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Date

May 7, 2026, 10:00 a.m. ET

Call participants

• President and Chief Executive Officer — Kenneth Seitz
• Executive Vice President and Chief Financial Officer — Mark Thompson
• Executive Vice President and Chief Commercial Officer — Christopher Reynolds
• Chief Economist — Jason Newton

Takeaways

• Adjusted EBITDA -- $1.1 billion, with growth attributed to increased customer demand, higher global benchmark prices, and execution in both upstream and downstream business segments.
• Potash sales volume -- Over 3.5 million tonnes sold, setting a record for a single quarter and confirming robust global demand.
• Potash adjusted EBITDA -- $578 million, supported by higher benchmark prices and strong volume performance.
• Nitrogen segment adjusted EBITDA -- $482 million, attributed to higher global benchmarks and increased domestic agricultural sales from debottleneck initiatives.
• Retail adjusted EBITDA -- $108 million in a seasonally slow quarter, reflecting higher crop nutrient sales and increased proprietary product gross margins in the United States and Australia.
• Phosphate segment adjusted EBITDA -- $57 million, with higher sulfur input costs counteracting increased benchmark prices and sales volumes.
• Production guidance -- Maintained at 14.1 million-14.7 million tonnes for potash and 9.2 million-9.7 million tonnes for nitrogen, inclusive of planned turnarounds at three nitrogen facilities.
• Retail EBITDA guidance -- Unchanged at $1.75 billion-$1.95 billion for the year, with high single-digit growth in proprietary products' gross margin projected.
• Capital expenditures -- Guidance for the year held at $2 billion-$2.1 billion, in line with prior expectations.
• Share repurchases -- Approximately $55 million per month so far in the second quarter, after $550 million completed in the prior year.
• Net debt reduction -- Adjusted net debt lowered by about $600 million in the preceding year.
• Strategic portfolio actions -- Active reviews and sale processes under way for the phosphate business, Trinidad nitrogen operations, and the Brazilian soybean seed business; sale of the Brazilian seed business expected in the second half of 2026.
• Wholesale market dynamics -- Over 30% of global urea trade and approximately 25% of ammonia and phosphate trade directly impacted by the Middle East conflict and Strait of Hormuz closure, leading to higher prices and supply disruption.
• Brazilian operations update -- Five blenders idled, three sold, 64 unproductive locations closed, and proprietary products in Brazil described as performing well.
• Inventory positioning -- Retail channels and wholesale customers expected to have very low inventories by the end of the spring season, creating capacity for refills despite potential channel hesitancy.

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Risks

• Thompson said, "we expect further pressure on phosphate margins in the second quarter due to elevated sulfur and ammonia input costs."
• Seitz stated, "It's an unsustainable environment for the phosphate business," highlighting ongoing margin compression and strategic uncertainty in this segment.
• Ongoing Middle East conflict has disrupted over 30% of global urea trade and 25% of ammonia and phosphate trade, increasing input and freight costs, and creating "uneven" expectations for supply normalization.
• Seitz noted, regarding the Trinidad nitrogen operations, that "gas availability and gas pricing continues to be a challenge in Trinidad," and safe shutdown has been undertaken due to these operational constraints.

Summary

Nutrien (NTR +1.49%) reported first-quarter results featuring record potash volumes and sustained EBITDA growth across key operating segments, while capital and production guidance remained level. The company advanced strategic portfolio reviews, with efforts centered on optimizing underperforming assets including phosphate and Trinidad nitrogen, and launched sales processes for non-core businesses in Brazil. Management signaled consistent retail and wholesale demand trends, with guidance anchored by firm crop acreage estimates and positive proprietary product mix shifts. Capital allocation prioritized share repurchase activity and debt reduction, alongside reaffirmed capital expenditures, as the company monitored ongoing geopolitical disruption that is materially impacting global fertilizer trade and logistics.

• Seitz said, "We increased upstream sales volumes to 6.5 million tonnes, lowered controllable cash costs, and delivered strong performance in our downstream retail business."
• Management confirmed, "our full year guidance ranges remain unchanged," indicating stability in outlook despite major external market shocks.
• Thompson stated, "approximately 35% of our second quarter planned nitrogen sales volumes were committed, a similar percentage compared to the prior year," suggesting predictable forward sales despite global volatility.
• Company representatives confirmed, "portfolio reviews that are being pursued to enhance asset quality and provide greater focus and investment to assets with the strongest returns, free cash flow contribution."
• Kenneth Seitz highlighted, "If we look at the broader business that we have on the ground in Brazil and the actions that we've taken, which we've talked about, idling blenders, selling of the 5 -- idling 5 blenders have sold 3, the steps that we've taken on cost reduction and reducing head count in that part of the world to focus on collections, the idling of unproductive locations, 64 of them and getting that business into a position where it's albeit small, generating a bit of EBITDA," emphasizing decisive restructuring actions.

Industry glossary

• Debottleneck: Process improvements or investments made to increase production capacity at existing facilities by removing specific process constraints.
• Upgraded nitrogen products: Value-added nitrogen fertilizers (such as urea or UAN) derived from basic ammonia, suitable for direct agricultural application.
• Tuck-in acquisition: Acquisition of a company or business unit that complements and enhances an existing business platform, often for integration into existing operations.
• Canpotex: Export marketing and logistics company responsible for selling and shipping Canadian potash on behalf of member producers, including Nutrien.

