The steep rise in energy prices has clouded the outlook for crop

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1 Market Mosaic The steep rise in energy prices has clouded the outlook for crop nutrient use in the United States. Farmers are paying record prices for diesel fuel to power equipment, for crop nutrients to maintain yields, for propane to dry grain and for natural gas to pump irrigation water. That is forcing growers to sharpen their pencils in order to determine what to plant and how to adjust input usage this year. This analysis indicates that high energy costs are eroding farm returns, but the erosion differs by crop and by region. Higher government payments will cushion the blow, but maintaining sound agronomic and business practices to maximize economic yield still is the best strategy to manage through the cost squeeze. U.S. crop nutrient use is not expected to decline significantly this fertilizer year. The number of acres switched from corn to soybeans, however, likely will be the more powerful demand driver than adjustments in application rates. Uncertainty caused by higher energy prices has delayed fertilizer shipments this fall and will exacerbate logistical challenges next spring. The Impact of High Energy Prices On Farm Economics Quantifying the impact of high energy prices on farm economics is not a simple task. Crop production costs vary widely across farms due to a large number of factors ranging from differences in soil resources to variations in management skills. As a result, cost estimates are just that estimates. Gas $ MM Btu But cost models are useful to gauge relative changes over 14 Source: NYMEX. 12 time even if they do not accurately peg the absolute cost for individual producers. 8 This analysis is based on cost estimates made by Iowa 6 4 State University for corn and soybean production from 22 2 to 25. Fertilizer costs were tweaked continued inside Crude Oil and Natural Gas Prices Monthly Average of the Closing Nearby Option Henry Hub Gas West Texas Crude 5 Oil $ bbl Vol. 1 No. 4 November 25 Energy prices were trending upward before the start of the U.S. hurricane season last summer due to brisk growth in global demand. Energy prices exploded after hurricanes Katrina and Rita ripped through the heart of the oil and gas producing and refining region in the U.S. Gulf. In the case of natural gas, the U.S. Department of Energy estimates that hurricane-related production losses will total more than 85 BCF or approximately 4 percent of U.S. production. Energy markets appear to be calming as a result of the re-start of many rigs and refineries, a mild start to the heating season and larger than expected demand destruction. NYMEX Henry Hub Natural Gas Winter Strip $ MM Btu Average of the Daily Closing Prices of the Nov 5 to Mar 6 Options 15 Source: NYMEX Apr 5 May 5 Jun 5 Jul 5 Aug 5 Sep 5 Oct 5 Nov 5 Michael R. Rahm Vice President mike.rahm@mosaicco.com Joseph Fung Market Analyst joseph.fung@mosaicco.com Market Mosaic is a quarterly newsletter published for our customers and suppliers each February, May, August and November by the Market Analysis group of The Mosaic Company. The newsletter pieces together small tiles of information to create a picture of the market a Market Mosaic so to speak. The analysis draws on external sources of information as well as and from diverse internal resources that span both the globe and all links of the supply chain. This issue of Market Mosaic examines the potential impact of high energy prices on farm economics and crop nutrient use in the United States and also describes the nitrogen production and distribution activities of The Mosaic Company.

