美盛 (MOS) 2026年第三季法說會：磷酸鹽減產與2027年成本削減

美盛公司 (The Mosaic Company) (NYSE: MOS) 在 2026 年第三季法說會上表示，磷肥業務仍受高昂硫磺成本制約，而受惠於全球強勁需求，鉀肥業務持續創造現金流。管理層正在削減成本與資本支出，以等待磷肥營運效益出現可持續的改善。

重點摘要

• 儘管在美國與巴西縮減磷肥產量，美盛仍預期 2026 年下半年將實現正向自由現金流。
• 公司已鎖定第四季每噸 615 美元的硫磺供應合約，低於目前現貨價格，但合約採購量僅能滿足約 65%–66% 的磷肥生產需求。
• 管理層預期 2026 年第四季將是 EBITDA 谷底，特別是磷肥業務，主因高成本庫存陸續計入銷貨成本。
• 美盛設定 2027 年營業費用 (SG&A) 低於 5 億美元，資本支出低於 10 億美元，較預期的 2026 年支出水準減少約 2 億美元。
• 2026 年全球鉀肥需求預計將達到或接近創紀錄的 7,500 萬噸。美盛表示，第四季的物流限制可能使俄羅斯與白俄羅斯的出口量減少約 150 萬噸。
• 美盛生物科學 (Mosaic Biosciences) 2026 年淨銷售額仍有望達到近 1.35 億美元並實現正向 EBITDA，全年計劃推出 8 至 10 款新產品。

關鍵財務數據

業務與營運表現

磷肥業務

美盛縮減了巴托 (Bartow)、路易斯安那州以及巴西廠區的產量，使產出與具經濟效益的硫磺供應相符。南米德堡 (South Fort Meade) 與米斯基馬約 (Miski Mayo) 的採礦作業也暫停，以避免磷礦石庫存過剩並保留現金。

公司表示，紐威爾斯 (New Wales) 與里弗維尤 (Riverview) 廠區的生產有所改善。佛羅里達州的營運產能利用率約維持在表定產能的 60% 出頭至中段，合約採購的硫磺供應量足以滿足邁入 2027 年時約 65%–66% 的生產需求。

現金加工成本較上一季下滑，部分原因是公司成本最高的加工設施——路易斯安那廠已停工。管理層表示，由於磷肥成本中約 70%–75% 為固定成本，提高產量仍是進一步改善單位成本的最主要潛在動能。

需求訊號在季末有所改善。美盛表示，在秋季施肥需求轉強的支撐下，其第四季北美磷肥可供銷售量已大致售罄。管理層亦提及巴西庫存處於低檔且大豆種植效益改善，儘管客戶信貸仍受到制約。

美盛預期全球磷肥出貨量將比前一年減少約 2,000 萬噸，且硫磺供應緊縮及價格高昂的局面將持續至 2027 年。

鉀肥業務

隨著生產組合轉向成本較低的埃斯特哈齊 (Esterhazy) 礦區，鉀肥現金生產成本較上一季每噸減少 11 美元。第三季產量低於管理層預期，主因礦石構造異常、定檢大修活動增加以及庫存偏低。

管理層表示地質問題僅屬暫時性。埃斯特哈齊隨後在 10 月創下兩項產量紀錄，並朝 2027 年年產逾 500 萬噸的目標邁進。美盛指出，加上貝爾普萊恩 (Belle Plaine) 與科隆塞 (Colonsay) 礦區，公司擁有超過 900 萬噸的氯化鉀 (MOP) 產能。

公司認為鉀肥基本面維持正向。管理層估計 2026 年全球需求約為 7,500 萬噸，並表示在境內消費與建立戰略儲備的帶動下，截至 9 月中國進口量已超過 400 萬噸。

美盛肥料 (Mosaic Fertilizantes) 與生物科學

美盛肥料 (Mosaic Fertilizantes) 大多數營運據點整季均處於減產狀態，而利潤較高的動物飼料生產則持續進行。分銷利潤率維持在每噸 30–40 美元的正常年化區間內。成品庫存下降以及第三季銷售款項回收，預計將為第四季現金創造提供支撐。

2026 年前九個月，美盛生物科學 (Mosaic Biosciences) 淨銷售額較去年同期翻倍以上。管理層維持其目標，即至 2030 年該業務的 EBITDA 達到 2 億美元。

管理層財測

• 美盛預期 2026 年下半年將實現正向自由現金流。
• 由於高成本硫磺庫存陸續轉入銷貨成本，預期 2026 年第四季磷肥業務及整體合併 EBITDA 將觸底。
• 第四季硫磺成本預計為每噸 800–850 美元，氨成本為每噸 590–610 美元，磷肥加工價差預計落在每噸 350 美元左右。
• 2026 年營業費用預計為 5.1 億至 5.3 億美元，2027 年將降至 5 億美元以下。
• 依據當前減產水準，2027 年資本支出目標設定在 10 億美元以下。
• 美盛生物科學 2026 年預計將創造近 1.35 億美元的淨銷售額，並實現正向 EBITDA。
• 管理層維持長期鉀肥年產量超過 900 萬噸的目標。