Full Conference Call Transcript

Kenneth Seitz: Good morning, and thank you for joining us today to review our first quarter results and the outlook for our business. The ongoing Middle East conflict has disrupted global fertilizer and energy markets, resulting in higher global benchmark prices and input costs. Despite heightened geopolitical uncertainty, Nutrien's strategic priorities, capital allocation approach and full year guidance remain unchanged. We continue to focus on what we can control, including operating our assets safely and reliably and serving our customers efficiently. Our first quarter results reflect this focus on operational excellence. We increased upstream sales volumes to 6.5 million tonnes, lowered controllable cash costs and delivered strong performance in our downstream retail business.

These results highlight the capabilities of our world-class operations, extensive distribution network and strong customer relationships built over many decades. In potash, we achieved a record sales volume of more than 3.5 million tonnes in the quarter, an indicator of the continued strength in global demand. We increased production from our low-cost 6-mine network and progressed mine automation investments that have proven to deliver safety and cost benefits. Our potash assets position Nutrien as the most reliable global supplier with a high-quality and low-risk resource base.

In Nitrogen, we attained an ammonia operating rate of 92% in the first quarter and increased sales volumes of upgraded nitrogen products to agricultural markets from our North American plants, demonstrating the benefits of recent debottleneck projects. Our reduced natural gas cost reflects having 100% of our production from low-cost North American nitrogen plants. In Retail, our network was well positioned to meet strong crop input demand in our core markets. We continue to execute growth initiatives, including expansion of our proprietary products business, network optimization projects and tuck-in acquisitions. In the first quarter, we allocated approximately $45 million to complete a high-quality tuck-in acquisition located in the U.S. Corn Belt with a strong strategic fit within our distribution network.

We also progressed portfolio reviews that are being pursued to enhance asset quality and provide greater focus and investment to assets with the strongest returns, free cash flow contribution and competitive advantages. As previously announced, we are reviewing strategic alternatives for our phosphate business and remain on track to solidify the optimal path in 2026. The review includes completing a detailed assessment of individual assets and alternative configurations for our phosphate business. In parallel, we are progressing a sale process and received significant initial expressions of interest. Second, we continue to evaluate all strategic options for our Trinidad nitrogen operations, including exploration of a sale of the facility.

This work is aligned with our focus on strengthening our core North American asset base. Lastly, we are reviewing each component of our Brazilian business as we assess the best way to participate in the market's long-term growth. As part of this review, we have commenced a sales process for our Brazilian soybean seed business that is expected to be completed in the second half of 2026. Now turning to the market outlook. Middle East exports are a critical part of global fertilizer and energy trade with the ongoing conflict having the most direct impact on nitrogen and phosphate supply as well as associated feedstock cost and availability.

The conflict has directly impacted over 30% of global urea trade and approximately 25% of ammonia and phosphate trade that relies on the Strait of Hormuz to access global markets. Elevated natural gas costs and reduced LNG availability have also impacted nitrogen production and costs for producers in Asia, Europe and other key regions. For phosphate, higher sulfur and ammonia input costs have pressured margins and resulted in lower global operating rates. Looking ahead, the path of supply normalization will be shaped by this pace of 3 key factors. First, a full reopening of Strait of Hormuz and key trade routes is required to allow stranded product to reach global markets.

Second, in the event that the conflict is resolved, production assets that have been idled would require additional time to restart, albeit with some level of operational uncertainty. Finally, a portion of capacity that is currently offline due to damage either at production sites or upstream will take several months and, in some cases, years to return. Taken together, we expect the normalization of nitrogen and phosphate supply is likely to be uneven. The conflict has not directly impacted potash supply, and we continue to see strong potash demand across all key global regions.

We maintained our forecast shipment range of 74 million to 77 million tonnes, with demand trends expected to test existing global operating and supply chain capabilities through 2026. Global potash benchmark prices increased over the past few months have been commensurate with the strong fundamentals as well as increased freight costs. With that overview, I'll now turn it over to Mark to provide more detail on our first quarter financial performance, guidance assumptions and capital allocation priorities.

Mark Thompson: Thanks, Ken. As Ken described, our operating performance has progressed well to start the year, and our full year guidance ranges remain unchanged. Adjusted EBITDA in the quarter increased to $1.1 billion, reflecting strong customer demand, higher global benchmark prices and solid execution in our upstream and downstream businesses. Retail adjusted EBITDA totaled $108 million in the first quarter, which is typically a seasonally slower period for our retail business. We saw increased demand across our core geographies in the first quarter, resulting in higher crop nutrient sales volumes and stronger proprietary products gross margins in the U.S. and Australia.

Importantly, our expense reductions achieved over the last 2 years have been maintained as first quarter expense changes were driven by higher downstream sales volumes. We've maintained our full year retail adjusted EBITDA guidance range of $1.75 billion to $1.95 billion. We continue to expect high single-digit growth in our proprietary products gross margin in 2026, supported by the launch of new products, organic growth in our core retail geographies and the expansion of our international business. Similar to prior years, we expect first half retail earnings to account for approximately 70% of the full year total. In potash, we delivered adjusted EBITDA of $578 million in the first quarter, driven by higher global benchmarks and record sales volumes.

