to that. off it nutrient what in is strategically on provide he what the perhaps you success business the is prices. season. the But that's fall crop half, year, see secured we color It's -- same we very moderation of more given a part that also chemistry they of hand for Jeff application see some leveling retail the to of and has fall over just

to you. over Jeff, So

Jeff Tarsi

maturity of seen the into categories. the developments and one and have seeing move Maybe to yes, we've quite with spring, got month, really is two nicely, dates this we'll where had progressing to -- late we're -- the weather going And up I'll with start a this fall But a Steve. really that start the fertilizer fears the tight I we're take we last it bit. over window really with for crop application fall. purchasing

this window I'm more year. for a when I anticipated fall than So this got crop we much had lot have open encouraged planning more application could that we for

to know, we're now. starting strong anticipation extremely fall. are high you our think of the land significant fill so cash -- the a don't their good sheds And remain start are we to. hedge prices they and that very one, that to are want what to get nutrient be sheets As applications. We to of can growers yield and think in adapted year help right more real now really And number balance it. put in growers them nutrients the want margins spring puts throughout going or to of on layering a move we product volume And always again we're now to if are these most it off out

fall, today, And of have to So good to corn on to are, going as see we're some put going I relates billion put what but fall lot points of acres next billion another we nutrients weight a going that crop and I'm anticipate could NPNK. acreage that if we lot don't intentions X X open to it our And get movement a a today indications get wanting emphasis that's year. think, everything I to to applied. more on, of

with our as you had a half relates business. crop tremendous it As of protection mentioned, business, to the crop first the we protection side

XX.X%. were revenues up Our

Our into product chem summer of got and gross crop Steve but really layering -- remarkable lot started Anticipate were quick that in as our in of year, we And a we about we the XX%. constraints. that, to supply as were us number up fall products margins past public well at out last as of lot season. if just will think calls, very there's And going season. something because be see do the to our be again that you'll a I going this a chain to constrained of similar 'XX strategic we're that fairly talking suppliers,

side during our and out into that able -- the -- season but the of hit We're had such. product we've season. like nicely we plants to to with same able going keeping and proprietary strategies base. strong And we this of extremely So, last we an to quickly position our way momentum proprietary feel can't past manufacturing But around those you we'll even year as back upcoming ourselves year our know, first of many growers in an going and same asset service side and the how you positioned move ourselves chain We I going got that a supply tell And again, we've half. be some our chain got had supply excellent lot use We business. to plant business. got get we're going constraints the of as well. of

Operator

question Samuelson next of comes Please Goldman Sachs. Adam from Your go ahead.

Adam Samuelson

was just down maybe I crop business of half in do rates discussion of first kind I year-over-year. And were If your going nutrient volumes your and at down we hoping North America, XX%. to retail the application LTM, looking the on demand. they're guess on XX% keep

those side? bit have lines environment a How even nitrogen do year maybe you a a those should have the think maybe we've of Do I below kind months? get stability normal? the year price played of for crop I So trying of the price of pretty if ton more market rising increases the a next half that's think And guess to spring in sense the we margins how much been of now. that on last representation kind little about applications, abated guess, were XX some out kind way we per you cases PNK last along the on the just on well, in into and think in as accurate of on but the because pricing I'm for especially back over nutrients

Ken Seitz

for you question. Adam, the Yes. thank

to the in and terms And So many half we story again, the didn't season more ground just again, really and characterize compressed that's carryover. nutrients compressed just application spring, the of which as spring the therefore, strong North fall in XXXX go it's rates. some crop would we America. see as a And first in of

we I products. mean, can and to our relates supply grown our and, channel we rates moderation but it just balance the on over see chain, hand as organically over color. perhaps I'll to here crop But Jeff. of carry more as sales as the heading then I into can the digital to relates you just to on proprietary expansion Jeff, certainly it haven't our some some discussion relates results well, it relates in retail's you to as as just it year or application that in of margins it you if to certainly, had and to provide certainly think reflected to nutrients, Jeff,