風險與關注焦點

• 現貨硫磺價格依然過高，尚不足以支持重啟已減產的磷肥產能。
• 在重啟生產設施之前，管理層需要看到磷肥加工價差出現持續性改善，並對原料成本能維持在較低水準具備信心。
• 第四季財報獲利將無法立即反映每噸 615 美元的硫磺合約價格，因高成本庫存必須先經由系統消化結轉。
• 儘管農場經濟效益改善且磷肥庫存處於低檔，巴西的客戶信貸仍受到制約。
• 埃斯特哈齊礦區在第三季遭遇礦石品位偏低及非預期的鹽岩地質構造，不過管理層表示這些問題目前已獲得解決。
• 重啟磷肥產能可能需要將先前遞延的資本支出提前進行。

分析師問答焦點

重啟磷肥產能的觸發條件為何？管理層表示，光是硫磺價格合理仍不足夠。美盛需要磷肥加工價差持續高於目前水準、現貨硫磺成本顯著下降，並確信重啟後營運效益不會迅速逆轉。

市場是否有足夠需求容納額外新增的磷肥產量？管理層表示，全球磷肥需求目前受到供應受限的抑制。北美秋季需求強於預期，美盛已將第四季的可售產量全數售出。

磷肥成本改善的持久度如何？路易斯安那廠減產雖降低了平均加工成本，但管理層強調，由於大部分成本為固定成本，產量回升才是長期的主要降本關鍵。

為何 2027 年資本支出較低？閒置資產所需的維持性資本支出較少，且不會增加磷石膏堆、沉降區或尾礦設施的廢料負擔。因此，部分支出是遭到遞延而非直接取消。

支撐鉀肥前景的因素為何？美盛指出，支撐因素包括廣泛的需求成長、中國的消費與戰略儲備建置，以及俄羅斯與白俄羅斯經由波羅的海港口的出貨量在第四季估計將減少約 150 萬噸。

法說會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

Good morning, and welcome to The Mosaic Company's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] This conference is being recorded. [Operator Instructions] And now I'll turn it over to Luciano Siani Pires, Executive Vice President and Chief Financial Officer.

Luciano Pires

Thank you, and welcome to our third quarter 2026 earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer. We will then welcome Jenny Wang, Executive Vice President, Commercial, to join Bruce and myself as we open the floor to questions.

We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties.

Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published yesterday afternoon and in our reports filed with the Securities and Exchange Commission.

Please note in today's presentation and in our press release and performance data, we will refer to and provide various financial measures, including adjusted EBITDA, adjusted earnings per share, free cash flow, cost per tonne, and adjusted effective tax rate, either on a total company or segment basis.

Unless we specifically state otherwise, statements regarding these measures refer to our adjusted non-GAAP financial measures. Reconciliations of these measures to our most directly comparable GAAP financial measures can be found in our earnings release. Now I would like to turn the call over to Bruce.

Bruce Bodine

Good morning, and thank you for joining our call. Our message to investors remains unchanged. Mosaic is navigating a difficult phosphate market by managing all that is within our control. I've lived through many cycles over my 30-year career in the industry.

And while certain aspects of today's environment seem unprecedented, one important constant to remember is that markets bounce back. The strongest companies are built to withstand markets like this by taking decisive actions, preserving financial flexibility and positioning themselves to benefit as conditions improve.

Allow me to summarize a few of the steps we've taken. We temporarily adjusted our phosphate production across our portfolio to match the availability of affordable sulfur. This includes curtailments at Bartow, Louisiana, and in Brazil. We've also idled mining at South Fort Meade and Miski Mayo to reduce unnecessary buildup of rock inventory, preserve cash, and better align mining activity with current production levels.

For the production that remains online, our strategic relationships with U.S. Gulf Coast refiners continue to provide an important sulfur sourcing advantage. For the fourth quarter, we've secured supply at $615 per ton. We're continuing to review spending across the enterprise. We've reduced corporate SG&A significantly and expect 2027 SG&A to be below $500 million. We're also continuing to optimize our capital budget and now target 2027 CapEx of below $1 billion, $200 million lower than where we expect to finish 2026. We're continuing to pursue several portfolio actions to improve capital efficiency, strengthen financial flexibility and invest in the opportunities that offer the greatest strategic value.

This includes completion of Canadian land sales last month, netting $36 million, advancing the sale process of Araxá in Brazil and evaluating other noncore assets.

Finally, we've taken important steps to maintain the strength of our balance sheet. In early August, we refinanced and extended all long-term debt maturities that were previously due in 2027 and 2028. We have no long-term obligations over the next 2 years and access to liquidity remains available should we need it.

Together, these actions ensure a strong foundation for any market, and we're already seeing results. Even with production curtailments in the U.S. and Brazil, we expect to generate positive free cash flow in the second half of this year.

Before going deeper into the business, I'd like to address broader markets. Long-term agricultural fundamentals remain favorable and near-term dynamics in our key markets are also starting to improve. After 2 years of under application and now unfavorable weather, yield impacts are becoming more visible around the world.

At the same time, grain and oilseed prices have risen from their lows earlier in the year, which is supportive of better farm economics and nutrient affordability.

Better nutrient affordability is coming at an important moment. Yield impacts in Brazil have become quite pronounced and growers in North America have likely exhausted most residual soil nutrients. Under application cannot go on indefinitely and growers understand that.