Nutrien has an extensive midstream distribution network serving key markets across North America and internationally, one of our key competitive advantages. We utilized this network to deliver over 3.5 million tonnes of potash in the quarter and expect annual sales volumes of 14.1 million to 14.7 million tonnes, in line with our historical average share of global shipments. Capitec is fully committed through the end of June, and we anticipate a similar split between offshore and domestic sales volumes in the second quarter compared to the prior year. Our Nitrogen operating segment generated adjusted EBITDA of $482 million in the first quarter, primarily due to higher global benchmarks.

Our sales volumes reflect no production from Trinidad and New Madrid as reflected in our annual guidance assumptions. This was partially offset by higher upgraded product sales volumes directed to domestic agricultural markets from recently completed debottleneck initiatives. We maintained our annual nitrogen sales volume guidance range of 9.2 million to 9.7 million tonnes, which includes execution of planned turnarounds at 3 facilities in 2026. Prior to the onset of the conflict in late February, approximately 35% of our second quarter planned nitrogen sales volumes were committed, a similar percentage compared to the prior year. In phosphate, we generated adjusted EBITDA of $57 million in the first quarter.

Higher sulfur input costs offset the benefit of higher global benchmark prices and sales volumes compared to the same period of 2025. The business demonstrated reliability improvements in the quarter with a 20% increase in production volumes compared to the prior year. Our phosphate sales volume guidance remains unchanged. However, we expect further pressure on phosphate margins in the second quarter due to elevated sulfur and ammonia input costs. As we look forward to the remainder of 2026, we expect free cash flow to be supported by tight global fertilizer supply and demand fundamentals, business improvement and organic growth drivers, combined with a rigorous focus on optimizing our portfolio.

Alongside strong operational performance, we view consistent capital allocation as essential to enhancing our competitive position. To that end, our capital expenditures guidance for 2026 remains unchanged at $2 billion to $2.1 billion. Last year, we completed share repurchases of approximately $550 million and reduced adjusted net debt by approximately $600 million. We intend on continuing to repurchase shares on a ratable basis with a pace of approximately $55 million per month thus far in the second quarter, and we see opportunities to further strengthen the balance sheet in 2026. I'll now turn it back to Ken for final comments.

Kenneth Seitz: Thanks, Mark. Nutrien is well positioned to generate value for shareholders under any market scenario. We operate low-cost and reliable upstream assets, a midstream network that has the reach and flexibility to capture efficiencies across the value chain and a downstream network that is positioned to reliably serve growers with a comprehensive portfolio of value-added products and services. We continue to take purposeful steps to simplify the business, strengthen and grow our core asset base and improve capital efficiency. These priorities are designed to drive structural free cash flow growth and generate sustainable returns through the cycle.

To close, I'm encouraged by the team's execution in the first quarter and positioning of the business for the remainder of 2026 as we continue to stay the course on our strategic and capital allocation priorities. With that, we'll be happy to take your questions.

Operator: [Operator Instructions] First question comes from Andrew Wong from RBC Capital Markets.

Andrew Wong: I wanted to ask about the longer-term implications that you see from the Iran war and the Strait being closed. We've had 2 major fertilizer food shocks now in less than 5 years. Are you seeing countries that are net fertilizer and food importers looking to build up more inventories? Could that drive more demand that's a little bit more elevated in the next year or 2?

Kenneth Seitz: Andrew, thanks for the question. Yes, there's a lot to unpack there, obviously, given that it's still early days in terms of questions like building inventory, we're still short of product given what's going on in the Middle East. But we sort of think about it, given the impacts with more than 30% of global urea trade being impacted 25% of ammonia, 25% of phosphate.

You sort of think of it over 3 time horizons where we're watching milestones for each signpost costs, for each -- and of course, the first one is just the opening of the Strait of Hormuz and the inventory that's caught upstream of the Strait in the Persian Gulf and the pace at which once, of course, the war is over, and we're all hoping and watching for that, the pace at which those volumes come to the customer unload and then get back into being filled back up again, another one sort of normalization of logistics and trade following the opening of the Strait of Hormuz. So that's one.

Two is, of course, we know that a significant swath of production in the Middle East is not operating at the moment. And so we'll be watching very closely for signposts that say those facilities are starting back up. We know that start-up of those type of facilities can be bumpy. We have experience with that ourselves. And so the pace at which we sort of see normalization of operations to the extent that, that's possible on the back of normalized logistics. So that would be the second piece. And that, of course, would be a bit further out in time.

And then third would be watching for actual damage of physical infrastructure, whether that's on nitrogen production facilities themselves or on gas, natural gas production, of course, the damage in the South Pars gas field, 20% of the Qatar LNG facility that won't be back up online for 3 to 5 years. That has serious implications, obviously, for these huge export markets, Europe and South Asia and Southeast Asia that are dependent on Qatar gas. So those 3 things and the pace at which that happens and what that means for volumes, we can't say at the moment.

