Good morning, welcome to The Mosaic Company's third quarter 2022 earnings call. At this time, all participants will have been placed in a listen-only mode. After the company completes their prepared remarks, the lines will be open to take your questions. Your host for today's call is Mr. Paul Massoud, Vice President of Investor Relations and Financial Planning and Analysis of The Mosaic Company. Mr. Massoud, you may begin. Thank you, welcome to our third quarter 2022 earnings call. Opening comments will be provided by Joc O'Rourke, President and Chief Executive Officer, followed by a fireside chat, then open Q&A. Clint Freeland, Senior Vice President and Chief Financial Officer, and Yijun Wang, Senior Vice President Global Strategic Marketing, will also be available to answer your questions. We will be making forward-looking statements during this conference call. 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 and in our reports filed with the Securities and Exchange Commission. We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now, I'd like to turn the call over to Joc. Good morning. Thank you for joining our third quarter 2022 earnings call. Mosaic delivered record third quarter revenues of $5.3 billion, which resulted in net income of $842 million, or earnings per share of $2.42. Adjusted earnings per share was $3.22 and adjusted EBITDA was $1.7 billion. These results are driving significant cash flow generation, which is allowing us to return significant capital to shareholders while also continuing to invest in the business and strengthen the balance sheet. During the quarter, we returned roughly $670 million to shareholders, including $600 million of share buybacks. Now, before diving into our operations, I'd like to address current market dynamics. Food security remains a concern around the world. Global grain and oil seed stock-to-use ratios remain at 20-year lows, early data continues to suggest there may be further downside to total production once the fall harvest is complete. It is important to remember that the market was tight when the year began, well before the start of the war. Issues over the last several months have further exacerbated the situation. Ukraine's production shortfall is significant. Weather issues like high temperatures and drought conditions in other major growing regions are having an even bigger impact on an already tight market. In the U.S., weather-delayed spring planting and the compressed planting window reduced nutrient applications. The growing season was further impacted by high temperatures and drought in some areas. Weather tends to be a significant factor in yield, but under-fertilization doesn't help, and you can only mine the soil for so long. Both are contributing to an expectation of weaker than normal North American harvest. This was reflected in the most recent USDA yield forecast. In Brazil, fertilizer shipments appear poised to have dropped around 10% year-over-year. La Niña remains a threat despite the market counting on record-breaking corn and soybean production. Beyond grains and oilseeds, we're seeing food security issues play out in other crops as well. Staples like rice are also seeing significant production shortages, driving some countries like India to restrict exports. Because of this, we see a tight market for global grains and oilseeds continuing into 2023 and beyond. The global fertilizer market remains tight, with supply constraints in both potash and phosphate still unresolved. Global potash supply remains impacted by the significant reduction in Belarusian exports, which we think will be down 8 million tons in 2022. Of the 4 million tons they will export this year, we estimate about 2 million tons were shipped in the first quarter before the sanctions and Lithuania's decision to prevent Belarus from using its ports. Belarus exports are down significantly from the first quarter. We do not expect much recovery through the rest of the year or for most of 2023. This means the market will continue to be short of potash in 2023. The phosphate market is also impacted by supply constraints. China production is down because of environmental concerns. Exports are being restricted to ensure domestic availability and affordability. This year, we expect China's phosphate exports will be down by up to 5 million tons. Those restrictions could extend through at least the first half of 2023 and possibly beyond, as China prioritizes securing domestic food supply and meeting growing industrial demand. While global channel inventories of phosphate and potash remain below historic norms, certain regions, especially in the areas where we do most of our business, saw inventories build in the first half of the year. Prices have retreated back to levels low enough to entice growers to step back into the market. We expect inventories to continue working lower through the end of the year and into early 2023. U.S. fall application has been trending back towards normal levels. We believe we could end the season with inventories significantly depleted, especially for phosphates. The U.S. is also experiencing low water levels on the Mississippi River, which is delaying supply coming through New Orleans. In Brazil, the higher-priced inventory built during the first half of the year has slowed third-quarter shipments. Sentiment is