Phosphate supply remains constrained with sulfur availability and affordability continuing to limit production and margins across the industry. For those still producing, spot sulfur prices are resulting in unsustainably low stripping margins. Fortunately, we're starting to see some improvement in prices, which is driving incremental production, but current economics remain insufficient for meaningful recovery in global supply.

Some producers in Asia have begun exploring nontraditional sources of sulfur, including reclamation from gypstacks and the restart of long dormant sulfur mines.

These are longer-term solutions that could provide the industry with additional raw material supply options over time. In the near term, however, global phosphate shipments are expected to be down approximately 20 million tons from last year, and we expect this trend to carry over into 2027.

Despite limited supply, we're seeing some indications of improving phosphate demand in our key markets. North America's netbacks moved higher toward the end of third quarter after lagging other regions for much of the year.

Customer engagement has continued to improve in the fourth quarter ahead of fall application and winter fill in North America, and our tons are largely committed.

In Brazil, fertilizer inventories are low, particularly for phosphate. While it's still too early to call it a recovery, we are seeing green shoots emerge as appetite returns.

Higher soybean prices supported stronger demand during the third quarter and farm economics in Mato Grosso in the third quarter were at their highest level in the last 3 years.

Customer credit remains constrained, and we continue to be selective in extending credit, but improving farm economics and low inventories provide a more constructive backdrop for demand in 2027.

In India, phosphate imports have been robust for most of the year. While purchasing has slowed seasonally in recent weeks, additional import demand is expected through year-end. The global potash market continues to be constructive with strong demand driven by good value and inventory replenishment.

China continues to be an important source of demand as it supports domestic consumption and continues to build strategic reserves. Against this backdrop, negotiations for the 2027 contract have already begun earlier than in prior years.

On the supply side, logistic constraints in Russia and Belarus have disrupted roughly 1.5 million tons of potash shipments from the Baltic Sea in the fourth quarter.

Overall, we see a constructive potash supply and demand picture. Turning to our business. I will start with phosphate. As previously announced, we curtailed production at Bartow and Louisiana to align with the affordable sulfur available to us through our U.S. Gulf supply agreements.

In the third quarter, our realized sulfur price of $715 was well below the market average of $1,100 per ton. Looking ahead, our fourth quarter contract was recently signed at $615 per ton, once again below current market price.

Though volumes at that price are not enough to run our U.S. assets fully. And while spot prices have begun to move lower, they're still not low enough to restart curtailed production. In the meantime, we're focused on meeting our customers' needs as best we can while optimizing netbacks and managing inventory responsibly.

For this reason, we began curtailing operations at South Fort Meade and Miski Mayo to avoid building unnecessary rock inventory while concentrate plants are running below rate.

Despite lower operating rates, we've begun seeing improvements in our production costs. Cash cost of conversion per ton saw a meaningful sequential decline, reflecting in part the idling of phosphate production in Louisiana, which is our highest conversion cost facility, and we expect these improvements to continue in the fourth quarter.

Looking ahead, our lower sulfur contract price settlement will have an immediate benefit to fourth quarter cash flows, while the benefit to earnings will take longer as higher cost inventory moves through the system.

Because of the volatility, we've again decided to provide some guidance on raw material costs for the fourth quarter. For sulfur, we expect realized prices and cost of goods sold to be in the range of $800 to $850 per ton.

For ammonia, we expect cost to be in the range of $590 to $610 per ton, and this will result in realized stripping margins in the mid-300s per ton. As lower cost raw materials flow through inventory and our cost actions gain traction, we expect the underlying economics of the phosphate business to improve as we move into 2027.

Potash continues to be a strong performer and an important cash generator. Third quarter cash cost of production declined $11 per ton sequentially as the production mix shifted toward lower-cost Esterhazy volumes.

During the quarter, production at Esterhazy was affected by lower ore grades associated with geology in the current mining area. This is temporary, and we anticipate the ore grades to improve as we continue mining.

We continue to target annual potash production of more than 9 million tonnes over the longer term. In Mosaic Fertilizantes, third quarter results reflected a full quarter of production curtailments across most of the business, while higher-margin animal feed production continued.

Distribution margins were within our normalized annual target range of $30 to $40 per tonne, supported by normal seasonality and commercial execution. We also made meaningful progress reducing finished goods inventory during the quarter and collections associated with stronger third quarter sales are expected to support cash generation in the fourth quarter.

Mosaic Biosciences continues to deliver strong growth. Year-to-date, net sales have more than doubled year-over-year, and we remain on track to generate nearly $135 million in 2026.

We expect to launch a total of 8 to 10 new products this year and deliver positive EBITDA, a strong step toward our goal of generating $200 million of EBITDA from the business by 2030. Finally, I'd like to spend a moment on our recent cost reduction actions and strategic capital allocation priorities.

We are taking more aggressive actions to align our cost structure with current operating conditions. These decisions have been difficult, but they're necessary to position the business for long-term success. These actions include removing fixed costs from idle and underutilized operations, reducing SG&A and concentrating resources on the areas that create the greatest long-term value.

We expect 2026 SG&A to be $510 million to $530 million, but our cost reduction initiatives suggest 2027 SG&A to be below $500 million. Capital spending remains an important lever.

We have reduced our 2026 capital expectations over the course of the year and sharpened our focus on maintenance, reliability and high-return projects.

