Greetings and welcome to Nutrien's 2024 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Jeff Holzman, VP of Investor Relations.

Thank you, operator. Good morning and welcome to Nutrien's third quarter of 2024 earnings call. As we conduct this call, various statements that we make about future expectations, plans, and prospects contain forward-looking information. Certain assumptions were applied in making these conclusions and forecasts. Therefore, actual results could differ materially from those contained in our forward-looking information. Additional information about these factors and assumptions are contained in our quarterly report to shareholders, as well as our most recent annual report, MD&A, and annual information form. I will now turn the call over to Ken Seitz, Nutrien's President and CEO, and Mark Thompson, our CFO, for opening comments.

Good morning and thank you for joining us today to review our third quarter results, the progress on our strategic priorities, and the outlook for our business. At our Investor Day in June, we outlined a set of 2026 performance targets that provide a pathway for driving structural improvements to our earnings and cash flow through the cycle. As highlighted in our third quarter release, we have made significant progress on a number of these priorities in 2024. This includes accelerating the timeline for achieving $200 million in annual operational efficiency and cost savings. We now expect to achieve this target by 2025, one year earlier than our initial goal, with cost reductions evenly split between retail and corporate. Nutrien is in a unique position to expand production and sales of potash and nitrogen with limited capital expenditures. We set a 2026 target to increase upstream sales volumes by 2 to 3 million tons compared to 2023 levels, and through the first nine months of 2024, we have increased sales volumes by 1.3 million tons. In our downstream retail business, we have faced some headwinds associated with a more prolonged recovery in Brazil and softening in North American ag commodity prices. However, we remain confident in the growth platforms that support our 2026 retail financial targets, which include an expansion of our proprietary products business, network optimization, tuck-in acquisitions, and the execution of our improvement plan in Brazil. Through a focus and disciplined approach to executing our capital projects, we expect to further optimize capital expenditures in 2025 to a range of $2 billion to $2.1 billion. This total includes the capital required to maintain our world-class asset base and meet our growth objectives. We will continue to pursue each of these performance targets with a focus on how we can enhance our offering of products and services to the grower, all while structurally growing our earnings and free cash flow. Now, turning specifically to our 2024 results. Nutrien generated adjusted EBITDA of $4.3 billion through the first nine months of 2024, supported by increased downstream retail earnings, higher upstream fertilizer volumes, and lower operating costs. Retail adjusted EBITDA totaled $1.4 billion in the first nine months, up 10% from the prior year. North American crop nutrient margins increased by $17 per tonne compared to 2023, supported by a stabilization of fertilizer markets and continued growth of our proprietary crop nutrient and biostimulant product lines. The improvement in per tonne margins was partially offset by lower North American crop nutrient sales volumes, which were impacted by wet weather in May, lower corn acres, and reduced field activity in the third quarter. Crop protection margins in North America have improved in 2024, while seed margins were lower, primarily due to the impact of dry weather and delayed planting on our proprietary seed business in Brazil. We ended the third quarter with crop protection inventory down 13% compared to the prior year, as we focus on tightly managing working capital levels. Turning to potash, we generated adjusted EBITDA of $1.6 billion in the first nine months, down from the prior year due to lower benchmark prices. We increased potash production across our six mine network and lowered our controllable cash cost of production to $52 per tonne over this period. The reduction in per tonne costs was primarily driven by higher production volumes and the benefits of mine automation investments. We sold record potash volumes in response to increased demand from our customers. We achieved this performance despite a short-term disruption in Canadian rail service during the third quarter, highlighting the advantages of our industry-leading supply chain and effective planning by our commercial teams. In nitrogen, we delivered adjusted EBITDA of $1.4 billion in the first nine months, down from the prior year, as the benefit of lower natural gas costs was more than offset by lower nitrogen prices in the first half of 2024. Our North American nitrogen assets remained very well positioned on global cost curve, and we continue to progress reliability initiatives that have contributed to higher production volumes in 2024. Nitrogen selling prices in the third quarter increased compared to the prior year, reflecting tight global supply, in particular for ammonia. Phosphate fertilizer benchmark prices have remained strong, contributing to higher net selling prices in the third quarter compared to the prior year. Weather-related events impacted our phosphate operating rates, resulting in lower sales volumes and incremental costs. Now turning to the market outlook for the remainder of 2024. We have seen a good start to the fall application season in North America, with crop nutrient sales in October above the historically strong levels achieved in the same month of 2023. The increase in demand has been driven by a relatively early harvest and the significant need to replenish soil nutrients following this year's record harvest. Global grain stocks remain below historical average levels, supporting export demand for North American crops and firm prices for key agricultural commodities such as rice, sugar, and palm oil. Global potash consumption is projected at a record level in 2024, supported by strong agronomic need and relative affordability. We have raised our full-year global shipment forecast to a range of 70 to 72 million tons and expect continued growth in 2025. We anticipate limited new global capacity additions next year, creating the potential for incremental supply tightness compared to 2024. Global nitrogen markets have remained firm in the fourth quarter due to continued Chinese urea export restrictions, ammonia supply outages, and project delays. U.S. nitrogen inventories are estimated to be well below historical average levels, which we expect will support strong demand for the fall season and into 2025. I will now turn it over to Mark to provide more details on our full-year 2024 guidance assumptions and our capital allocation plans.