improving. Prices have retreated enough to encourage sales. We expect inventories will end the year much the same as where they started. The barter ratio suggests we are approaching a much more constructive environment for demand. In India, importers are taking advantage of the price pullback in phosphates. India's phosphates inventory is still low while farmer demand remains strong. Government subsidies remain at a level that is supportive of phosphate imports but are likely to leave the country short of adequate supply of potash. To summarize, the strength of crop prices and more affordable fertilizer prices suggest nutrient demand will recover from the summer lull we experienced during the third quarter. Given the constructive ag backdrop, we believe our business is well-positioned to benefit. In our phosphates business, Hurricane Ian forced us to shut down operations late in the third quarter, which delayed shipments at the end of September. Our team performed admirably. We were able to get our Florida operations back up and running quickly following the hurricane. We estimate the shortfall in production to be in the range of 200,000 tons. Looking forward, we now expect fourth-quarter sales to be in the range of 1.7 million-2 million tons. Our phosphate business is expected to benefit from lower raw material prices in the fourth quarter, particularly as low sulfur prices start flowing through our costs. We expect a fourth-quarter benefit of $40-$45 per ton from lower raw materials in our North American phosphate business over the cost in the third quarter. In our potash business, we are realizing the benefits of improved volumes from Esterhazy and from the addition of Colonsay. 11 of the 13 planned miners are now running at Esterhazy. Improved operating rates at Colonsay together are driving higher volumes. We anticipate some turnarounds during the fourth quarter that will impact total production but expect sales volumes to be 2 million-2.2 million tons. Mosaic Fertilizantes continues to be a very good business, having earned $1.2 billion in EBITDA over the last 12 months. High inventories built during the second quarter led to slower than initially expected demand during the third quarter, as shipments typically seen during quarter three didn't materialize. Pricing trends towards the end of the third quarter reached a level that is beginning to drive shipments, and we have begun seeing that in our business. Some of the third-quarter buyer hesitancy is impacting the fourth quarter, but we expect trends to begin normalizing as we finish out the year. Before moving on, I would like to address the next iteration of our transformation process. Over the last three years, we have extracted significant cost efficiencies in Brazil, lowered our cost profile in the potash business with transition to Esterhazy K3, and benefited from the combination of support functions across North America. Our next area of focus is the realization of efficiencies through a digital transformation of how we manage our business. In our release last night, we introduced our global digital acceleration project, an initiative that will transform how we use data to manage a complex business across our global footprint. This effort will upgrade our core systems and allow for more seamless integration across sales, production, supply chain, and global support functions. Over the next several years, the total cost will be about $200 million-$250 million, split roughly evenly between SG&A and capital expenditures. As a result of this transformation, we expect to realize significant benefits in our sales and production planning and our cost and capital management. Similar to our early transformation efforts, this initiative will continue the trend of adding shareholder value. We expect this investment will have a payback in the range of three to four years. Finally, I want to reiterate that we remain committed to our capital allocation strategy. Later this month, we expect to retire the remaining $550 million of long-term debt. That completes our goal of $1 billion of long-term debt reduction. Our CapEx expenditures expectation this year remains unchanged at $1.3 billion, and all remaining free cash flow after these commitments will be returned to shareholders through dividends and share buybacks. During the quarter, we returned roughly $670 million to shareholders, which included $600 million of share repurchases. Over the last year, we've reduced our share count from approximately 380 million shares to 340 million shares. Putting all of this together, our outlook is quite strong. The global agriculture market continues to point to tight supply and demand for grains and oilseeds. We've strengthened our balance sheet. Our team has recovered from Hurricane Ian in Florida. Our potash business continues to benefit from our low-cost position at Esterhazy and the flexibility gained from restarting Colonsay. Our Brazil distribution business has a significant and growing footprint in an important agricultural market. We have positioned ourselves to maximize value across our business, and this has allowed us to return significant capital to shareholders. With that, let's move on to the fireside chat portion of our call. Paul? Thanks, Joc. Similar to last quarter, before we open the lines for live Q&A, we're going to address some of the