Jeff Tarsi

look, think like story and of when it further strong the And the just thanks. I back that, actually I at tonnage a 'XX. than Adam, start rates things you goes fall and actually, think story Yes, looking

this to those record 'XX. seen know have in had both career as to remember and in two rate back. You an from I've my application falls business, we I falls strong two back as never 'XX that standpoint, two

an And have But in so, in have North an Australia. with have look ability some when have America, same that -- you we we soil ability ability the you into and here the to we nutrients in North coming Latin bank types America, America. don't at

the increase We because PNK it that. a They we of you planted. these growers season, in got where a take crops But that then a a for urgency, what's heavy full got And bit I into we point in soil And -- a two had of contracted. forward got spring in planting one so And the late they all And you testing seen "You growers of and know get know applications, most lot available soil, that and the falls." crop. an their kind spring there look coming the what, crop 'XX said, once them and will you 'XX. our year nutritional of had fact heavy, of think to you I've so the forecasted crop. when into planning we and we've at on from this get particularly tonnage be back standpoint had when look season, we even last -- to our said this had we and the to urgency quite rates do

look So factor you at one as it. that's

look specifically where The look I place. you when geographically and those at other crops look crop is, at take I is factor shifts, shifts crop when

we if presence so, we where corn retail at look you we in percentage basis big lost that and area. a And and in network in corn, tremendous lost retail tremendous South, to a have soybeans, that a the in that

demand million And and changes stuff. season corn standpoint, came has of and acres we're we corn, more around you so significantly. And XX acres ship that corn a thinking million XX between nutritional by acres somewhere of couple planted XX from plant today, of million million to what we into go this a of USDA soybeans,

then in with the cut -- what acre acre of well, season, factors at in are but factors, sure today point say, get That the end because that's a they growers the rates and involved. that growers per commitment the are reduce going out greatly back look, come rates that PNK always treatment. multiple no will there seed of there end felt it, take one there's is on they we've once in carryover One So And listed just my that's to I you like an they investment cut affect day. going they then growers, to some is, were the including there cost they yield some I make I'm in But were we if and they with in There thing back. for. to have have levels, a soil. had no and seed, out on the basis kind seed corn, $XXX

sophisticated lot It's So a our based we testing. are of that but our manner soil on growers a to-date pretty much more science. in applications do much

in $XX also I deeper nutritionals $XX look, nutritional which ship this the into margin margins And and were think at of when proprietary which I have gross tremendous look and versus up versus while I around a we by ton asked were question think per basis our that they that $XX margins, ago. our even amazing. year a was the year down, year-over-year, was tonnage you did fertilizer was on our contribution look I $XX a -- made,

field. the the more they our put that They So nutritionals, we got proprietary had decided -- treat season past. crop they fact tremendous the of than in went maybe face that's a the in they with planters the ahead again, in and in step-up

good where yields. or high making top feel based of shooting in out growers decisions there ends that. about environment I price So them the out I are every And on of one commodity about a for nutrients feel good went at. how

Operator

from ahead. Raymond Steve of comes question go Hansen next Your James. Please go ahead. Please

Steve Hansen

little back to a around some wanted on to remarks contract here. just I elaborate the potential of up on one. the and general harder price maybe and just perhaps expectations China timing you India and/or bit of with Do came the earlier any the on through follow around of more and timing contract half discussions year of perhaps a now, sort that's want sense those discussions the you

Ken Seitz

-- we're -- just Well, place in certainly is going based is is demand true like watching parts and think you, inventories the ground we're to of a thank Yes. where simply potash And -- world, rationing, yes, that as everyone seeing availability. India it in I those Steven. not on

it's application not in of rates inventories potash sort So traditional country. dwindling the

place in mentioned India, said, ground tons XXX,XXX in earlier, that only like I that on a as sitting the country. it's So

to close zero. very So

of we so-called when provided again, we So say a port, then going you with to X.X say where tons if port we market. would well new contract. five-year back be fall, sort exactly maybe is at fall provided this strategic the it's would But be say inventories, that some be nutrients reasonable in China, hard deck later it ground, India million X.X the to And And thirdly, reserve. when talking will call, sometime the the in about will called that nutrients we that it's this India we those expect million and that for of and then, loan. sitting back there

this lay as that So season. well very low fall inventories in China, down some and volumes will we do in China expect

we expect discussions moderated XXXX price question, where to in they'll the contract standard world come we around it's will where a price. see be What a markets? about So new now have are expect, ton world grade markets It's and that volumes like, significantly. grade, some will Asia those If India, have grade standard biggest the a standard new great event come Steve. levels. up again, trade in go at the but are up have we today, the Southeast markets therefore, we've those of contracts at that seen and somewhat, trading some China those to $X,XXX trading I that's to Indian a