Based on our current plans, we are targeting below $1 billion of capital expenditures in 2027, roughly $200 million below where we expect to finish 2026. We remain focused on optimizing our portfolio of assets.

Over the last few years, we've divested noncore assets that have allowed us to shift resources to better returning opportunities. This effort continues. One example is the divestiture of our Araxá asset in Brazil, a process we expect to complete over the next several months. We're also pursuing additional land sales in Canada and in Florida.

This year, we've signed deals for $67 million, and we expect additional transactions over the next 12 months. And we're continuing to explore additional divestitures of noncore and underutilized assets that will further ease our CapEx burden and enable us to focus our resources on our opportunities.

Let me close with this. The environment remains challenging, but we are acting decisively and seeing increasingly constructive signals across our markets. These actions have strengthened our underlying business and have positioned us to generate strong cash flow and returns as markets normalize. With that, we'll open the call for questions.

Operator

[Operator Instructions] The first question will come from Christopher Parkinson with Wolfe Research.

分析師問答

Christopher Parkinson

You've spoken a lot about over the last couple of quarters about just having sulfur at the right facilities to basically sustain operating rates at the facilities that are, in fact, running. I'd love to just go through, kind of, a state of the union of New Wales, Bartow, Riverview, understanding that there can be differences in operating rates based on products, so on and so forth. But where do you stand there in terms of your sulfur supply heading into 2027? How do you feel about New Wales after, I think, one of the company's largest turnarounds in history in the first quarter of this year? There's still a lot to kind of look forward to. So I'm just, kind of, curious on where you think you are in that process?

Bruce Bodine

Chris, thanks for the question. Something we do talk a lot about and are working hard on. But just on the sulfur piece, we do have sulfur and confident we have sulfur going into 2027 to meet what we've, kind of, said about 65%, 66% of our production needs.

And that fits nicely with the Florida footprint. And that also helps us alleviate water management issues in Florida's tropical environment on rainfall because one of the biggest ways to do that is to run the asset.

So, we feel good about where we are from a sulfur supply, again, on our contract basis, which has continued to stay advantaged to spot, and we are optimistic that we can continue to do that with the relationships that we have with the refiners.

On the second part of your question is how are things going at the facilities? Generally, things are going very, very well. We've seen production improvements at New Wales. We've seen production improvements at Riverview. I think, Chris, you like to see, kind of, operating rate, if I'm not mistaken, operating rate for the Florida footprint generally is in the low to mid-60% versus 10-K.

And those vary month by month, as you just said, on product mix. But what we see when we put the gas pedal down when product mix lines up at New Wales, particularly, is very good production and no concerns on the things that we were dealing with over the last 2 to 3 years.

So, we'd love to get no more than anyone else, the sulfur thing behind us where we could demonstrate that more fully, but we are seeing very good results at Riverview, New Wales. Bartow continues to perform when DAP is a heavy product mix because that plant makes it better than anyone.

And like I said, the Florida footprint is working to balance that sulfur that we have very well and hit the objectives of dealing with cash flow in the ways that we want.

Operator

The next question will come from Joel Jackson with BMO.

Joel Jackson

A couple of potash questions. Just first at Esterhazy, can you talk about hitting a lower grade part of the ore last quarter? Was it hitting a salt horse that you have to move the machine somewhere else? And then we know there was some seismic activity or maybe generated by the miners. But if you can comment on that. And then I just wanted to talk about the guidance for Performance Products going forward? Is the run rate we saw in Q3 now the new run rate with K-Mag gone?

Bruce Bodine

Yes, Joel, I appreciate the question. Let's just start with the seismic activity. I think there was some press potentially on that yesterday or day before. It's not unusual to have seismic activity in that deposit.

It happens. I don't want to say once a year, but that wouldn't surprise me if it was something like that. It's pretty moderate on the Richter scale standpoint. There's monitoring that the Canadian government has.

We have our own internal monitoring as well. We did issue a statement just because of that activity was felt at surface and in the town of Esterhazy specifically. So we want to make sure that we brought comfort to the community that there was no abnormal issue there.

We do have protocols when those things happen to check, as you can imagine, the precious infrastructure underground that we have, particularly around the shafts and other mine workings that are critical.

And everything was unaffected as it normally is. And our shafts are built for seismic activity that's pretty significant given that there's a history of seismic activity there.

But as you can imagine, that whole piece of ground between the operators and that is pretty developed. And as you said, seismic activity is not unusual. So I just want to put that at ease that nobody likes to see that, but it's an artifact of heavy mining.

And we've got protocols in place and then it's important for us to make sure we update our community citizens to make sure that everything is all right as well. When it comes to your second question before I turn over to Performance Products, and I'll turn that to Jenny, we did put out a statement on ore grade.

But let me cover maybe the broader question more broadly, which is just potash in general because there's some things that I want to clarify in quarter 3, and then I really want to talk about where we are even through October because it's quite exciting.

Although we did hit our sales target that we put out guidance on for quarter 3, our quarter 3 total potash production was below what we anticipated going into the quarter. So, there's a few reasons for that. One, Joel, you nailed is we did encounter some anomalous ore features.

They were, kind of, salt domes that were not anticipated. That happens from time to time and you have to adjust your mine plan. That was behind us, but did cause some issues. The other was in aggregate, in quarter 3, we had heavier turnarounds that impacted us in totality in time from shutdown to full ramp-up.