Thanks, Ken. Good morning, everyone. As Ken highlighted, Nutrien delivered record potash volumes through the first nine months of 2024, and we've raised our annual potash sales volume guidance to 13.5 to 13.9 million tons. The range reflects our scheduled maintenance downtime in the fourth quarter and the assumption of a relatively short-duration labor disruption at the Port of Vancouver that's currently impacting Capitec shipments through the Neptune terminal. For the full year, we expect our potash controllable cash cost of production to be down approximately 5% compared to 2023, strengthening our position as one of the world's lowest cost producers. In Nitrogen, we revised our annual sales volume guidance to 10.6 million to 10.8 million tonnes. The range reflects the impact of extended turnarounds and unplanned outages in the third quarter including the impact of weather-related events. We expect higher operating rates in the fourth quarter with turnarounds at select North American nitrogen sites now complete. For retail, our full year adjusted EBITDA guidance was revised to $1.5 billion to $1.6 billion as favorable growing conditions in North America reduced pest pressure and limited field activity in the third quarter. Grower demand increased in October, and we expect North American crop nutrient sales in the fourth quarter to be similar to the historically strong levels achieved in 2023. As Ken outlined, we're focused on strategic priorities that support the achievement of our 2026 performance targets, which we believe provide a pathway for enhancing earnings and free cash flow. Looking ahead, we see several levers available to optimize sources and uses of cash across Nutrien. From a sources standpoint, Ken described the areas we've identified to drive increased cash flow from operations. This includes increasing upstream fertilizer volumes from existing assets, delivering downstream retail earnings growth and driving operational efficiencies and cost savings across our network to ensure we maintain a low cost position. We continue to evaluate ways to simplify and focus our portfolio, optimizing our investments in working capital and reviewing assets on our balance sheet that may not warrant maintaining with the objective of improving cash flow conversion through the cycle. In terms of uses of cash, we are allocating $2.2 billion to $2.3 billion in 2024 to sustain and enhance our assets, a reduction of over $400 million compared to 2023. We expect to further optimize CapEx in 2025 to a range of $2 billion to $2.1 billion, strengthening free cash flow and positioning the company to counter cyclically deploy capital towards high conviction opportunities. We have a long track record of providing a stable and growing dividend as a core part of the return we deliver to our shareholders. Our dividend per share has increased by 35% since the beginning of 2018, while maintaining a total dividend payment of around $1 billion due to the significant reduction in share count over this time period. The allocation of our remaining free cash flow is currently focused on a narrow set of growth investments and on share repurchases with the goal of maximizing our risk-adjusted returns and growing free cash flow per share. From a growth standpoint, we are focused on projects that have a strong fit with our strategy, provide returns in excess of our hurdle rates and have a relatively low degree of execution risk. These are growth platforms where we've proven our ability to execute and deliver value. Today, this includes investments in proprietary products, network optimization, tuck-in acquisitions, nitrogen debottleneck projects and mine automation and projects. We've also repurchased 1.5 million shares for approximately $75 million since late September and intend on repurchasing shares on a more ratable basis under our NCIB program that's authorized through February 2025. I'll now turn it back to Ken for closing remarks.