2 by including more detailed assumptions about specific fertilizer products and prices. Higher energy prices are pushing up the cost of corn and soybean production in Iowa. These estimates indicate that the variable cost of corn production in 26 will increase 19 percent or $43 per acre from last year. That is about 25 cents per bushel based on the target yield of 17 bushels Estimated Cost of Production for an Iowa Farm Corn following Soybeans Herbicide Tolerant Soybeans following Corn $ Acre Unless Noted Expected Yield (Bu Acre) Variable Machinery (Fuel, Oil & Repair)* $16.81 $2.29 $21.27 $26.51 $43.2 $11.39 $13.91 $13.27 $17.8 $26.65 Diesel Fuel Cost ($ Gallon) $.9 $1.5 $1. $1.65 $2.4 $.9 $1.5 $1. $1.65 $2.4 Seed $3. $31.8 $3. $4.2 $42. $25.2 $31.25 $31.92 $32. $33. Herbicide $31. $3. $32. $32. $32. $23. $18.68 $18.72 $18. $18. Fertilizer* $4.56 $5.5 $53.88 $61.53 $72.99 $19.98 $2.95 $23.8 $28.34 $31.22 Grain Drying* $24.8 $24.8 $28.33 $32.58 $43.9 na na na na na LP Gas Cost ($ Gallon) $.85 $.85 $1. $1.15 $1.55 na na na na na Other $26.9 $25.92 $27.13 $28.7 $3. $2.52 $2.6 $21.69 $23.54 $24.75 Variable Cost $ $ $ $ $264.9 $.9 $4.85 $8.68 $ $ Variable Cost ($ Bu) $1. $1.7 $1.13 $1.3 $1.55 $2. $2. $2.17 $2.38 $2.67 Energy Sensitive Variable Cost $81.45 $94.42 $3.48 $12.62 $16.9 $31.37 $34.86 $36.35 $45.42 $57.87 Energy Sensitive Variable Cost ($ Bu) $.48 $.56 $.61 $.71 $.94 $.63 $.7 $.73 $.91 $1.16 Percent of Variable Cost 48% 52% 54% 54% 61% 31% 33% 33% 38% 43% Percent of Total Cost 22% 24% 25% 27% 32% 12% 12% 12% 14% 17% Other Variable Cost $87.9 $87.72 $89.13 $.9 $4. $68.72 $69.99 $72.33 $73.54 $75.75 Other Variable Cost ($ Bu) $.52 $.52 $.52 $.59 $.61 $1.37 $1.4 $1.45 $1.47 $1.52 Percent of Variable Cost 52% 48% 46% 46% 39% 69% 67% 67% 62% 57% Percent of Total Cost 23% 22% 21% 23% 21% 25% 24% 25% 23% 22% Fixed Cost $25.25 $218.2 $ $224.7 $23.32 $17.23 $ $ $27.6 $ Fixed Cost ($ Bu) $1.21 $1.28 $1.33 $1.32 $1.35 $3.4 $3.63 $3.73 $4.14 $4.24 Total Cost $374.6 $4.34 $ $ $ $27.32 $ $295.5 $326.2 $ Total Cost ($ Bu) $2.2 $2.35 $2.46 $2.62 $2.91 $5.41 $5.73 $5.9 $6.52 $6.92 *Energy Sensitive Cost Source: Iowa State University Extension Service and Mosaic. per acre. If the estimate for 26 is accurate, the variable cost of corn production in Iowa will increase 56 percent or $95 per acre from 22 to 26. That is equal to 55 cents per bushel based on the target yield. The estimates are less alarming for soybeans. The variable cost of soybean production in 26 will increase 12 percent or $15 per acre from a year ago. That is 29 cents per bushel based on a target yield of 5 bushels per acre. If the estimate for 26 is correct, the variable cost of soybean production in Iowa will increase 33 percent or $34 per acre during this fiveyear period. That is equal to 67 cents per bushel based on the target yield. Growing corn is more energy intensive than growing soybeans and the surge in energy prices has boosted the cost of corn versus soybean production. For example, this model indicates that the variable cost of corn production will increase more than $7 per acre between 24 and 26. That compares to an increase of $25 per acre for soybeans during the same period. The jump in the cost of corn production has fueled an intense debate about how many acres U.S. farmers will switch from corn to soybeans next year. That debate is expected to last until farmers pull planters out of their machine sheds next spring and begin filling planter boxes with seed. On Fertilizer Costs Both the production and distribution of crop nutrients are energy intensive. For example, the typical U.S. nitrogen facility burns enough natural gas in one year to meet the annual gas requirements of approximately 128, homes in Minneapolis. 3 Imagine that monthly gas bill! Source: Iowa State University and Mosaic. 25 Distribution operations also 2 are energy intensive because the 15 crop nutrient supply chain is long and large. Crop nutrients 5 typically are produced long distances from where they are used Corn Soybeans and farmers apply a year s worth of production during one or two narrow tillage windows each year. Freight rates for nearly all modes of transportation have soared to record levels this fall. Cost estimates for fertilizer utilize the yield goals and nutrient recommendations by Iowa State University and assume that a farmer applies diammonium phosphate (DAP) and muriate of potash (MOP) to meet phosphate and potash recommendations and then uses anhydrous ammonia (NH3) to meet remaining Elasticity is a measurement used by economists to gauge the responsiveness of demand to changes in price. Price elasticity is defined as the percentage change in quantity