And then given our low inventory throughout quarter 3, and it remains pretty low as well right now, we were unable to build inventory as we needed for the anticipated Q4 sales and we did have to adjust guidance, which I know many of you have seen.

The good news is that the facilities are performing very well. In fact, Esterhazy, particularly I want to highlight, has set 2 records in October. The first was most production tonnes on K3 ore in its history. And then the second is the most ore tonnes mined at the site in over 60 years.

So, just to anchor on some proof points, Esterhazy is performing extremely well, has been as the quarter ore tonnes were actually quite good as well, one of the highest -- the highest of the year.

So, going into '27, Esterhazy is on pace for over 5 million tonnes of production. And together with Belle Plaine and Colonsay, confidently, we have total MOP capacity over 9 million tonnes at a time where we feel, as we've described what's going on in the Baltic and other places of the world that the world is going to need it.

So, we're pleased with where we are in the potash segment, Joel. So thanks for the question. And with that, I'm going to turn it over to Jenny to talk about Performance Products.

Jenny Wang

Thanks, Bruce. Joel, I think your question is more related to K-Mag. And with the transaction completed on Carlsbad, we actually stopped sales of K-Mag in Q3, and we've been supporting and bridging customers with the new owner of Carlsbad.

Aspire is another performance product in our potash portfolio with robust demand to potash. The value of boron added to Aspire has been supported by customers in North America and Brazil as well. So it's -- we are very pleased to the performance -- of our performance product in potash portfolio.

Operator

The next question will come from Ben Isaacson with Scotiabank.

Ben Isaacson

Bruce, you mentioned earlier about conversion costs were improving. And I just wanted to ask about that trajectory.

At your Investor Day, you talked about a target -- a 2027 target of reaching $90 to $95, and let's leave the year for now. But is that quantum still achievable? And if not, what's the right target? And is the gap to achieving that only based on the volume improvement? Or are there further operational changes or upgrades that need to be made?

Bruce Bodine

Ben, thanks for the question. So going back to Investor Day, just to level set, that was the target, and those future targets were not adjusted for inflation.

So, you, however you want to adjust those, not trying to get cute, but that just is the reality of what that presentation was based on. And yes, we are seeing improvement. In fact, was it $11 a ton, Luciano, quarter-over-quarter improvement on conversion costs?

Now granted, some of that is due to Louisiana being down, and that's a higher conversion cost facility. But when we put those targets out, Ben, they were based primarily on cost absorption on those incremental tons.

And just given 70%, 75% of our costs are fixed, that was a huge lever for us on achieving lower costs. There are other things around water management with some of our potential injection wells to better manage water at a lower cost that would be part of that as well.

But by far, the biggest needle mover is volume improvement. Luciano, anything to add to that?

Luciano Pires

Just one other proof point. Turnaround costs are not included in conversion costs, and they have been coming down. I'm talking about just turnaround, not turnaround plus idle plus utilization.

If you look, compare last year with this year, it's a decline of about $100 million. So another very good trend. Of course, this is going to be a little fuzzle going forward because of the idle and underutilization costs. But turnaround itself, you may remember, we had a very bad Q2 in 2025 and a lot of spend in Q1. So they have come down significantly as well.

Operator

The next question will come from Andrew Wong with RBC.

Andrew Wong

Just 2 things actually. One is on the CapEx. The 2026 spend was cut to $1.2 billion from $1.5 billion. I think doing some work on gypstack and settling ponds.

And for 2027, you're targeting less than $1 billion. So can you just talk about what kind of spend is being deferred and when that CapEx spend would need to occur? And then just secondly, on the phosphate ramp-up decision, what would you need to see to make that decision? Is it just mainly about access to sulfur? Do you see as the same period for phosphate margin improvement before restarting? Could you -- like if the Strait were to reopen tomorrow, would you just start prepping for that right away in anticipation of phosphate margins improving? Can you just help us understand that a little bit better?

Bruce Bodine

Yes, Andrew, that is definitely the topic we focus on the most these days is what would that look like? But let me address the CapEx first.

So, we have said before this acute disruption in the Persian Gulf and what we're dealing with right now that $1.5 billion that we were planning to spend in 2026 was going to be our high watermark. We would have seen CapEx moderate a little bit over maybe the next 2 to 3 years in the 5-year period, but at the 5-year point being at that kind of $1 billion mark.

We still believe that, that's the case. Obviously, we are not running our full footprint, which that was based on. And how we have been able to moderate CapEx to date in this year and looking forward into '27 is because we are far from running our full complement of footprint.

And when you're not running the asset, it doesn't take sustaining CapEx. You're not eroding, you're not corroding, you're not doing anything. It's basically in the garage waiting to be driven. And so we have the luxury in an odd way of being able to avoid right now, general sustaining CapEx. Along with that, those facilities that aren't running, whether they be mines or whether they be fertilizer complexes, their waste disposal requirements are not being needed to be expanded or the next new capacity built because we are adding no waste to them.

So they also sit as they did when they were parked, ready to take on those tons. And then in time, as they are filled, that CapEx spend will need to be put in to build new gypsum stacks or new clay settling areas or new tailings dams in Brazil.