Operator

P.J. go comes from of question next Citigroup. ahead. Your Juvekar Please

P.J. Juvekar

think a -- volume up because I expectation sales that on forward, conditions you cost break those Despite X%. only I year input up looking given seeds? pricing have seed your And for with then were and seeds. the down for would strong what price spring, digits? this are question mid-single that was next be expectations price air between Can

Ken Seitz

Great. for one that And P.J. to I'll you pass the Well, thank over question, Jeff Tarsi.

Jeff Tarsi

to so corn at at you anywhere $XX. $XXX to And shifting you again, from when to it that said it look I look, a when you if an basis you acre, And in acre soybean, an look revenue from P.J. and corn, shifts, Yes, crop sell you you're $XXX $XX when seed. shift have again, from

happy little on of revenue it. look We cutting the half you're it our basically, But when past season the started add, we've revenue in. in here through with our seed planning seed half. grew really first year, it make the the increase into awful you of and And where first the through this at not, lot those we the going campaign with So business. are price we're the seed our very all shifts might proprietary two on going as on side look, If our or 'XX it. strong business. last half seed Believe seed I the in regions seed to portfolio, week. across an were very We very we've was business portfolio. proprietary up XX% margins a margins momentum by fall relates on got I

a into And so -- we've got of that. momentum going lot

Now year you going maybe we'll I forward. see pricing of to prices. missed seed seats And that last raise talked about supplier window our think that I most

going significantly see 'XX season. I think the different into we'll something

be 'XX. XX%, up that will could and up XX% X% going pricing I going think probably as canola 'XX, as to was be up X% into going into corn be XX% soybeans indication high likely to to from

crop in was a we've strong particularly We rise to portfolio. rice Dyna-Gro and see that XXX, our cotton, in this So Dyna-Gro year. new getting in our going soybean introductory a we're costs going of an were success which this rice, year had seed tremendous amount on And as but well. into across

share year. a year, and increase when aren't the see our we the done think this market but across seed think this we'll portfolio done we So for numbers is

Operator

Your of Parkinson comes Please ahead. go Christopher question from next Mizuho.

Christopher Parkinson

some potash, it expected. have of port the Russians Just little are out bunch a export on of Belarusians prices figured kind seems but It a these at and seems end product as in that their of that though bit to out perhaps corollary utilize better kind of of systems how terms normalized But there, than lower holding get basically of still that a questions are in. rates.

terms In how updated of tons trying years I assessment two shortfall 'XX this just figure evaluate of countries mean, ultimately the XXXX? out tight And get detailed really your next of how year, terms everybody much to next your to more considerations? both in can into three be, to that actually the perhaps major 'XX? into over will what's SD versus

Ken Seitz

the yes, question. all shipment. Russian thanks, of we're Well, various and forms And a Chris, -- Belarus. moving And of there's Yes. certainly of of coming seeing parts. for reports out We're lot not

of XXXX, are exports Russian Our that estimate for half is first about the down XX%.

still access are Belarus tidewater we with then, And estimate Lithuania, that number. significant via to pretty a first having that's half shipments down XX%. So their not

of world. at in weren't of months that recalling of this again, Russia constrained least first two significant really shipments the the And that quite out year. out part So, of

expect the As into we year. Russian XX% that then compared with similarly as yes, level. XX% expect for XXXX -- constrained for XXXX, balance up Belarus of by what for And and could XXXX like? the as be we constrained forward, XXXX, be to XX% we might again, that what look much look exports And, shipments full XXXX, could to by