divided by the percentage change in price. If this measure is less Estimated Variable Cost for an Iowa Farm $ Acre U.S. Nutrient Demand Elasticities for Corn Short Run Long Run Nitrogen Phosphorus Potassium Source: Vroomen and Denbaly than one in absolute value, demand is characterized as inelastic or less responsive to price changes. If this measure is greater than one in absolute value, demand is characterized as elastic or more responsive to price changes. This table shows both short run and long run elasticity estimates for nitrogen, phosphorus and potassium application rates on corn. These estimates suggest that if retail prices increase 2 percent, then farmers likely would cut nitrogen, phosphorus and potassium application rates approximately 4.6 percent,.4 percent and 3.2 percent, respectively. 26

3 nitrogen requirements. Historical prices for these three products are from the U.S. Department of Agriculture s April survey of prices paid by farmers. Estimates for 26 are based on current wholesale prices plus expected transportation costs and retail margin. Fertilizer costs for corn production in Iowa next year are projected to increase Source: Iowa State University Extension Service and Mosaic. 19 percent or $11 per acre. Based on the target yield of 17 bushels per acre, that is an increase of approximately seven cents per bushel. Nitrogen accounts for five cents and phosphate and potash each account for one cent of the increase. Assuming the cost estimates for next year are on target, fertilizer costs for corn production will increase Farmers, like other managers, seek to maximize profit or reap maximum economic yield (MEY) from each acre of land. A farmer produces maximum economic yield by applying fertilizer to the point where the cost of the incremental fertilizer is just equal to the value of the additional yield that results from the extra fertilizer. Let s consider an example to illustrate the principle. On June 1 a farmer is trying to determine how much nitrogen to apply to corn in the form of side dress ammonia. The farmer planted the crop in mid-may and has committed or fixed all other inputs such as seed, other nutrients and pesticide. The amount of ammonia that will produce the MEY depends on three factors: 1) the expected yield response from nitrogen, 2) the price of corn and 3) the cost of anhydrous ammonia. All of the examples assume a hypothetical yield response curve in order to illustrate the MEY concept. The first and second columns of the tables show the amount of nitrogen applied as side dress ammonia and the hypothetical yield for each rate. The third column is just the added yield resulting from the incremental nitrogen application. Other columns in the tables calculate the incremental revenue and cost in order to demonstrate the MEY principle. The fourth column is the value of the added yield (the added yield times the price of corn). The fifth column is the incremental cost of the nitrogen (the additional pounds of nitrogen times the per pound cost). The sixth column is the added profit and is the difference between the value of the added yield and the incremental nitrogen cost. Finally, column seven shows per acre revenue after ammonia costs (average yield times the price of corn less the total pounds of nitrogen applied as ammonia times the per pound cost). Estimated Fertilizer Cost for an Iowa Farm Corn following Soybeans Herbicide Tolerant Soybeans following Corn $ Acre Unless Noted Fertilizer Cost $4.56 $5.5 $53.88 $61.53 $72.99 $19.98 $2.95 $23.8 $28.34 $31.22 Fertilizer ($ Bu) $.24 $.29 $.32 $.36 $.43 $.4 $.42 $.46 $.57 $.62 Fertilizer Percent of Variable Cost 24% 27% 28% 28% 28% 2% 2% 21% 24% 23% Fertilizer Percent of Total Cost 11% 13% 13% 14% 15% 7% 7% 8% 9% 9% Application Rate (lbs N+P 2 O 5 +K 2 O Acre) Nitrogen (lbs N) from Ammonia from DAP Phosphate (lbs P 2 O 5 from DAP) Potash (lbs K 2 O from MOP) Cost and Use by Product Ammonia Price ($ Ton) $254 $368 $387 $429 $55 $254 $368 $387 $429 $55 Ammonia Application (Tons Acre) Ammonia Cost ($ Acre) $17.74 $25.71 $27.3 $29.97 $38.42 $. $. $. $. $. Ammonia Cost ($ Bu) $. $.15 $.16 $.18 $.23 $. $. $. $. $. DAP Price ($ Ton) $228 $249 $275 $34 $33 $228 $249 $275 $34 $33 DAP Application (Tons Acre) DAP Cost ($ Acre) $16.11 $17.59 $19.43 $21.48 $23.32 $9.91 $.83 $11.96 $13.22 $14.35 DAP Cost ($ Bu) $.9 $. $.11 $.13 $.14 $.2 $.22 $.24 $.26 $.29 MOP Price ($ Ton) $161 $162 $178 $242 $27 $161 $162 $178 $242 $27 MOP Application (Tons Acre) MOP Cost ($ Acre) $6.71 $6.75 $7.42 $.8 $11.25 $.6 $.13 $11.13 $15.13 $16.88 MOP Cost ($ Bu) $.4 $.4 $.4 $.6 $.7 $.2 $.2 $.22 $.3 $.34 8 percent or $32 per acre from 22 to 26. That is an