What we can say is we believe it's going to be tight for a period of time here, given just the huge role that the region plays. I will say that other ones to watch in the market. And I think consistent with what you're saying about inventory building is, for example, India has established a task force now on nitrogen and devising plans in light of how much natural gas they import and their own nitrogen infrastructure to ensure that they get the volumes. Similarly, China looking to restrict urea exports.

We're seeing 3 million to 4 million tonnes perhaps compared to the 5 million tonnes last year, Europe facing $16 TTF pricing and depending on Tampa ammonia, whether that's an economic endeavor or not. So there's a lot of moving parts there, Andrew. Again, we're watching those sort of 3 -- those 3 sort of milestones as it relates to opening of this strait, normalization of production and then what happens with actual infrastructure damage. But we would say that we expect prices to be tight for some period of time.

Operator: Your next question comes from the line of Vincent Andrews from Morgan Stanley.

Vincent Andrews: Wondering if you could speak a little bit more to what you're seeing in retail, both for the remainder of the Northern Hemisphere season, but also how you think the back half of the year would play out. We're definitely sensing some investor concern about farmers' economics and thrifting and things like that. So if you could talk about sort of what, if anything, you're seeing on that and what gives you the confidence to stay within the guidance range for the year? And maybe just a reminder of what we saw last time around when maybe in the post Russia-Ukraine time period when we had some high prices as well.

Kenneth Seitz: Yes. Thanks, Vincent. So yes, maybe I'll just say a few words about what we're seeing thus far into the year and then hand it over to Mark for our guidance assumptions and what gives us confidence to maintain our guidance range of $1.7 billion to $1.95 billion in EBITDA out of our downstream business. So I'd by saying notably, corn prices have been hovering for December corn up to $5. And so that is a bit of a tailwind. And that's true for soybean prices as well. We have seen strengthening. Thus far into 2026, we've had strong customer engagement with our grower customers, and that's been in line with price expectations, prior expectations.

And it's supported by above-average planting progress for this time in the year and the need to replenish crop nutrients in the soil given the huge corn and soybean crop that was taken off last year. So we're maintaining our estimate of acres, 94 million to 90 million acres of corn, 84 million to 86 million acres of soybeans. And this far into the year, we're not seeing farmers switching. So again, maintaining those ranges and therefore, maintaining our own guidance ranges. I'd just say, again, growers are going to do what they need to do to maximize yields in this environment. We saw that with our proprietary products business in the first quarter and in April as well.

And we've seen healthy, again, healthy crop input demand over the first 4 months of 2026. So on balance, up to this point, and on average, that's what we've seen so far in 2026. For the balance of the year and our guidance assumptions, I'll hand that over to Mark.

Mark Thompson: Thanks, Ken. Look, I think Ken summed it up pretty well. I think the main punchline is that the business is performing well. We've seen strong customer engagement year-to-date. We feel very confident in the midpoint of our guidance and the range that we laid out to start the year. And the majority of the assumptions that we laid out at the start of the year actually remain the same across the business. Just to reiterate, we expect high single-digit growth in our proprietary products gross margin this year. And again, that's coming from new product launches in North America, increased demand in core retail geographies and the expansion of our international business and our business in Australia.

We assume that favorable weather in Australia and a stronger livestock market over last year will result in some improvement there. And of course, our continued efforts to manage cost across the business. If there's been any changes or small shifts, it's that I think relative to February, we would now anticipate that higher crop Nutrien gross margins on a per tonne basis would be ahead of our prior expectations. And we think that will at least offset any potential reduction in demand we might see, which is primarily in phosphate, as we've talked about, and some higher fuel expenses as a result of the war in the Middle East.

But if you step back and look at the business as a whole, we don't really see any change to margin expectations across our other product segments, and we've largely maintained our acreage projections, as Ken said. So you sum all that up, and we feel really good about the guidance for the year and what we're seeing from customers so far this spring.

Operator: Your next question comes from the line of Joel Jackson from BMO Capital Markets.

Joel Jackson: I know you don't give a lot of guidance, but could you talk about like you would think with the better price we've seen in nitrogen, there's a lot of puts and takes, the better price of nitrogen, some better price in potash. Like are you feeling better about this year's outlook and earnings than you were 3 months ago? Maybe you can try as best as possible to kind of bucket some of that? And why didn't you raise the retail EBITDA guide? It would seem like you may get some markup in inventories. It would seem like you get something better from a higher commodity price environment. Maybe you can just elaborate on that, please.

Kenneth Seitz: Thanks for the question. Yes, I think it's fair to say we are feeling better than at the start of the year. And as you, I think, appropriately put it, there's a few reasons for that. If we talk about potash and the very strong global demand that we're seeing, our 74 million to 77 million tonnes that we're maintaining and that's low inventory starting the year in Brazil, multiyear lows. We saw that in China as well with a very early settlement in February at $349, and yet Chinese inventory is going to remain low at sort of 2 million tonnes at the port.

I mentioned the huge crop that came off in 2025 and the need to replenish that for our part. We had a fully subscribed winter fill at $355 a short tonne and our latest posted price is $385 a tonne. Southeast demand is strong. So we look around the world and on potash, we're constructive, and we've seen that in some firming in the price, and that really is owing to the potash fundamentals, the fact that potash continues to be the most affordable of the crop nutrients and the fact that potash is certainly less impacted than other crop nutrients given what's going on in the Middle East.