most common questions that came in last night. First, we received several questions on our general view of both the potash and phosphate markets. Where are we most optimistic, and where do we continue to see risk as we move into 2023? Thanks, Paul. I'm going to hand this over to Yijun for some detail here, but let me summarize by saying we're very positive on both markets, as both remain supply constrained. Ag fundamentals remain strong, and fertilizer prices have moderated from the previous peaks seen earlier this year, which is driving a return to more historic levels. Yijun, can you give us some detail? Thanks, Joc. I'd like to start from North America. The warm and dry weather has allowed farmers to go to the field for full application with a wide open window. As of today, we are still saying products are going to the ground. This improved farm economics and affordability has encouraged farmers to put down their phosphate and potash in the fall. In fact, we started to get customers' inquiries and the request for the spring season demand. We sold a block of phosphate to one of our major customers yesterday as their customers, the farmers, have come to the table to buy product with the concern of the potential logistic issues for the spring supply and very strong cash flow the farmers are having to manage by before end of the year. A good and normal fall applications are setting a good stage for the inventory draw down in North America and set good stage for spring season in 2023. Moving over to Brazil, the barter ratios have improved significantly with the moderation of fertilizer prices and elevated commodity prices. We are saying the Brazilian customers are re-engaging in the purchases in order to prepare the coming Safrinha seasons, and the inventories are coming down. Moving over to India, the farm economics have been very strong this year with the support from their government. The monsoon has also been helpful, as we see demand increases, especially for phosphate. The recently announced subsidy program from the Indian government has been very supportive to their phosphate import and also consumption. We are seeing steady buy-ins from Indian customers on DAP recently at $750 per ton level. With the strong demand in Q4 and getting into 2023, we continue to see the supply constraints for both phosphate and potash. On phosphate, we expect the Chinese export control will continue as we get into 2023 as the Chinese government to ensure the domestic supply availability and that their farmers to be able to get fertilizers for their food production. There's very little new capacities coming online in phosphate production in 2023. Similarly to potash, we envision Belarus and Russia's supply will remain constrained in 2023, and the alternatives elsewhere will not be able to ramp up quickly to offset the continued constraints from that part of the world. To summarize, as you mentioned, Joc, we are very positive to both phosphate and potash as we move into 2023. The next question is on channel inventories for both potash and phosphates. Can you provide some detail on recent channel inventory levels and what we expect for the balance of the year and early 2023? Thanks, Paul. I'm going to hand this one straight over to Jenny. Jenny? Sure, Joc. The inventory level in most part of the world are pretty low. In some of the regions, like in Europe, the inventory level is really, really low given the supply situation in 2022. I probably want to provide some color on the inventory situation in North America and Brazil, where we believe most of the questions about. In North America, for both phosphate and potash, the current channel inventory are above average relative to historical norm at the same time of this year. As of yesterday, our upper country warehouse capacity for phosphate has come down to 30% used, and for potash, that has come down to 50% used. This level of the inventory are right at the same level as we see historically at this point of time. As we are seeing good norm fall application, the channel inventories are expected to come down further. I will also want to remind ourselves, logistics remain very challenging in North America, particularly on the river, which highlights the unique strengths of Mosaic's asset, which can serve North America by both rail and barges. Move over to Brazil. Since the war started in the first quarter, a lot of Brazilian customers rushed to buy products from all around the world in order to ensure their supply. As a result of this rushed buying, we are seeing a very high inventory building at the port in Brazil started in July. That inventory at port has gradually drawn down over the last few months. By end of October, we are seeing the inventory at port has come down by 35% versus the peak in the end of July. The other thing that I want to mention is the import shipment to Brazil. In the mid of the year, the vessels coming to Brazil had to wait for over eight weeks to unload product because the ports' warehouses are so full. Now the waiting time has come down to less than two weeks. That's a signal. In the meantime, we are seeing re-export vessels for both potash and phosphate. With that, we believe the market reached to the bottom in Brazil. Joc, the next question is on the status of our potash production increases, especially given what we've seen