increase of 19 cents per bushel based on the target yield. Of the total, nitrogen accounts for 12 cents, phosphate accounts for four cents and potash accounts for three cents. Fertilizer costs for soybean production in Iowa next year are projected to increase percent or $3 per acre. That is an increase of approximately six cents per bushel assuming the target yield of 5 bushels per acre. Phosphate accounts for two cents and potash accounts for four cents of the increase. The Base Case assumes the price of corn is $2. per bushel and the retail price of ammonia is $4 per ton or 25 cents per pound nitrogen ($4 divided by 1,64 pounds of nitrogen in one ton of ammonia). The farmer should apply nitrogen as long as it adds to profit. For Maximum Economic Yield Ex Corn: $2. $ bu Ammonia: $4 $ Ton $.25 $ lb N Value of Side Dress Expected Added Added Ammonia Corn Yield Yield Yield lbs acre bu acre bu acre $ acre na na $ $ $ $ $ $ $ $. example, increasing the application rate from 9 to poun expected yield. The additional yield is worth $4. per acre comp of $2.5 per acre for the additional pounds of nitrogen. Tha profit. Increasing application from to 1 pounds per ac bushel to the expected yield. The additional yield is worth $2. incremental cost of $2.5 per acre for the additional poun decrease profit $.5 per acre. So, in this case, the farmer would gen to reap maximum revenue after ammonia costs of $35 pe

4 If the cost estimates for next year are on target, fertilizer costs for soybeans will increase 56 percent or $11 per acre from 22 to 26. That is an increase of 23 cents per bushel based on the U.S. Nitrogen Application Rates on Corn vs. Corn Prices target yield. Of the total, phosphate accounts for nine cents and potash accounts for 14 cents. The bottom line is that the price of fertilizer has increased significantly this year, but the increase amounts to just a few cents per bushel of corn or soybeans. Most farmers are unlikely to risk yield by cutting nutrient costs the equivalent of just a few cents per bushel. More importantly, reductions in application rates could result in nutrient deficiencies under ideal growing conditions and limit a farmer from hitting the yield jackpot and improving returns significantly. On Crop Nutrient Demand The sharp increase in production costs has raised concerns about large reductions in nutrient use this year. Some anecdotal reports suggest that big cutbacks are in store, but there is no evidence to support the view of a widespread collapse of nutrient use just as there is no evidence to support the notion of a large increase in nutrient use when fertilizer prices decline. Most econometric studies show that nutrient demand is inelastic or not very responsive to price changes. Common sense also supports this view. Demand elasticity is determined by several factors. Index Source: USDA, CBOT and Mosaic Application Rate Index ( =) $ Bu E 5E 6F New Crop Prices (AMJ Average) U.S. Phosphate Application Rates on Corn U.S. Potash Application Rates on Corn Index vs. Corn Prices $ Bu Index vs. Corn Prices $ Bu K Source: USDA, CBOT and Mosaic. Source: USDA, CBOT and Mosaic E 5E 6F E 5E 6F Application Rate Index ( =) New Crop Prices (AMJ Average) Application Rate Index ( =) New Crop Prices (AMJ Average) First, demand is inelastic if there are no or few substitutes for the product. There are no substitutes for nitrogen, phosphate and potash in crop production. Second, nutrient demand is inelastic because a change in the price of fertilizer typically does not have a large impact on the application rates that produce the maximum economic yield (MEY). The tables illustrate the MEY principle under a number of price and cost scenarios. Although these are just examples, the conclusions are consistent with recent statistics. For example, we examined the relationship between application rates and nutrient prices during the last 15 years and found no correlation. However, we found weak correlation between application rates and grain and oilseed prices. Finally, crop nutrient demand is inelastic because fertilizer still accounts for a relatively small percentage of production costs even at today s higher prices. For example, the corn and soybean cost models indicate that crop nutrients account for 24 to 28 percent of the variable cost and 11 to 15 percent of the total cost of corn production and 2 to 24 percent of the variable cost and seven to nine percent of the total cost of soybean production in Iowa during the last five years. ample Base Case Revenue Added After Nitrogen Added Ammonia Cost Profit Cost $ acre $ acre $ acre na na $237.5 $2.5 $27.5 $265. $2.5 $17.5 $282.5 $2.5 $13.5 $296. $2.5 $7.5 $33.5 $2.5 $1.5 $35. $2.5 -$.5 $34.5 $2.5 -$1.5 $33. $2.5 -$2.5 $3.5 Maximum Economic Yield Example High Ammonia Price Corn: $2. $ bu Ammonia: $525 $ Ton $.32 $ lb N Revenue Value of Added After Side Dress Expected Added Added Nitrogen Added Ammonia Ammonia Corn Yield Yield Yield Cost Profit Cost lbs acre bu acre bu acre $ acre $ acre $ acre $ acre na na na na $ $3. $3.2 $26.8 $ $2. $3.2 $16.8 $ $16. $3.2 $12.8 $ $. $3.2 $6.8 $ $4. $3.2 $.8 $ $2. $3.2 -$1.2 $ $1. $3.2 -$2.2 $ $. $3.2 -$3.2 $291.4 Maximum Economic Yield Example High Corn Price Corn: $2.75 $ bu Ammonia: $4 $ Ton Revenue $.25 $ lb N Value of Added After Side Dress Expected Added Added Nitrogen Added Ammonia Ammonia Corn Yield Yield Yield Cost Profit Cost lbs acre bu acre bu acre $ acre $ acre $ acre $ acre na na na na $ $41.25 $2.5 $38.75 $ $27.5 $2.5 $25. $ $22. $2.5 $19.5 $ $13.75 $2.5 $11.25 $ $5.5 $2.5 $3. $ $2.75 $2.5 $.25 $ $1.38 $2.5 -$1.13 $ $. $2.5 -$2.5 $ ds adds two bushels to the ared to the incremental cost t will add $1.5 per acre to re, however, adds only one per acre compared to the ds of nitrogen. That would apply pounds of nitror acre. This case assumes that the price of corn stays at $2. per bushel but the retail price of ammonia jumps to $525 per ton or 32 cents per pound nitrogen. That boosts the incremental cost of each pounds of nitrogen from $2.5 per acre to $3.2 per acre. In this example, the increase in the price of ammonia does not change the MEY application rate, but it does reduce the revenue after ammonia costs from $35 per acre to $298 per acre due to the higher cost of nitrogen. This case assumes the retail price of ammonia stays at $4 per ton but the corn market catches fire and the local price of corn jumps to $2.75 per bushel. The higher corn price boosts the value of the added yield as well as the revenue after ammonia costs. Now the MEY rate increases to 1 pounds per acre.

5 Old Wives Tales and Other Misconceptions U.S. Farmers Spend the Same Amount on Fertilizer Each Year One of the most enduring old wives tales is that U.S. farmers spend the same amount on crop nutrients each year and if fertilizer prices go up farmers ante up what it takes to maintain nitrogen application rates but deeply cut phosphate and potash rates and expenditures. Such behavior may hold true for some customer segments or in a few local markets, but there is no empirical support for this hypothesis on a national scale. U.S. Department of Agriculture statistics show that total and per acre expenditures on fertilizer vary significantly from year to year. U.S. farmers spend more on crop nutrients when fertilizer prices are high and less on crop nutrients when fertilizer prices are low. Total expenditures have ranged from $6.4 billion in 1987 to $13.1 billion in 25. The average expenditure per acre, calculated by dividing expenditures by grain and oilseed acreage, has trended upward from less than $3 per acre in the mid-198s to $57 per acre in 25. Prices Received by U.S. Farmers are Low Another misconception is that prices received by U.S. farmers for grain and oilseed commodities are low today. U.S. farmers have harvested the two largest crops on record during the last two years and bin-busting supplies along with hurricane-related logistical glitches are pushing the market price of most commodities to low levels. But the market price makes up only part of the total price received by U.S. farmers. U.S. commodity programs effectively provide domestic farmers with a floor price called the loan rate. For example, current loan rates are $1.95 per bushel for corn and $5. per bushel for soybeans. If the market price drops below the loan rate, then the government pays farmers a subsidy called the loan deficiency payment (LDP) that is equal to the difference between the loan rate and the market price. As a result, the total price received by U.S. farmers in this case is the market price plus the LDP. A simple supply and demand diagram helps to explain how this $ Bu Supply program works. If the market price drops below the loan rate, Surplus farmers make planting and input decisions based on the loan rate P3 Loan Rate (P3) and produce a crop equal to quantity (Q3). Prior to 1996, the P2 government would buy and store the surplus (Q3-Q1) in order to P1 Market Price support the market price at or near the loan rate. Now, the Demand harvest (Q3) moves onto market and the price declines to whatever level is required to clear the market (P1). The government Q1 Q2 Q3 Bil Bu then pays farmers the difference (P3-P1) as the LDP. U.S. Net Cash Farm Income Has Declined Sharply This Year Another misconception is that the combination of record energy costs