So as you said, looking at the different sort of buckets, that's one, and we're constructive on nitrogen. Our plants are running well in this environment. And so with prices where they're at, given this conflict in the Middle East and some of the discussion that we've had about the duration, the potential duration of that, yes, we've been constructive on nitrogen. Our focus will continue to be to safely and reliably run those plants now with half of them enjoying Henry Hub pricing and the other half enjoying AECO pricing. And phosphate is a different story. We've talked about that.

Phosphate is challenged for all the reasons that we talk about, sulfur pricing, ammonia pricing and a market that was frankly tight even prior to this conflict in the Middle East. So that will continue to be a challenge for us. And then Retail, and you mentioned our Retail guidance. Yes, we're watching the spring. We're not through the planting season yet. And so there are a lot of things can happen yet through the planting season. We are absolutely constructive on our retail business.

That's the reason we've maintained our guidance range, but we're not going to, at this stage, in the planting season and in the year, start to make prognostications about how the balance of the season could go. We are just confident in that range.

Operator: Your next question comes from Hamir Patel from CIBC Capital Markets.

Hamir Patel: In Brazil, you pointed to a process for the soybean seed business coming to fruition in the back half. What's your latest thinking on the total opportunity to improve returns in Brazil? And what portion of that would be the soybean seed business?

Kenneth Seitz: Yes. Thanks, Hamir. What I'll say is that the soybean business itself we'd sort of say is immaterial in the context of materiality. But yes, we are pursuing a sale of that. If we look at the broader business that we have on the ground in Brazil and the actions that we've taken, which we've talked about, idling blenders, selling of the 5 -- idling 5 blenders have sold 3, the steps that we've taken on cost reduction and reducing head count in that part of the world to focus on collections, the idling of unproductive locations, 64 of them and getting that business into a position where it's albeit small, generating a bit of EBITDA.

And in the backdrop of all that, yes, making portfolio decisions, seeds is one of them. Our proprietary products business continues to do well in Brazil, and we continue to focus on that, which leaves our retail operations in Brazil. And that really is going to be the focus of the balance of 2026 is how it is that we think about exiting that Retail business. And we're just working on that at the moment. Brazil continues to be a core market for us. It's a growing agricultural region. We supply a lot of potash to that part of the world, one of the largest.

And we know that's going to continue to grow as the Brazilians open up more acres, which they do every year and with all the infrastructure build-out required to get those volumes in land onto the acres. So again, Brazil, very important for us, supply of fertilizer potash and proprietary products, the balance of it, well, we intend to have some conclusions on at least the plan by the end of this year.

Operator: Your next question comes from Ben Isaacson from Scotiabank.

Ben Isaacson: Just a quick question on rising freight, logistics and overall cost inflation. Can you talk about your ability to keep your netbacks stable or rising? And once the Iran war winds down and the Strait of Hormuz opens up, will there be improvements? Or have you -- or do you expect to see structural changes? And ultimately, will this just be passed on to customers? Or will there be a temporary risk to your margins?

Kenneth Seitz: Yes. Thanks, Ben. The reality for our upstream business is that these are highly commoditized competitive markets. And so as we look at moving products around the world and increased freight prices, which is true, that plays into sort of the commodity space and the industry's cost to serve. At the moment, we would say that certainly for potash and for nitrogen, the increased freight costs are being more than offset by what we're seeing with prices. And again, in potash, that's the fundamentals at work and those were at work prior to any conflict in Middle East. And then for nitrogen, that is clearly a result of what's going on in the Middle East.

So that's more than offsetting the freight cost. Whether it's a structural shift in freight costs, I think it's fair to say we don't know. We're watching that closely, but the questions around any risk premium to product that comes out of the Middle East now and even in post-war environment and insurance costs and crewing ships and all those things. We'll be watching that closely, but I think it's fair to say at this stage, we don't know. Maybe I'll pass it over to Mark. We are -- Ben, we are watching our own fuel costs closely and freight and shipping costs closely in order to make sure that we're managing that to the best of our ability.

But Mark, maybe you want to say a few things about that.

Mark Thompson: Yes. Thanks, Ken. I don't have a lot to add. I think Ken really nailed it at the beginning of the conflict as it relates to our own fuel consumption in the business, as we mentioned this morning in retail. We've been really looking at finding efficiencies, optimizing and offsetting those cost increases where we're seeing them, and we think we're doing a good job of that. And as we mentioned, it really hasn't affected our view of the business as we're still very constructive on our retail outlook and have maintained our guidance at midpoint, as Ken said. And then on the potash side, Ken also framed it very well. It's really the supply-demand fundamentals that are at work.

And we've seen a slowly firming price prior to the conflict, and that's continued. And so while we've seen some marginal increases internationally, primarily in the cost to serve, we think those are being more than offset by the recent strengthening in prices we've seen as a result of tight supply-demand fundamentals in international markets. And so at this point, we feel like it's really the market forces at play. And as Ken said, we can't really look beyond the conflict to what will happen. But at this point, we see positive signs for the business.