So again, significant. quite really

coming then somewhat XXXX we'll to XX% it of XX% of again, to production financing levels. Belarus, all, volume Russia, segments from and of for XXXX It's is think of Belarus, But moment. the activities those potash of, are from making our And difficult maybe XXXX might be because that out in levels. Russian production these be coming channels After XXXX out And for see is out that more Russia, Our that more the of XXXX, XX% not sanctioned. X% assumptions significant at for down getting port. much to just of challenges some show and developed. at assumption down will say, out we least, range

that, numbers. Belarus we example, So see via through I that's Petersburg the ports at shipping our in for our of know St. assumptions, what's in reports, volumes containers looking Chris, of have and that's experience Canpotex, challenge. I about I to tell that's They're talking tons. lot you, that from a million of million of can up stock, X X -- real always

and empty they for and So X but tip the potash. need those relatively of need containers million and challenging of tons, containers discharge that's them. actually, even volumes to stuff you are at even at small, XX,XXX tip the full container port load And a up port, of to those the be more them to potash, equipped

of But So I bottom how think successful have at remains way, they which, range. to be by to even meet seen our it be. in end million that if the fully the do to to X will they're it's tons, successful, million X order only

hence, So be right that's potash at at through our view going strong for seeing then and through remain right market. a things and, are XXXX, the how XXXX, unfold fundamentals going moment, that to to supply-constrained we're least it's the

Operator

question next Stanley. go Morgan from Please Your Andrews ahead. Vincent comes of

Vincent Andrews

well? as seeing sort new are update your an or is Wondering strategy your Any if progressing. as digital advancing well some benchmarks these maybe us on you're you of of what competitively strategies give if competitors in how just can retail initiatives sort as just larger

Ken Seitz

we put we we Great. in are, Thank you, surpassed our pretty XXXX, and it's Vince, have through digital and middle just that of platform that the and XXXX. -- much past here

target meet little through to lot So the to and over digital. we're Jeff Tarsi of work out success color. all we're billion, with in has and a just that the a give do agronomy, and I'll on over of to And sales doing field. of it our billion to $X detail hand track on But digital $X you more

Jeff Tarsi

make of our Vincent, to Yes, as And a Ken initiative, digital platform. to progress it as digital relates lot continue mentioned, our thanks. we

sales. what field we engaged really in the in enabled digitally people a Our call are

using that's I X.X to is much And as our capture I'm we digital, with real Ken our really fall, think where getting about for that and our put over people $X around through agriculture. As business year-to-date. excited relates category comfortable industry. mentioned, this the value Echelon pretty that's our and we billion these What And it released our precision two. is

these getting keen and on are this more a agronomists of growers our digital them Our at maximize going the just that use to to look with an an able opportunity a lot allows tools it capture more to data advantage by-field it gives and simulation well forward ROI by allows -- growers, margin solution to particularly crop to at using look heck -- as basis our and and being that -- of us make build and to growers a in a our also make it. recommendations best

relates give carbon going to core digital related role and platform had forward committed that very our last ROI, by growers year. very around to want what work in on public that. our technology we're embedded for a seed trying And to it as I in all out ever we've of it a started to like I This fall big so selector, which is this in our the been in possible platform able opportunity progress, helps as part new a not think we work also germplasm earlier, pilots busy in our And feels to be it and our play it make mop we've platform. comes which those -- we'll be don't carbon it year a that is digital sustainability -- again, And our our acreage progress very, campaign now place sustainability spring grains essential again, we our as we're to increasing is along campaign. make in to and best mentioned as is continues And for to seed being will to growers we're our and see of use seed Xx fields. really many growers also decisions right the best our

anybody of platform is out better sustainability I that to don't that going there value think than role play Nutrien that capture so as And forward. a will And positioned and the Nutrien is in Solutions know, forward plays future carbonate you Ag significant going and increasing role. agriculture, and an

Operator

comes Your go Josh of next question UBS. Spector from Please ahead.

Josh Spector

I right constrained now anything strategy any change seeing in year? an there. was could wondering inventory export next just on And phosphate. I and is environment build share foreshadow if China. there or any we're you on production know an that of thoughts specifically, into you're limitations some in of nitrogen could given But the shift production And signs

Ken Seitz

and you for Josh, Well, the I'll thank pass question, over that to one Jason Newton.