So, that wave is just being spread out and pushed but again, we still believe that in time, when things do normalize, we will get down to a run rate of that $1 billion of CapEx for the full complement footprint that we were talking about prior to the Persian Gulf conflict. So, when will that occur? Well, I wish I knew, but I know you've thrown some hypotheticals, and we kind of play scenario dark board here in our own office on what could happen.

But we need to see, first and foremost, stripping margins on a sustained basis above where they are today for our full portfolio. And more importantly, we need to see spot sulfur that we would be exposed to, to turn the new -- those idled facilities on far improved to where those spot prices are today.

And we would need to have the confidence that those aren't going to whipsaw again because these actions are very serious actions to idle these things and to bring them back, bring people back, we want to have the confidence that we don't have to do this again in another week, month, 4 months down the road.

So, we will have a very moderated approach if and when that -- well, not if, when that time will come because we are seeing good signs that things are improving.

Sulfur prices on the spot market are definitely improving in all geographies, but U.S. Gulf spot is one that we're particularly interested in, given our footprint exposure.

And all of those things are starting to come to the right direction -- that move in the right direction. But they're not quite where they need to be yet. And then when they do get there, we need to see that sustain and have confidence in total stripping margin, which includes ammonia and all the other things, be north of where it is today. Luciano, you got more you want to add?

Luciano Pires

Back to the CapEx question, another data point to call your attention. The asset retirement obligations, if you look into our consolidated statement of cash flows, we now -- for the second quarter in a row, we have a line specifying how much we spent on those.

If you look at that, 9 months ended September 30, 2025, $201 million. Nine months ended September 30, 2026, $133 million. So, it's a very meaningful decline. And that decline is structural because it's associated with work that has already been completed, especially in our permanently idle sites like Plant City. So another important number to watch.

Operator

The next question will come from Duffy Fischer with Goldman Sachs.

Patrick Fischer

I just want to understand a little bit more on phosphate, the demand picture for your product today. So if you could get more sulfur, at your $615, would you produce more phosphate? And is the demand there to sell it at current prices? And then what's your take on North American fall application this year relative to this year, kind of flat? Or do you think it will be down again?

Bruce Bodine

Duffy, great question. Thanks for asking. Let me just talk just generally, and I'm going to turn it over to Jenny. But what we see not only in North America, but around the globe is that demand is actually surprisingly good on the upside.

And I think if we could get the economics and the confidence from a risk profile that those economics are sustainable for a period of time that we would turn things back on. And we probably do that in a moderated way as volume would flow through. We've thought about that. We've got a number of permutations that we would work on.

But to answer your question, demand is pretty good. I think demand is constrained generally because of the sulfur in the supply side. So, I'll let Jenny add to that and then address North American fall, how this year compares to normal?

Jenny Wang

Sure. Thanks, Bruce. I'd like to say the demand on phosphate globally, it is actually constrained by supply.

It has been the case over the last couple of years, and this year is in particular because of the software-related product constraint. So this supply constraint, it is there. And one of the evidence that I can share with you is North America.

If you recall, last year, we saw reduction in North America more driven by farm economics. So last year, North America phosphate shipment was down 15% year-over-year.

This year, the general expectation was the demand will be further reduced, and that was probably the case for the spring application.

As we got into fall applications, especially when ag commodity prices went up in late second half of September, the farmers were really motivated to step in with a very clear understanding of end application of phosphate over the last seasons and also with the improving farm economics.

So the fall demand for phosphate in North America has been coming much stronger than many of us anticipated. Even our customers, the retail customers, they've not prepared for such a strong demand.

So with that, you have heard Bruce mentioned that we basically sold out our Q4 availability. So if we were to be able to produce more tons on phosphate in Q4 or into '27, we do -- we definitely see the demand. So that's probably hopefully answered your question.

Operator

The next question comes from Vincent Andrews with Morgan Stanley.

Vincent Andrews

Just wanted to ask a bit on the Eastern European potash situation and tie it together with some of the other global dynamics. Bruce, I think I heard you refer to probably a reduction in exports, particularly out of Russia of potash for the fourth quarter. Wondering if you know if that's just production that's being continuing, but exports that aren't taking place.

So therefore, it will get -- those exports get pushed into future periods or some of the trade publications are suggesting there might actually be a reduction in production. And I think if I tie that together with your announcement that you're going to make 400,000 less tons of potash this year than you thought before and your other comment that sounds like China is coming to the renegotiating table on the contract maybe earlier than was previously expected just given where their port inventories are. Can you just put all that together for us in terms of what you're seeing and how you think that's going to play out over the next quarter or 2?

Bruce Bodine

Yes, Vincent, thanks. A lot there to unpack. I'm going to probably get Jenny to assist me on this. But let's start with kind of the big ones is just demand overall for potash, we see that being record or very close to record this year, about 75 million tons of demand. So there is good demand. The affordability factor on potash still feels good for buyers and farmers.

So that's the good news in the backdrop, and we continue to see good growth going into even '27 on that front. China has come in big, but they've got big demand. So there stock-to-use ratios, when you put aside, and I'll let Jenny get into the details of that, their strategic reserve, which they really -- that's an emergency program, and there is all sorts of hurdles that have to be met in order for that to be released.

That is really not on the table. So, that is why given the backdrop and the constructiveness in the market, and I think some of these things that we've been talking about with Eastern Europe potash shipments coming out of the Baltic Sea, things like that, that China is very eager to engage.