Operator: Your next question comes from Chris Parkinson from Wolfe Research.

Christopher Parkinson: I just want to get back to the global potash markets. When you take a step back and you look at whether it's Latin American all season, it seems like things are doing better than expected. Southeast Asia, I thought you initially thought it could be down. It seems like it could actually be flat to up. The United States had a little bit of delayed reaction, but products are moving. Is there any reason to believe that would be below the midpoint of your guidance? Is there potential upside? I'd love to hear your perspectives on that, especially given Canpotex is sold out through the end of the second quarter.

Kenneth Seitz: Yes, Chris, I think you characterized it quite well. If you look market to market, we are seeing strong shipments, and we're seeing low inventories, which means that product is going to ground. And if we look at the markets where we had anticipated growth this year, markets like Latin America, like India, like China and even a little bit in North America, we see that coming -- happening. It's playing out that way. And so it does give us confidence in that 74 million to 77 million tonne range. I will say that when -- we believe when you get to the higher end of that range, we start to see operating rates and global logistics being tested.

You sort of start to hit a ceiling here. So you get to that upper end, it could be that the constraint then becomes operating rates and logistics. In the meantime, yes, Southeast Asia is strong. They had built some inventory last year. So we had sort of flat from last year. But to your point, palm oil is MYR 4,000 per tonne. There's palm plantations are doing well. And then we have $390 per metric tonne for standard grade in that part of the world. So we've seen some strengthening there. And again, it's the most affordable of the crop nutrients. So Chris, that has given us the confidence to maintain our 74 million to 77 million tonnes.

Last year, it was 74.5 million. Do we think it's going to be more than last year? Things appear to be playing out that way.

Operator: Your next question comes from Steve Hansen from Raymond James.

Steven Hansen: I just want to follow up on the prior question, actually. And just in the event that the sales prospects do improve through the year, how do you feel about your ability to flex at the operational level, just considering all parts of the value chain and the actual operations themselves, the logistics of the West Coast, et cetera. I mean, how do you feel about the ability to flex up if the demand warrants?

Kenneth Seitz: Yes. Thanks for the question, Steve. We feel good. We feel good about our ability to produce. And we've guided this year, 14.1 million to 14.8 million. We've talked about sort of the 15 million tonne operating capacity. But of course, given our warehousing and volume of product that sits under roofs all over the continent, I mean we have the ability to flex inventory as well. We have our turnaround schedule in our potash business laid out. We always have a little opportunity perhaps to flex that as well. So we have some tools in the toolbox that we can flex and meet the needs of our customers.

So when we think about that top end of 77 million tonnes, for example, and the role that we would play in that, which sort of reflects the top end of our own guidance, we feel confident.

Operator: Your next question comes from Duffy Fischer from Goldman Sachs.

Patrick Fischer: Question just around 2 of your strategic reviews. So your phosphate business in Trinidad, the events in the Middle East, obviously, are making the pie in Trinidad a lot bigger, whether that's to split that and share that with the government or to offload that asset to somebody else. Is that helping the process there, do you think? Is it demonstrable enough that it moves the needle? And same question for phosphate. I mean, obviously, it's a little bit more mixed there. You've limited global supply of phosphate with what's happening in the Middle East, but you've hurt the cost position on sulfur.

So the Middle East stuff changed either the direction of either those 2 strategic reviews in your mind?

Kenneth Seitz: Yes. Thanks for the question, Duffy. I would say that first of all, we're in the market with both of those portfolio reviews. And so we'll see. We are testing the market as we speak. With respect to Trinidad, I think the question becomes, is there confidence around developing additional gas in the region in light of what's going on in the Middle East, of course, some of the major E&P companies are having that discussion. Does that give someone who might be interested in acquiring the asset more confidence? It could, but that remains to be seen as we test the market. It's the same story in phosphate. We're out -- we're testing the market remains to be seen.

We know that in this -- given the current environment, something has to change. It's an unsustainable environment for the phosphate business. And so we'll be watching that closely. In the meantime, we have significant interest in our phosphate assets that we saw that immediately after we talked about testing a sales process, and that interest has remained ever since. So yes, we'll see what happens and its early days in those discussions. We'll see what happens. But given the interest in our phosphate assets, given the potential for gas development in and around Trinidad, we'll be working hard on maximizing the value of those assets.

Operator: Your next question comes from Jeff Zekauskas from JPMorgan.

Jeffrey Zekauskas: Your urea prices moved up very nicely. So when I look at your ammonia prices year-over-year, maybe they're up $60 a tonne. Is there a reason why they're not up more in that the ammonia market has really been pretty strong? I think the movement at some of your competitors has been a little bit higher. Can you talk about your general ammonia values? Is there something constraining? Is there opportunity coming up?

Kenneth Seitz: Yes. Thanks for the question, Jeff. I mean urea, ammonia, ag, industrial, different movement there, but I'll pass it over to Chris Reynolds.