Thanks, Mark. We remain focused on strategic priorities and strengthen the advantages of our business across the ag value chain. Our results through the first nine months of 2024 demonstrate progress towards our 2026 targets on a number of these priority areas. This includes accelerating the timeframe for delivering operational efficiency and cost savings, optimizing capital expenditures, expanding upstream fertilizer sales volumes and advancing high-return downstream retail growth opportunities. As Mark highlighted, we are focused on allocating capital on a counter-cyclical basis towards a targeted set of growth initiatives and share repurchases that enhance free cash flow per share. We would now be happy to take your questions.

The first question comes from Andrew Wong of RBC Capital Markets. Your line is now open.

Good morning. Thanks for taking my question. I was just wondering if you could provide any update on how you plan on implementing a buyback program going forward with maybe more regular, systemic, or dramatic type repurchases? And just given where your shares trade today, how would you view buybacks versus any FX spending on growth?

Thanks, Andrew. We can discuss what we mean by ratable. We repurchased stock this year and plan to continue doing so for the remainder of the year. As we look ahead to 2025, we've been referring to our approach as countercyclical. We've scaled back our capital investments and are now focused on optimizing our capital portfolio and other measures to increase free cash flow. Currently, we are prioritizing strategies that will enhance free cash flow per share growth. Yes, we are buying back our stock, and we conduct thorough analysis on this. Mark, perhaps you can share more details on our plans and the reason we use the term ratable.

Yes, absolutely. Thanks, Ken. Andrew, so look, I think just to step back and reiterate a bit of what Ken said, I mean, our capital allocation priorities, they're going to continue to follow the strategic direction of simplifying and focusing the organization and really exercising the discipline in both cost and capital management. And these are things that we control regardless of market conditions. So this intensified focus on both optimizing sources of cash and uses of cash with the objective of growing free cash flow per share is something that is really top of mind for us. With respect to your question on share repurchases specifically, I think just to highlight and recap, we commenced share repurchases in the second half of September. And if you look at that time period, we've purchased about $75 million worth of stock over the last 1.5 months. And as we said, we intend to continue ratable repurchase activity at a general similar run rate to what we've done so far through the end of that authorization in February 2025. I think as Ken highlighted, we sit here today and that set of growth objectives that we have has been narrowed. They're focused. They are things we've done before. A number of them are accretive to free cash flow. But the reason we've continued to make progress on the buyback here over the last couple of months and intend to continue doing so is we see compelling value, not only from a risk-reward standpoint, but the ability to grow free cash flow per share independent of market conditions. As we look at alternatives at this point in the cycle, obviously, agricultural commodities have turned down somewhat over the last few months. And if we look to past cycles, particularly in the retail business that has presented us with opportunities at weaker points in the commodity cycle where we can continue to consolidate in those market conditions. We've been quite disciplined over the last couple of years in stronger market conditions, but we anticipate some of those tuck-in acquisitions, particularly in North America, will come back to us. So we'll be looking to those alternatives opposite share buyback. But today, the buyback is compelling to us.

The next question comes from Ben Isaacson from Scotia Capital. Your line is now open.

Good morning. And thank you for taking my questions. I just have one question on potash. It's quite rare that we see three years of consecutive growth in potash demand, especially following a year of record global shipments. In light of your comments about softening field activity as crop prices are low, can you talk about your confidence level that potash demand will grow next year in line with your new forecast? Thank you.

Thank you, Ben. For 2024, potash volumes have been strong, and we've adjusted our local shipments range to 70 million to 72 million tonnes. There are several reasons we are optimistic about 2025. Looking at global inventories, they are at average or below average levels in nearly every major market worldwide, except possibly Brazil. Even in Brazil, demand for crop nutrients is returning to record levels, with NPK expected to be around 46 million tons, similar to past records. China is also consuming record amounts of NPK, evident in potash, nitrogen, and phosphate. While we have seen a significant drop in North America, and agricultural commodity prices have decreased, this has resulted in a strong profit pullout from the ground, meaning those nutrients need to be replaced. This fall, we've experienced an early harvest, and there is considerable activity during the fall application season as farmers prepare for what has been a strong growing season. North American farm margins are about their 10-year average, and lower input prices have driven demand. We are still seeing a return to trend level demand in potash, moving back to what we consider trend levels post the Eastern European conflict and its impacts. Thus, we now have a range for next year of 71 million to 74 million tonnes, aiming to return to that trend level demand growth. Chris, do you have anything to add?