and low grain prices has cut deeply into farm income this year. The latest estimates released by the U.S. Department of Agriculture in early November indicate that the U.S. farm sector still remains in good financial shape. U.S. net cash farm income surged to a record $85.5 billion in 24 as a result of huge crops and relatively strong grain and livestock prices. The most recent estimates show that net cash farm income is projected to drop only slightly to $82.2 billion in 25. Higher government payments, mostly in the form of larger counter-cyclical and loan deficiency payments, are expected to offset much of the decline in marketing receipts and the increase in production costs. Bil $ U.S. Fertilizer Expenditures $ Acre 14 Source: USDA E U.S. Net Cash Farm Income Bil $ 9 Source: USDA Market Gov Payments Loan Deficiency Payment 2 4 5E

6 Nitrogen Operations Mosaic s nitrogen operations include a 5 percent equity stake in Saskferco Products Inc., ammonia production at Faustina, Louisiana and distribution activities in of the largest nitrogen markets in the world. Saskferco is a world scale and energy efficient nitrogen facility located across the road from Mosaic s large potash solution mine at Belle Plaine, Saskatchewan. The facility uses about 2 percent less natural gas per tonne of ammonia than the typical U.S. plant. Mosaic serves as the exclusive marketing agent for Saskferco, selling approximately 1.2 million tonnes of fertilizer and feed products each year to customers in western Canada and northern tier states. Saskferco also owns and operates an 8, tonne warehouse at Carman, Manitoba. Mosaic manufactures ammonia at its Faustina, Louisiana facility mainly for the production of ammonium phosphate (DAP and MAP). This plant can produce up to 5, tonnes of ammonia per year. Ammonia production exceeds on-site requirements and excess Saskferco Nitrogen Capacity by Product Typical Annual Upgraded Tonnage MT Capacity Use for Sale Ammonia Urea Solution 1, 1, na Granular Urea 1, 5 88 Nitric Acid 8 8 na AN Solution na UAN Solution (28%) 23 na 23 MicroGran Feed Urea 5 na 5 Total 1,2 output is sold to agricultural and industrial users or exchanged for product delivered to Mosaic s phosphate plants in central Florida. Mosaic s largest distribution activities are located in North America. These activities are anchored by Mosaic North America Nitrogen Operations Saskferco, Belle Plaine, Saskatchewan Saskferco in the north and increasingly by imports through our Houston port and terminal in the south. Recent investments have increased discharge rates and added unit train loading capabilities at the Houston facility. Mosaic also distributes nitrogen through bagging and blending operations or compound fertilizer production in other countries. These activities are supported by long term supply contracts with regional nitrogen producers. For example, Mosaic imports urea from Egypt into France and from Malaysia into Thailand. Mosaic sources nitrogen from local producers in Brazil but also augments these supplies with imports from Russia and elsewhere. Mosaic is one of Profertil s largest customers in Argentina and NPK compound and bulk blending plants in China source nitrogen mainly from local producers. Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of Such statements include, but are not limited to, statements about future financial and operating results, the predictability of fertilizer, raw material and energy markets subject to competitive market pressures, changes in foreign currency and exchange rates, international trade risks including, but not limited to, changes in policy by foreign governments and changes in environmental and other governmental regulation. Such statements are based upon the current beliefs and expectations of The Mosaic Company's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. This publication may not be distributed, reproduced, or used without the express written consent of Mosaic. This publication contains opinions, interpretations and predictions of The Mosaic Company. The Mosaic Company makes no representations or warranties with respect to the accuracy, reliability or completeness of the information contained in this publication. It is not intended that any party rely, in any way, on the information contained in this publication. The Mosaic Company disclaims any liability with respect to any claims arising out of or relating to reliance on any information contained in this publication. Copyright 25. The Mosaic Company. All rights reserved. This issue of Market Mosaic is available at The Mosaic Company Atria Corporate Center, Suite E Campus Drive Plymouth, MN USA (8) toll free (763)