Christopher Reynolds: [ Ben, ] thanks for the question. What we do like about our Nitrogen business is the diversity we have between those finished ag markets and also the industrial markets. And as you know, about 60% of the products we produce in our nitrogen portfolio go towards that ag market and 40% industrial. So we like that. We like, obviously, the cost position we have in North America, given the gas fundamentals. And so we've got good diversity there. In terms of that mix between ammonia, urea, UAN pricing, we're not concerned about that. We have industrial contracts that are linked to the Tampa index. And obviously, that moved up quite significantly recently.

And so again, we feel good about our position in both of those main markets and also our cost position. So no concerns there. And as Mark mentioned in his prepared remarks, I've been really pleased with our operational reliability in nitrogen as well.

Operator: Your next question comes from Ben Theurer from Barclays.

Benjamin Theurer: A lot of ground being covered, but I wanted to get your views as to what potential implications weather phenomenon and being talked about some of things such as El Nino -- super El Nino could have as it relates to the demand, particularly in South America, which tends to be hit hard if something like that were to happen. So what does that do to like your outlook, particularly in retail as we think through the main planting season that is yet to come in South America?

Kenneth Seitz: Great. Thank you, Ben. And yes, as usual, we're looking at the different parts of the world and bread baskets of the world and the markets that we serve and the weather. And it's once again a mixed bag. But maybe I'll hand it over to Jason Newton, our Chief Economist, to talk about sort of our assumptions and what we're seeing.

Jason Newton: Yes, as we look at our -- the markets that we're in, we don't expect to see any major impacts in North America or South America, particularly in the growing season that we're going into now. So no major areas of concern driven by typical trends from El Nino. The areas where you typically see impacts from a weather perspective from El Nino are Southeast Asia, in some cases, India and Australia. But Australia is going into the planting season, much better soil moisture generally than was the case a year ago.

Operator: Your next question comes from Edlain Rodriguez from Mizuho.

Edlain Rodriguez: Ken, a quick one for you. I mean there are concerns out there that as nitrogen prices have surged, like farmers will try to lower the fertilizer basket costs. And typically, this might come at the expense of potash and phosphate in terms of application rates. Like what's your view of that? And is that a risk that you contemplated for the rest of the year or early next year?

Kenneth Seitz: Yes. Thank you, Edlain. What I can say is we are not seeing that across nitrogen and phosphate, the crop nutrients you mentioned. I will say we've seen some of that in phosphate, and we've seen a bit of that here in the spring in phosphate as well. But as it relates to nitrogen and potash, again, we have not seen that. We've seen what we would call an active normal spring thus far into the year. We've had strong grower engagement and the volumes are moving. We have corn acres, we don't speak shifts there. So 94 million to 96 million acres, and that has a certain nitrogen requirement right there.

We look out over the balance of the year and sort of the post-emergent application, we're having -- we're expecting a constructive setup here for the balance of the year. And farmers, again, just looking to maximize yields in this environment, especially in a year after significant crop nutrients were extracted from the soil from this huge corn and soybean crop. So that's what we're seeing, Edlain, and that's how we're kind of thinking about the balance of the year.

Operator: Your next question comes from Mike Sison from Wells Fargo.

Michael Sison: When you think about 2Q and kind of where nitrogen urea prices are setting up, do you sense that these levels are peakish in nature? And then when you think about beyond the conflict and things start to normalize a little bit, do you think that prices because of the damages that potentially are out there and the time it takes to bring it -- to get everything back on that they could stay elevated into maybe potentially next year and beyond? Or how do you see the longer-term impact from the conflict?

Kenneth Seitz: Yes, Mike, thanks for the question. I think I just -- I would go back to what we talked about earlier in terms of the signposts that we're watching for as things, if we can use the word normalize in the region. The reality is, again, these are highly commoditized markets. And frankly, prior to the conflict in the Middle East, markets that were relatively balanced with the exception of phosphate. But if it's in nitrogen, we're talking about relatively balanced. This is a huge supply shock that we're experiencing at the moment. I think there's no question about that, especially in the time of the year when the Northern Hemisphere farmers are getting out and planting their crops.

How this plays out into the future, I think, is related to those signposts. And I think the big one, Mike, to your question is just how much -- perhaps 2 things, just how much infrastructure damage there is in the region. And for a market that was balanced prior to that damage, what does that mean for the tightness of supply and demand? And perhaps two, any risk premium that the world might place for the time being on shipping out of that region? And what does that mean for freight costs, insurance costs, all those things or even geographic diversification to the extent that, that's possible among the customer base.

So I think to your question, we would say duration, we don't know as this plays out and could be uneven in terms of opening of the Strait of Hormuz, normalization of production and then ultimately repair of infrastructure. But to your point, could we see an elevated price environment into 2027, that's certainly one of the possibilities.

Operator: Your next question comes from Lucas Beaumont from UBS.

Lucas Beaumont: So I just wanted to talk about Retail. So I guess, both for yourselves and for the industry more broadly there. So as we kind of come out of the season here, I mean, are you anticipating challenges, I guess, in refilling inventory into the channel, I guess, for the industry and for growers given just where the pricing dynamics are currently on nitrogen and phosphates. So I guess with growers kind of potentially expecting that prices are high and then they may come down as we sort of go through the year, it seems like, I guess, the incentive to sort of purchase and refill in the near term is going to be depressed.