Yes. Thanks, Ken. The only thing maybe to reiterate is that as we look around the world on these major potash markets, we're not really seeing any inventory build that's concerning to us. And as we talk to customers in each of those markets, they're also optimistic about demand for 2025, particularly as Ken said, that these prices remaining at affordable levels. And even if we were to see, for example, in China, inventories grow around 3 million tonnes, you put that into the context of apparent consumption at around 18 million to 19 million tonnes. And again, we don't see that concerning. So we do see the good consumption levels that we've seen in 2024 continuing into 2025.

Your next question comes from Joel Jackson from BMO Capital Markets.

I'm going to follow up on the potash question with a couple of many questions, if you don't mind. I don't think you mentioned Southeast Asia oil palm. It seems like palm oil prices are really, really doing well. It looks like in a recent tender this week in Southeast Asia. It looks like you got maybe a little bit higher price, but not massively higher. So first question there is why should we not see some greater pricing there, the palm oil? Also I didn't mention on some of the drivers for '25? And then second question would be when you look at supply for ‘25, what more supply do you see coming on? Are you anticipating more supply from Laos? Are you anticipating more tonnes to get through St. Petersburg and Bronco from Belarus? Any other supply driver? Thanks.

Thanks, Joel. That's a couple of great observations. Thank you. Yes, I would say with respect to Southeast Asia, we haven't mentioned it yet, but you're absolutely right. In fact, for 2024, part of the rebound to trend level demand that we just talked about. Part of that story is here to Southeast Asia. And it's for the reasons that you said, affordability is strong. When we see palm oil prices at 4,000 per ton, but there's also strong rice prices in the region that we expect strong demand. And for an important standard grade market, like I say, that's certainly part of the story for 2024. And if you look at the biodiesel mandate that's coming in 2025. And again, with strong prices, we expect that Southeast Asia for 2025 will continue to be an important part of the story. On the supply and demand balance, I think you make a good observation as well. When we talk about 2024, we call it more or less a balanced market, 70 million to 72 million tonnes and supply more or less meeting demand. As those volumes grow, as consumption demand grows into 2025 and for all the reasons we've talked about. We think that will, we do see some potential tightening in the market. And that's because, as you say, if we look around, there could be some small incremental additions on the supply side, but we don't see much. And so when we've said that there's the potential for some firming in 2025. The reason we say that is exactly that. We expect growth without incremental supply necessarily being added to meet that incremental demand.

Your next question is from Vincent Andrews from Morgan Stanley. Your line is now open.

Thank you and good morning, everyone. Regarding nitrogen, one of your slides indicates that product inventory levels are low as we approach the fall season. I'm curious about your expectations for the retail business. Are you planning to build inventory and hold it through the winter, or do you intend to finish the fall season with minimal stock?

Yes. I can say that what we're observing in our retail businesses is quite normal, and we anticipate managing inventory flow through our channels as we progress through the season. Jeff, would you like to share what you're experiencing on the ground?

Yes. So first of all, I mean, we're seeing we're greatly encouraged by the activity we're seeing this fall. As Ken mentioned earlier, we've had very strong nutrient renewal with really large crops, particularly in North America. From an inventory position, we like the position we're in. Right now, we came into the third quarter a little heavier than we would have been last year, but that's reflective of an early harvest and an early start to fall application. And as it relates to nitrogen, we desperately needed some moisture across the corn belt. We got that area last week, and so we're really encouraged by what we're kicking off across North America from an NH3 application standpoint. But normally, it's to buy what we need for the season ahead and not carry over into the year. And so I would like from a retail perspective to end the fall with low inventory levels.

Our next question comes from Steve Byrne, Bank of America Merrill Lynch. Your line is now open.

Thank you, Ken. I wanted to discuss potash pricing a bit more. You're anticipating a couple of percent increase in volumes for 2025. However, your offshore price is currently nearly $100 a tonne lower than the North American price, which used to be about 30% difference. Even Lukashenko has expressed concerns about potash pricing. Given your current role and your previous experience with Canpotex, what is the value for Nutrien in being part of Canpotex? Since you have only one partner and the HP can’t join, would you approach negotiations differently if you were independent and not part of Canpotex?