with recent demand and price trends. Are we committed to continuing to increase production in 2023? Thank you, Paul. Let me start by talking about Esterhazy. Esterhazy has been a 10-year plan, in that plan, we not only brought out a new mine at K3, but fully intended to bring on an extra million tons of production, which was aligned with the capacity of the K1 and K2 mills. As we talk about that, we've always looked at Esterhazy as being our most efficient, lowest cost operation. Yes, we absolutely will expand the capacity of Esterhazy's K3 mine to meet the capacity of the mill. In terms of Colonsay, we see an immediate need for those tons as the gap in supply from Belarus has meant there's been an opportunity for us and through Canpotex exporting more product. That near-term need we expect will continue into 2023, so we certainly see a need for Colonsay in the near term. Bringing that production on has been relatively inexpensive, likely in the range of $50 per capacity ton. On that basis, that's paid off over a matter of months. How will we look at it as we go forward? We will always be focused on working towards value, not volume, and as such, we will meet the needs of the market and no more. The fourth question we should cover is on Fertilizantes' gross margins in the fourth quarter. How should investors think about the impact of cost inflation in Brazil across our production and distribution businesses, and what are the key takeaways on costs? Thank you, Paul. Yes, inflation is showing up in our cost structure through the increased price of commodities, labor, and inputs, as well as our raw materials. We expect overall the impact on our cost structure to be around 15%. Our distribution business in Brazil benefited by matching low-cost inventory with high-priced sales in Q2. We saw a reversal of that in the third quarter. For a distribution business, due to the timing of purchases, a step down in gross margin per ton is expected. However, even with that, we are still seeing gross margins above our historic norms. With that, operator, can we open the call to questions from the audience? We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to only one question. At this time, we'll pause momentarily to assemble our roster. The first question will come from Steve Byrne with Bank of America. Please go ahead. Yes, thank you. Joc, you were talking about lower pricing kind of incentivizing farmers to start to purchase again. Is that what was delaying it, or were they just simply deferring purchases because prices were falling, and now that it's showing some stabilization, there could be a bit of a flood of purchasing going on from here going forward? Is that reasonable? Yeah. Thank you, Steve. Good morning. Certainly, as prices are declining, nobody wants to step into a market. There's necessary caution. I would argue probably when the prices were higher, there was also a psychological or sentimental response. The economics of planting and using fertilizer never went negative, so it isn't a matter of the fundamentals. It was a matter of the sentiment, I would think, at some point. Then as the prices declined, as you suggest, the buyers take a step back and wait. If they think the price is gonna be lower tomorrow, they'll wait and start buying when they absolutely need to. I think the indication now is the price has in fact stabilized. It's stabilized at a price where they can see easy value, if you will. So they're stepping back in and, absolutely, we expect there will be a pretty steady buying. Remember, at least in North America, though, we are in the fall season, they are taking a price risk for next spring. There might be a little more caution in terms of coming all in, but we're seeing good movement, and that indicates that they believe that this is good value, and that'll continue. Thank you. The next question will come from Adam Samuelson with Goldman Sachs. Please go ahead. Yes, thanks. Good morning, everyone. I guess my question is thinking about your market outlook into 2023 with the increases that you're forecasting in potash and phosphate shipments, how should we think about Mosaic's ability to grow shipments in excess of the market, lapping some of the production issues this year, the increased capacity at Esterhazy? What's a rough framework, Joc, for how much production for you can be up in a market that has higher shipments next year? Thanks, Adam, and good morning. If I think about 2023, starting with potash, and we've been saying this, and with the lack of sales coming out of Belarus, we do see that the market's going to have to ration supply, which does, as you mentioned, bring up an opportunity for us to potentially move more product. I will say that North America, we expect to stay relatively flat. It is not a high-growth market. This is all an export opportunity, if you will. The challenge there are twofold. One is, do we get to the right markets that really need it? The other question is, can we even move it? Those are the first points. The supply chain is at its limit right now, and we struggle to get the tons out, particularly, say, in the first quarter, which I think everyone sees problems getting product out of Canada in the first quarter with winter and all the rest. It comes down to what is the production capacity. We have, I think, developed real great flexibility