In fact, there has been engagement, as you've noted, and I said in my prepared comments, this is some of the earliest that they've done that possibly ever. But let me let Jenny kind of add to that because we see the potash market being very constructive. Jenny?

Jenny Wang

Sure, Bruce. I guess probably just want to add some data points. The growth of demand for potash this year is actually across the board with one exception, which is in Southeast Asia, Malaysia, Indonesia because of the drought situation.

Other than that 2 markets, the growth of potash has been really robust in 2026. In terms of China, indeed, we have seen a very strong import demand. And as you can see that they've imported more than 4 million tons up to end of September, and that added port inventory, which is very visible, right? I want to call 2 things.

One is the domestic demand, the on-ground application increased close to 1 million tons. So that import demand increase is not only building inventory, it actually supports the growth of the demand in country.

The second part is really the strategic reserve. It's very clear the Chinese government has seen the demand and the benefit of building its reserve in order to support its agriculture market.

The early starting point of the negotiation pertains their desire to further build the strategic reserve. We heard speculations of higher reserves being ordered to be built.

So, those are the very strong drivers to further build the demand growth into 2027. Lastly, on the logistics constraints at Baltic ports, in Russia, and that was widely reported. It's ordered by the Russian government in order to support the shipment of other commodities, including grains.

And then potash was ordered to slow down its shipment. So, the question is whether those slowdown of shipments are going to be inventory built or those shipments are going to be gone.

We tend to believe those tons are likely going to be gone, because they can't be shipped out into the market. The total reduction of the export out of Russia and Belarus, likely going to be 1.5 million tons in Q4 only, which further supports the strong fundamentals for potash as we get into 2027.

Operator

The next question will come from Salvator Tiano with KeyBanc.

Salvator Tiano

Just wondering what are your expectations, firstly, broadly for phosphate pent-up demand next year, say, for the market, if prices stay where they are currently still at elevated levels? And what could be the shipment rebound? Could it be very material in double digit if phosphate prices become much more affordable as sulfur goes down? And you have that very interesting slide showing the phosphorus content in the soil globally.

Firstly, can you clarify, it shows that there's sufficient or excess phosphorus in North America. That seems to be a little bit at odds with a comment you had earlier in the call that the nutrients in the soil are depleted rapidly.

But also given what it does show that in Europe and North America, we have a lot of phosphorus in the soil. Is there any chance this indicates actually that we've been over-applying for years and the actual North American European market demand should actually be quite lower than it's been for the past 5 years?

Jenny Wang

Yes. So, let me start from the phosphate deficiency. I am very glad that you saw the map. So for the markets like Europe and U.S., although you see that part market soil type probably are more favorable to keep the nutrients of phosphorus in the soil, but it does not mean that nutrient removal can stay without replenishment, can stay longer.

So a couple of data points. TFI just released a report on its sample testing for the soil in North America. It shows 45% of the soil tested in North America shows phosphorus deficiency. So, that is one data point. The second data point, as you mentioned earlier, phosphate application in the U.S. market over the last 2 seasons have been lower than the normally required, although you have not really seen the yield impact as we did in Brazil, which is very visible for the yield impact.

In the U.S. market, this past season, while the harvest is just ongoing or just complete, we heard from our customers or farmers on the ground telling us the yield level are far off than what they anticipated. And those anecdotal reports from the field may not be the same as the data that have been published, but we believe the yield impact will eventually be reflected to the production eventually going to support the corn and soybean prices.

So, that's the phosphate efficiency part. On the demand side, I just want to remind you some of the data points with the significant reduction of application or shipment for phosphate due to supply across the globe, we are seeing significant reduction on the shipment. It's including in North America, we're going to see further reduction this year in '26. If you combine '25 and '26, North America phosphate reduction application are going to be reduced close to 25% versus normal year.

Brazil, this year, we are going to see over 25% of the phosphate reduction in terms of the application. Remember, Brazil, you will see on the same season yield impact due to this application reduction. We're seeing India, even with the government support, their applications are going to be reduced by 20%.

So, this lists are going to go long. With the coming improvement of the ag commodity prices, as we mentioned, on the yield impact, and potentially weather impact, we do see a very strong tailwind for phosphate demand as we get into 2027.

Operator

The next question will come from Matthew DeYoe with Bank of America.

Matthew DeYoe

I wanted to hone in a little bit on the mining costs because I think some comments have been made in passing a little bit to me over time. If we just look at like the last 3 years, what would you say consolidated stripping ratios have been for the Florida mining operations? What should that look like in '27 versus '26? What generally have variable mining costs been? And with all this debottlenecking work, is it kind of reasonable to -- if you publish a new technical report this year, I kind of think it would make sense.

Bruce Bodine

Yes, Matthew, I don't have '27 stripping margins at the tip of my fingertips for mining in Florida. And part of that is we're still going through the planning process of what '27 will be based on where we see demand.

And so that's a big variable because each mine has got something different. But in general, stripping margins have increased, particularly because of our South Fort Meade reserve. That reserve is incredibly deep.

It does have good rock in the eastern part, but we are having to bench mine there, which means strip off a 20-foot layer of overburden, get the dragline back down on the bench and then be able to mine the last 80 feet of overburden rock innerburden, whatever may be there.