Jason Newton

phosphate, from seen, we've Yes, standpoint extent to by think, have surprised China, exports Josh. on extent, some some to the restrictions place. get taken industry production I extended a and the in nitrogen to both

volumes. And place, will to so have and restricted put been urea are actually export Prior up really year, constrained in second exports government by half on the and the phosphate quotas urea that, production in of the XXXX, year-over-year. which export reduce was

to tons million in over are restrictions the to think year as is exports have seen export And declining operating added And first price this has half and use, domestic the we've X decline so the I the production prices your spread despite a points of point, also are from Chinese last that since come over into So, XXX,XXX significantly, rising. year, that in down place. domestic those between domestic inventory Chinese rates rates the domestic to the fact were just which part result. but down widened up, higher price year, tons

declined. reduced demand, the decline phosphate prices below seen rates be today. part capacity global They're you've a definitely of in estimated the that's And that's factors On have dramatic sulfur in of to side, sulfur result in XX% and China. utilization phosphate produce one from demand the -- as a

As perform growers. how Chinese prices international China to the in China big prices. factor supportive supplies globally, certainly the the appears it want prices market versus And watch will go because constrained appears for into in of domestic lower XXXX, to international with be be to target to we government

And some continue restrictions into. form so to expect of we'd

Operator

Your comes go Ben Please question ahead. Scotiabank. Isaacson from next of

Ben Isaacson

export obviously a nitrogen little product the of of different bit advantage set taking U.S. opportunities outside has increasingly up yours. system Their win competitors than and Your

the over Gulf. not forward look course, you in the U.S. export really see you're and able a side, the advantage plant building opportunities five-plus clean As for overall nitrogen, just Do for to of years, ammonia take of yourself on new but next you nitrogen?

Ken Seitz

pass that Sully. to the Raef for you thank I'll question. one And over

Raef Sully

done of that also Yes, UAN. And point exporting actively for than at we've exporting simple fact instead urea answer Ben, been We're UAN I'd the year more to is we've ammonia more what is opportunities yes. the previously. looking this and

flexibility work so And doing we're opportunities more part and is activities give expansions occur. the to as those and brownfield -- in to when those export us of

So the answer exporting of we're it expanding planning doing is actually now, on our capability yes, and future. in we're

Jeff Holzman

Operator, more we question. have time for one

Operator

Your Please of next Michael Securities. Tupholme question ahead. go from comes TD

Michael Tupholme

we've My question relates the to demand rationing seen potash year. this and

outlook? potash of likely you on a You this I year-over-year to guidance, thoughts any to and XXXX, pullback you're as feed demand and potash know but shipment demand share given largely guidance supply-driven meaningful how global the we global still the can have into pricing potash that then I'm wondering potash decline narrowed this for looking the you supply your what might XXXX year if haven't year due global look year you at constraints. means next in demand out for might

Ken Seitz

Well, in same at challenges and increasing parts others for we the you moving but yes, as we, thank know, talked as to question, just relates Russia there. number And about Belarus, time, some there's are a production. Obviously, the you it Michael. ourselves, of

moving I of I assumptions. to detail parts. provide more it to little So, a our Newton on number say, just over a pass could But will Jason

Jason Newton

Sure. Michael.

towards we expectation in I of be well, where would much given the as think earlier as it range for pretty there. on Belarusian bit restrictions year is the supplies continued Ken just with touched expectation look port this a XXXX, our little line

to X look one market. a I expect this sort them watch going in X For XXXX that million will our narrowed same the widen Russia, be if volume factor we additional little just year, bit tons would The year, million probably Nutrien given for range to year-over-year, that to we range also, to think but we range. this have insert down of the XXXX, into that into is

shipments demand. next will But know of so think year, year, we range the of increased of there's million shipments supply to X you million range the this tons be versus would if that in increase that what year's because the this occurring potentially And to levels. probably pent-up demand rationing X likely range available that that's of

will from first in look supply perspective, the of particularly at absorbed, upside the any to a least demand fundamentals be the And surprise at as we strength half continue we XXXX. so agricultural into think and and should

Operator

further Jeff would no at questions Holzman to the for are conference There closing time. like back I turn to this remarks.

Jeff Holzman

for a Relations great day. Have joining Investor today. Okay. any for Thank team us you follow-up is The available questions.

Operator

for concludes conference this gentlemen, We morning. and ask and lines. for please disconnect this everyone would call you participating your Ladies to like your to thank

Nutrien (NTR) 4 Aug 222022 Q2 Earnings call transcript