there with Esterhazy now reaching what I would call its full capacity, bringing on Colonsay to augment that capacity and give us some flexibility so that we can hit the seasonality as well as the increased demand. I think we are well-positioned there. I cannot give you a specific number at this stage of what we think the year is going to bring for demand, but we are looking at a global market of 64 million tons next year in potash, up probably a little bit off this year. I think this year we might have been as low as 62. We do see an improvement in the market. We see the rush of tons that came in the first quarter from Russia and Belarus are probably not coming. A good opportunity for us in that first and second quarter, certainly of next year, and then throughout the year. In terms of phosphates, we are probably a little more production limited in phosphates. We are running those assets, but between the limitations of the resource base, whatnot, we do not have an expansion opportunity really there. We expect that to stay similar in that sort of maybe eight and a half, nine million tons of capacity. How well we utilize those will depend on the market, our expectation is our utilization will be quite high next year. In both those cases, we are looking forward to being very well sold, if you will, and having high utilization of all our assets. That would include our production assets in Brazil, of course, as well. Great. The next question will come from Joshua Spector with UBS. Please go ahead. Yeah. Hi, thanks for taking my question. I guess just given consensus seems to be that the market will be short something like 5 million-8 million tons of potash next year, curious where you think support level is for pricing for potash in that environment, just given your 4Q expectations of around $600 per ton. Do you think pricing moves up from here as inventories come down, or is there a support level you would think about? Thanks. Yeah. Thanks, Josh. If I think about prices, I think there's really at this stage it's going to be sentiment and fundamentals that are really going to be the limitation to prices. I would argue that what we saw, particularly in Brazil when the price of potash went to, say, $1,200, the economics was still okay, but it was starting to get pretty difficult for the Brazilian farmer. The one that they probably work off more is their barter ratio, which became quite elevated. In other words, it was costing them a lot more of their production to buy the inputs than it had in previous years. I think there's a risk if you go too high in price that you will actually start really destroying demand. Look, I think there is a great opportunity for at the same reasonable barter ratios as we've had with elevated crop prices, that we can have very good margins and that the market should be able to move up from here. I don't believe it's going to move to $1,200, but I think there's probably some good room to move from where we are today. The next question will come from John Roberts with Credit Suisse. Please go ahead. Thank you. Actually, it's Edlain Rodriguez. Yijun Wang did an excellent job highlighting the strengths of both potash and phosphate. Granted, it's always difficult to choose between your children, but if you have to differentiate between potash and phosphate, which one do you believe will prove more resilient price-wise over the next three to six months? Thanks, Edlain. Yes, we love all our children, as you highlight. If I look at the market fundamentals, they're both strong, clearly today, potash has a very good position in that as the slightly smaller of the two markets, and it has the bigger supply disruption. The supply disruption in China, while we believe will continue through 2023, the export restrictions out of China, we expect those to continue. That's five million-ish tons on a 70-something million ton market, where in potash, you're talking about an eight million ton decline on a 70 million ton market. As you think about it from that perspective, the problems in Belarus in terms of exports are, A, less likely to be resolved, and B, more significant to the overall market. If I had to be asked which of the two had higher resilience, you'd probably say at this stage it would be the potash market. Thank you. The next question will come from Christopher Parkinson with Mizuho. Please go ahead. Great. Thank you so much. Joc, just taking a step back and looking at the various costs in both of your businesses. In potash, it seems like SN&ES is running well and Colonsay's getting back on track. On the phosphate side, you have relative stability right now in NH3, Faustina ops, and then a decline in the sulfur price. Just on any just preliminary basis, how should we maybe be thinking about the margins or the strip margins in phosphates as we hit on 2023? What are the big puts and takes in your team's view? Thank you so much. Thanks, Chris. If I'm thinking about potash, I'll just hit potash real quick because I think you've touched on that. In potash, it's two things that matter. One is where the product comes from. Obviously running Colonsay at a little higher cost. The other thing that we have to take into account is Belle Plaine is highly dependent on the price of natural gas. It uses arguably some 30 million MMBtus per year of natural gas. If you add a couple of