Nutrien Ltd. (NYSE:NTR) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 10:00 am ET


Nutrien Ltd. (NYSE:NTR) Q3 2019 Earnings Conference Call - Final Transcript


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Greetings and welcome to the Nutrien's Third Quarter 2019 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to Richard Downey, Vice President of Investor and Corporate Relations.

Richard Downey

Thank you, operator. Good morning everyone and welcome to Nutrien's conference call to discuss our third quarter results and outlook. On the phone with us today is Mr. Chuck Magro, President and CEO of Nutrien; Mr. Pedro Farah, our CFO and the heads of our three business units. As we conduct this conference call, various statements that we make about future expectations, plans and prospects contain forward-looking information.

Certain material assumptions were applied in making these conclusions and forecasts, therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions are contained in our current quarterly report to our shareholders as well as our most recent annual report, MD&A, and annual information form filed with Canadian and US Securities Commissions to which we direct you.

I will now turn the call over to Mr. Chuck Magro.

Charles Magro

Thanks, Richard. Good morning everyone and welcome to Nutrient's third quarter earnings call. The global agricultural industry continues to be impacted by challenging North American weather, trade uncertainty, and short-term dynamics. Our results this quarter and our outlook for the fourth quarter reflect these headwinds, but we believe these issues are transitional, and we remain optimistic on the outlook for 2020. So before discussing our results in detail, I would like to provide a perspective on the business.

First on the ag fundamentals, if you look past near-term market headwinds, the outlook is improving. Grain and oilseed stock to use levels are declining, and we expect a significant increase in US planted acres next year. Today US farmers are looking at corn prices closer to $4 a bushel, and soybeans around $9.50 per bushel, which is higher than at this point last year. We expect improved farmer profitability in crop input demand next year particularly after the weather induced reductions this year.

All this bodes well for our business. Second, let's touch on potash. After a strong start to the year demand paused late in the quarter. Buyer simply stepped out of the market in order to reduce inventories and wait for and India or China contract settlement. In July, we said no deal in China is better than a bad deal and that is exactly where we are at today. This is not the first time we've been in a waiting game, and we will remain patient. The recent India potash contract will help bring price clarity and stability to the market. After two strong years of growth for global potash markets in Nutrien sales volumes, we now forecast global demand at 64 million tons to 65 million tons this year, which is a reduction of approximately 2 million tons compared to last year.

The majority of this decline is due to weather issues in North America, weakness in palm oil prices in