So that has definitely added to costs at South Fort Meade. Those are highly variable as well. And I'm sure you've been to our sites unlike in potash, where things are more consistent, generally speaking, in Florida, you can see in a few square mile difference, higher variability.

But in general, South Fort Meade has a higher strip ratio than what it has had in the past. The good news is, at least for now, in one regard is that, that mine is idled, and we are benefiting from a much lower costs as we move into '27 with just Four Corners Wingate and then what is running at Miski Mayo, that is a much more advantaged composition for rock supply and cost.

Operator

The next question will come from Edlain Rodriguez with Mizuho.

Edlain Rodriguez

Just trying to get your insight into the affordability concerns with phosphate. Like if prices stay as elevated as they are, like what's going to drive farmers back to normal consumption? I mean, do we need to see lower phosphate prices or a significant increase in crop prices? Because with December 27 corn prices below 5, I'm not sure that's going to do it. Like what do we need to see happening for the affordability concerns to be kind of be resolved?

Bruce Bodine

No, I totally get your question, Edlain, and I appreciate that because it's something we talk about a lot, too, is there probably is at some point, a ceiling that could put the damper on demand.

But we actually don't ironically see that right now. And it's hard to separate, and I know this is the difficulty for all of us is what is actually driving the lower consumption? Is it actually supply constraint? Or is it actually demand destruction due to affordability? And I can't parse and parcel that particularly well. It might be a little bit of both, depending on the geography and what's going on.

But in North America, particularly, and Jenny alluded to it earlier, and I'll let her comment on it again, if she's got more to add, is we are seeing the farmers actually want to engage. It's a matter of likely not being able to get as much product as they want.

Farmers know the agronomic science. They know what's in their soil, particularly in the U.S. and in Canada and North America in general. Brazil as well. They're very sophisticated in testing that. They are seeing, as Jenny alluded to earlier, proof points that their soils are deficient.

They are going to -- for that marginal cost, probably want to apply fertilizer to maximize yield as long as they can get it. Could there be a point where that destroys? We always are trying to think about that. We don't necessarily control that because these prices are global.

But the other thing is if you believe, and we do that yields will be impacted because of underapplication that has happened over the last 2 seasons -- 2 years, fertilizer seasons -- fertilizer years, these are going to be evident at some point in time.

Likely, the biggest proof point to that is going to be a harvest that comes off in the spring. And we will see what yields actually are, and that will probably set a direction on ag commodity prices.

And if those yields are down where we think what we're hearing boots on the ground from our people, that's probably more on the downside to what some of the published yields are. That's going to be tailwinds for ag commodity prices. It's going to be tailwinds for farmer economics, going to be tailwinds for fertilizer demand.

Jenny, anything to add? She's shaking her head. No, Edlain. So I learned from her well.

Operator

The next question will come from Kristen Owen with Oppenheimer.

Kristen Owen

So you've talked about production costs improving, but not yet at the level to restart. You've also given us some color on SG&A and CapEx in 2027. Can you just explain for us what is the production assumption underlying those estimates? And what would change in that cost outlay if you were to get comfortable enough to restart production?

Bruce Bodine

Yes. Kristen, I'm going to turn it over to Luciano and give you some color around that question.

Luciano Pires

So the assumptions are the current production levels. So if you go back to full operating rates, then you would have all the cost dilutions applying on top of that on the proportion of 80% fixed cost, 20% variable costs.

Bruce Bodine

So Kristen, it's too murky right now to know exactly when. So, what we are doing, as we have said and what I think a company in this situation should do is control what we can control and plan for the things that are only directly in front of us, which is maintaining that sulfur advantage contract that we have versus spot, producing as efficiently as we can and placing those tons in the marketplace where there is active demand and waiting to see and being ready to capitalize on upside economics as fast as possible when those costs, particularly around raw materials, fall into a favorable sustainable level that we feel worth the risk to restarting and then that would justify if there's additional CapEx that we've deferred that needs to be pulled forward and other costs.

So, that's how we're thinking about it. And I think that's the right way to think about it because we just don't know when that's going to happen.

Luciano Pires

But one other thing is absolutely Q4 is going to be a trough in terms of EBITDA, especially in the Phosphate segment because of the flow-through of the guidance we just gave of $800 to $850 per ton on sulfur prices.

So it's obviously higher than the $715 of this quarter. So, that's going to have an impact on realized stripping margins that you're going to see in print. And -- but although from a cash perspective, we're going to immediately start realizing the benefits of the $615 contract price and lower sulfur prices. So, we could talk about many tailwinds on the cash side, but the number you're going to see from an EBITDA perspective in phosphates and for Mosaic will trough at quarter 4.

Bruce Bodine

So, with that, we're at time for this call, great detailed and complex questions. Much appreciated the active engagement, but thank you to all of you.

But to conclude our call, I'd like to reiterate a few key points. We have a strong foundation, a more resilient portfolio and the flexibility to manage through the current environment while remaining focused on long-term value creation. We're seeing increasingly constructive signals across our markets.

Agricultural fundamentals remain supportive. Phosphate supply does remain constrained and potash continues to benefit from strong global demand. As affordability improves and growers replenish nutrients following an extended period of under application, we are confident that Mosaic is positioned to generate stronger cash flow and returns as market conditions normalize.

So, thank you all for joining us today, and have a great safe...

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.