dollars to the natural gas price, it has a pretty big impact on that operation. Other than that though, as you mentioned, the potash pricing or the potash cost is pretty stable. If we then look at phosphates, and quite frankly, we are seeing some inflation in both mining costs and processing. Mining, the distances are getting longer, the grades probably over the years is declining slightly. You've got some costs in there that come up, but they pale in comparison to when you look at the raw materials. If we think about $1,000 ammonia, that represents $200 on the cost of a ton of phosphates. If you think about a $400 sulfur, that represents about a $180 cost on top. You could have at the peak, there was probably $380 a ton in our phosphate cost just on those two raw materials. Now they've retracted back to $100 for sulfur, and I think our average ammonia cost is now in the range of $600 if you take into account our own production and all the rest. That's stable, and I think we talked about a $40 or $50 decline in raw materials cost, and that will fall straight to the margin. Assuming flat prices, you could expect a margin to increase by about $40 to $50. We'll see where the price goes in the next quarter, but that's kind of how that plays out. The next question will come from Jeff Zekauskas with JPMorgan. Please go ahead. Thanks very much. It's a two-part question. In your slide deck, you said that you were contemplating a special dividend. Why is it that you're contemplating a special dividend given your very low valuation and your high free cash flow generation? Wouldn't continuing share repurchases be a higher return for your shareholder? Second, I was hoping you would comment on the possibility of Chinese phosphate rock capacity expansions or DAP or MAP expansions in 2024. Okay. First one first, special dividend. I think we've been consistent in saying that we would look at both dividends, regular dividends, share buybacks, and special dividends. Far, we have definitely focused on the share buybacks, and one of the main reasons for that is exactly as you say, we believe our shares offer as good of value as anything we can think of, that's a good place to return money to shareholders. At the same time, we have to consider all of our shareholders. Some of the long-term shareholders would like to see income. I would say as a shareholder myself, I don't mind the idea of seeing some of it come back as stable income. Quite frankly, if I decide, as I think I would, that the value of that meant I could buy more shares, I'm free to do that as well. I don't think the idea of a combination is bad. We certainly have focused more on share buybacks, but I think we want to make sure we look at all of our shareholders and if a small portion of our return to shareholders is through a special dividend when we're doing well, I think that's fair too. Obviously, on a yearly basis, we'll look at our overall dividend and make sure that we give a fair but affordable dividend there too. Second question. PRock. I'm not sure I 100% understood the question, Jeff, but there's no question from, in general, that phosphate rock mining in China has been restricted greatly because of its proximity to the Yangtze River. For environmental reasons, they've done a lot of restrictions on mining in China. If anything, I would argue that China is probably somewhat resource-constrained from a phosphate rock process, we don't expect expansion there. What we've seen as well in terms of finished fertilizers is they have dropped their capacity significantly and shut down plants a lot, particularly again along the Yangtze River, and have not rebuilt them. I think their capacity is down about 25% now. In terms of their exports, two things are going on there. More product is going to industrial and particularly purified phosphoric acid. I can't help but mention again, the growth of lithium iron phosphate batteries in China is just incredible, and it seems like that may well be the future of batteries is the more economic lithium iron phosphate rather than nickel lithium cobalt. Putting all that together, we see a Chinese government needing to make sure fertilizer stays affordable in China, and they're doing that by restricting exports. We think that'll continue. I hope that answers the question you were asking. If you're asking about potash, I think what we've seen is Qinghai Lake has actually decreased in capacity over time, and I suspect that's just the quality of the resource and what they can extract on a year-by-year basis. The next question will come from P.J. Juvekar with Citi. Please go ahead. Yeah. Hi. Good morning, Joc and team. Just got a couple of quick questions. One you kind of partially answered earlier. I had a question on raw materials, particularly sulfur impact on phosphates. I guess my question there would be, you expect to keep that benefit, you said straight to the bottom line. What gives you confidence that it falls to the bottom line and you don't have to share that with your customers? Secondly, just on this LFP batteries that you just mentioned. My understanding is that the use of phosphate in LFP, it's a very small part of phosphate that goes into LFP. Do you really think that LFP is going to have an impact on the phosphate markets? Thank you. Excuse me. Thanks, PJ. Raw materials first, lithium iron phosphate