And then I just wanted to just kind of get your view on how you see that flowing back into the wholesale market on the nitrogen side. Is that going to create a large kind of demand air pocket as we sort of move into the middle part of the year that we should think consider as well?

Kenneth Seitz: Thanks, Lucas. I'll say, coming into the season, of course, we had purchased all of the product that we needed for our grower customers right through the channel. And so from an inventory perspective, we were well set up for the spring planting season. As we come through the spring planting season, again, we turn back to Nutrien that reaches right through that value chain. So our upstream business producing potash and our Nitrogen business, which North American plants and servicing North American customers reaching right through on to farms in North America and how it is we think about refilling the channel, we have a lot of confidence.

But Chris, maybe you want to say a few more words about that.

Christopher Reynolds: Yes. Lucas, thanks for the question. As Ken alluded to, you think about the infrastructure we have from a distribution point of view. And we're expecting not just our own distribution from a retail point of view, but that of our wholesale customers as well to be very empty as we come towards the end of the spring. And so we're not concerned about containment or things backing up. There's going to be room to put that product even if there is a little hesitancy to start filling immediately after the spring season.

But I think like everyone, like we've talked about on this call, a lot is going to depend on the length of the conflict in the Middle East, when does the Strait fully reopen, get a better understanding of those production facilities and that supply of product. And I think the industry as a whole is going to be watching that and then making those purchasing decisions based on that. But we feel very confident in terms of our production, our capability, but then more importantly, our distribution network that can be ready to be deployed even if, as I said, there's a little hesitancy at the start of that summer fill period.

Operator: Your next question comes from Mazahir Mammadli from Rothschild & Co Redburn.

Mazahir Mammadli: I just have one question on the Nitrogen segment. So I appreciate you've communicated that the nitrogen -- the Trinidad operations have been shut down and the gas supply agreement has expired. I'm just curious, is there a scenario where perhaps Nutrien strikes an agreement with the Trinidad government, perhaps in coordination with U.S. or Canada government to temporarily at least restart production because those volumes are kind of desperately needed in the market. I'd be curious to hear your opinion.

Kenneth Seitz: Yes. Thank you, Mazahir. What I'd say is we are in the market in a sales process at the moment. And in the meantime, gas availability and gas pricing continues to be a challenge in Trinidad. Some port fees that are being charged to us that remain -- continue to be a challenge and the access to the port associated with those sort of back fees continue to be a challenge. And we have conducted a safe shutdown of the facility and like I say, in the market now and through a sales process.

So that's our focus at the moment is engage with prospective buyers in the region or otherwise to see what the value of those assets would be.

Operator: Your next question comes from Laurence Alexander from Jefferies.

Laurence Alexander: You alluded to the impact of higher sulfur costs and sulfuric acid. Could you break out kind of what your sensitivity is there? And more importantly, could you dig into how you think the industry could handle or adapt to the Strait of Hormuz being closed for longer? We've talked with other companies with exposure to sulfur, everyone seems to have the view that the fertilizer complex is the one that's going to adjust. And curious, how you think that such an adjustment might happen?

Kenneth Seitz: Yes. Thanks, Laurence. Just in terms of specific sensitivity to sulfur costs, it does take -- and then I'll hand it over to Mark to talk more broadly about some of the potential adjustments that you cited. It's kind of a 1:1 ratio sulfur to a tonne of P205. So when you do the math, and this is just a general sensitivity kind of rule of thumb, there's a $25 increase in sulfur costs. It's about a $35 million reduction -- earnings reduction for our phosphate business. So $25 increase, up $35 million down. But Mark, do you want to maybe talk a little bit about the second part of Laurence's question?

Mark Thompson: Sure. Thanks, Ken. Laurence, I think Ken answered your direct question in terms of how the sensitivity feels within the Nutrien phosphate business. I think more generally, we just reiterate the comments from an overall industry perspective that when we look at our business and we look at what's happened with the conflict in the Middle East, the reality is that ammonia and sulfur benchmark prices or input costs have risen more than finished phosphate pricing since the beginning of the conflict. Hence, our comment in our prepared remarks that ultimately, we believe that as we enter the second quarter, we're going to see elevated pressure on phosphate margins.

As Ken also alluded to in a prior question, we don't see the situation as sustainable. And ultimately, we don't believe that this can be sustained for a long period of time. But in the near term, that is the challenge, and Ken laid out the financial sensitivity.

On your second question about the fertilizer complex adjusting or adopting to a new reality around the Strait of Hormuz closure, I think when you go back to the comments that Ken has made earlier in the call, the reality is the world is just so dependent on fertilizer and inputs for fertilizer, including sulfur and energy and raw materials coming from the Middle East that there's no easy adjustment to what we've seen here. Given the sheer volume across nitrogen products, phosphate products and energy that we have exiting the region, it really is on that time horizon that Ken has laid out. Even with the reopening of the strait, that could take some period of time to normalize.

But in the absence of that, we expect that you'll continue to see very tight supply-demand fundamentals for nitrogen and phosphate.

Operator: There are no further questions at this time. I will now turn the call back over to Jeff Holzman.

Jeff Holzman: Thank you for joining us today. The Investor Relations team is available if you have follow-up questions. Have a great day.

Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.