second. When I say that the benefit of the raw materials will fall to the bottom line, look, in general, that's a flow-through to the customer. What we find, of course, is always supply and demand impacts. In the case of a tight market, more of that sticks with us. In the case of a sloppy market, if you will, the customer takes all of that benefit. Today, we see the market is relatively tight, we think we can maintain our margins, and potentially benefit from that falling cost. In terms of is LFP battery a significant use of phosphates? What we're seeing today, I think we've gone from 100,000 tons of purified phosphoric acid, this is China alone, moving up in a couple of years to about 400,000 tons of purified phosphoric acid. Even year-to-date, the LFPs has gone up to 670,000, and we expect 2022 will be 1 million tons total. What we're seeing is an extremely quick increase in consumption, which we think over time definitely will have an impact on the supply and demand balance for the product. It is a big industrial use for phosphates. The next question will come from Joel Jackson with BMO Capital Markets. Please go ahead. Hi, good morning. I have two questions. Maybe I'll ask them one after the other, if that's okay. Sorry. Mosaic had a- Question rule. You know that. That's three in a row. What's that? Sorry, Joel. I'm just kidding. Go ahead. Sorry. I missed that, sorry. Mosaic had a relatively lower potash sales volume decline in Q3 than your Canpotex partners in Nutrien. You're also guiding to flat volumes in Q4, versus Nutrien guiding lower. You're just sponsored for yourself, but you're linked on the offshore with Canpotex. You just said that you think that potash volumes in the channel in North America are normal, do you think that the pause in purchases in North American channel is a longer period than the offshore market? Look, first of all, I can't comment on anyone other than Mosaic, obviously, and I also don't know the differences in selling strategies or rev rec and all that, so making any kind of comparison. What I will say is what we saw in North America in the third quarter was a pretty good slowdown. What we did also see, though, was a reduction of imports. Imports year to date are probably down by 50% or close to 1 million tons. I suspect we had a pretty good uptake of our summer fill program, or considering how the markets played out, we had a pretty good uptake of our summer fill program. We think our customers came to the table and, again, saw good value and saw that they were willing to price, and that was a good thing. We rev rec'd what we think was reasonable, considering the market. In terms of going forward, again, there's just a high level of uncertainty of where that market's going to be, and I would argue that that pertains both to Canpotex and to the North American market. In the North American market, we expect a decent fall season. If we do better than that, hey, all the better, but the expectation is a decent or normal fall season, and that's exactly what we're seeing. We expect to see the inventory work its way down throughout the season, which is good. I think Jenny said earlier we're down to 50% of our in-market inventory, so that's been run down significantly to a normal level for middle of November. We're seeing a very normal sort of play out, and that is what we would expect. We had a summer fill program. We didn't discount or anything, I think that just says the fundamentals are there and people are ready to buy. The next question will come from Andrew Wong with RBC Capital Markets. Please go ahead. Hey, good morning. I just had, actually, a few questions on Mosaic Fertilizantes. I find it a little bit difficult sometimes for us to get some good visibility there. In phosphate production, it looks like it's kind of trended a little bit lower in the past few quarters now. Can you maybe shed some light on what's going on there and what your expectations are on production going forward? On gross margins going into Q4, if I'm understanding the commentary correctly, it sounds like it'll still be relatively quite high, but maybe sequentially down into Q3, even if you include the wholesale margins. Is that correct? Just the last one. Could you repeat the second piece, Andrew? I didn't quite get the Q4 question. Well, just wondering margins going into Q4. The commentary sounded like it'll still be very strong historically, but maybe down sequentially versus Q3. Sounds like there's some pressure on distribution, just wondering if you include the wholesale sales, which are typically higher margin, would the margin still be down sequentially? Just on cost. Yeah. Yeah. Go ahead. Cost. You want to know? Just on cost. Production, cost, margin, and distribution. Sure. Sure. Just what you expect going forward, should these costs this year that we're seeing in Fertilizantes, is that what we should expect going forward? Thanks. Okay. Okay, that's a brainful. Let me try and hit these one at a time. First of all, phosphate production. I guess we have, over the last couple of years, up and down a little bit on phosphate production. Some of that obviously is from time to time reliability, from time to time moving in different areas of the mining, et cetera, which will happen. The other piece is the market started moving pretty slow, and we ran into where our sales out of production haven't really been up to where we might have loved them, and as such, you got to match your production to your sales. We've had a situation, particularly if you look at single superphosphate, SSP, where we're actually pretty loaded up on our inventory, so continuing to run against a full inventory doesn't make a whole lot of sense. From a cost perspective, that hurts your unit cost. There's a couple of things in play there. In terms of our, when I was talking about margin, I just want to highlight, we take positions, and normally we try and keep our positions fairly balanced, but you tend to take a position as much as a couple of months ahead of when you sell. If you are in a declining market and you buy in July and you sell in September, you tend to take that price risk for those two months. If the prices are going up, you have extraordinary, or you have gains in that positioning, and if the prices are going down, you have losses in that positioning. If we look at Brazil right now, you are seeing that we had very good margins in quarter two. That reversed to some extent in quarter three, although, as I said in the earlier comments, the margins are still looking pretty strong. I think I would credit that with our product management teams, not only globally but in Brazil specifically, who are able to understand the market dynamic, decide how far ahead or how late they want to address the pricing, and how much inventory they're holding. There's a great art to that. As a production company, however, there's limitations on how much of that you can really do. I think that answers most of what you asked there, Andrew. The next question is a follow-up from Joel Jackson with BMO Capital Markets. Please go ahead. Sorry, one to follow up that question. It's a tough one, Joc. Nutrien's going to add some tons going forward here, and obviously their CapEx allocation is set because that capacity, I assume proving ground was already done. For them to place those extra tons has to be all in North America. You said that demand might be 64 million tons next year based on your preliminary guess, up only a couple million from 2022. Assuming Bethune has a little bit more, if that's the case, assuming ICL Group a little bit more, assuming ICL a little bit more, assuming Belarus can maybe get a little bit out more. Who knows what happens with EuroChem? It would seem that Nutrien can't place all those tons. I guess I'm trying to figure out, and you don't have to have an answer, how do you think about all this? If Colonsay is a swing mine, are you cautious to want to run it at the beginning of the year full out if it looks like, based on your own numbers, it may not be needed? Yeah. As you aptly mention, I can't and won't contemplate either my competitor or partner or whatever and what their plans are. I think you have to ask their new CEO. However, let me say how we view the market. Like I said, we see next year that that 8 million tons won't come back, yes. I'm sure ICL will try and push out what they can. I'm sure EuroChem seems to be reasonably effective in getting to market. I will say that Uralkali seems to be not as active in the market this year as previous, and there's been a couple of rumors and whatnot about why. I can't tell you. That would be, again, a question for them. The Belarusians, as long as they can't get product through the Lithuanian ports, they're going to be restricted to either a long rail haul to St. Petersburg, assuming they can get port capacity there, or a long and complicated rail haul to China, which they have done relatively successfully. I think they've probably been able to move 1.5 million tons to China through that rail link. With all of that together, we see a supply side, even with extra tons from Canpotex, we see a supply side in the range of 64 million tons. From our perspective, the market will have to find a way to be at that 64 million tons. In other words, we think there's good need, or there's need for all the Colonsay tons next year. What happens beyond that, who knows? Again, I will emphasize with Colonsay, it cost us virtually a couple of months' production to restart it. We're making a good margin at Colonsay right now, and the downside risk of restarting it was virtually zero, and the upside opportunity was large. To us, that's a perfect value-adding decision. This concludes our question and answer session. I would like to turn the conference back over to Mr. Joc O'Rourke for any closing remarks. Please go ahead, sir. Thank you. To conclude our call, I would like to emphasize the strength of Mosaic's financial performance. We delivered excellent results, and our outlook remains strong. Global agricultural market conditions remain constructive, and tight supply of grain and oilseeds is very likely to continue for the foreseeable future. As a result, fertilizer demand remains strong and supply constraints persist. We're using this opportunity to return significant capital to shareholders, to invest in our business, and to strengthen our balance sheet. Mosaic is in an excellent position to continue to benefit from compelling business conditions throughout 2023 and beyond. Thank you for joining the call. Have a good and safe day, and go out and vote. Thank you. This conference is now concluded. Thank you for attending today's presentation. You may now-