Thank you for the question, Steve. We have a significant impact to discuss. To start, tomorrow marks Nutrien's 65th anniversary of potash production in Saskatchewan, a milestone we are proud of. For 55 of those years, we have partnered with Canpotex, which has built a strong customer base in critical markets that would be hard to replicate, thanks to our long-standing relationships. Customers benefit from accessing high-quality, reliable, and competitive products from our Saskatchewan mines. These relationships remain vital for us and Canpotex. We have also developed a unique supply chain that transports our products from Saskatchewan to markets like Malaysia, an infrastructure that can't be found elsewhere. This extensive network and history of successful commerce with our customers have made Canpotex an invaluable partner, helping us expand into over 40 countries worldwide while maintaining our competitive edge. Looking ahead, we've noted some trade imbalances due to geopolitical conflicts, which have affected markets in Eastern Europe and possibly the Middle East. Markets like Brazil are currently more accessible for global producers, resulting in shifts in volume and pricing dynamics. As these trade flows stabilize and we anticipate a balanced supply-demand situation in 2024, with potential strengthening in 2025, Canpotex's role will be crucial. We foresee growing demand potentially outpacing supply in 2025 and beyond, which may lead to further pricing firming. Canpotex will undoubtedly continue to play a significant role in distributing our volumes globally.

Your next question comes from Jacob Bout from CIBC World Markets. Your line is now open.

Good morning. Question on retail. Second quarter here, you trended your ‘24 retail guidance despite a pretty large comp coming off in the U.S. Curious, what would your view of normalized retail EBITDA be in a $4 corn price environment?

Good morning, Jacob, and we have a number of things that we talk about at the moment that a few headwinds in our downstream business and in North America would be, as we've talked about our wet May, as we've talked about the ideal growing conditions here in the third quarter that led to less pest pressure and less overall field activity. That's true. But I would say the bigger story is Brazil and the ongoing work that we're doing to recover both with the market and certainly with our business in Brazil. But I'll hand it over to Jeff to provide some color around all of that.

Yes. Thanks. And look, our guide down in the third quarter was more a reflection of what occurred in the third quarter than what we expect going forward in the fourth quarter. As Ken mentioned just a minute ago, regardless of the corn price. Brazil has been a headwind again this year. We expect more recovery there in that market than we've seen year-to-date. North America and Australia have performed really well, in my opinion, in '24. And so we expect earnings growth next year just by stabilizing things in Brazil. Going forward, we expect earnings growth that we've talked quite a bit at Investor Day about our strategic actions around the LPI and how we want to expand our margins in that area as well. And I also think that we had some things that we missed this year. We talked about low field activity in the third quarter. Some of that's related to some applications that we actually missed in the spring with a cold and delay planning for corn. And we think those things will come back to us. We thought we'd get a bit more of it in the third quarter, but our ideal weather conditions really led to extremely little pest pressure at low trips across the field for our growers. And so we think those things will come back to us next year.

Your next question comes from Edlain Rodriguez from Mizuho Securities. Your line is now open.

Good morning, everyone. Just one quick question on retail in Brazil. I mean the former there should be heard in a little bit. There's like a lot of disruption in the marketplace in terms of people going bankrupt, does that create medium-term or long-term opportunities for you in terms of retail acquisitions, given that it's a long-term attractive market over there?

Thank you for the question, Edlain. Our current focus in Brazil is on stabilizing our core business. We are concentrating on rationalizing some unproductive infrastructure, such as lenders and some selling locations. Additionally, we are optimizing our cost structure in terms of human resources due to the challenges we are facing in Brazil. We are also focusing on inventory management and reducing working capital levels. All of these initiatives are currently underway and require a significant amount of effort. We plan to continue addressing these issues through 2025. Alongside this, we will maintain our focus on proprietary products and growing our proprietary business, which is vital for our future, particularly in the agrochemical sector. To summarize, we are not considering expansion in this environment; instead, we are dedicated to our existing business operations.

Your next question comes from Richard Garchitorena from Wells Fargo. Your line is now open.

Hi, good morning everybody. So my question is another strong quarter of potash sales volume this quarter. Despite a short rail strike. You raised the guidance this year to 13.5 million to 13.9 million. But obviously, the third quarter run rate would imply over 16 million potential annualized production. So that's well above the 14 million to 15 million target that you gave for 2023 on your Investor Day. So my question is, are you currently at that operational capability rate at this time to get to that 14 million to 15 million? Could you produce that if the market demand was there for it? You mentioned that you expect demand growing in 2025 for potash and don't really see many other supply coming on in other regions. So would you be the one company that could potentially meet that demand?

I'll start with your last question first and then go back from there, Richard. Yes, we can meet the growing demand. We've discussed our capacity to produce 15 million tons, and what we need to do now is bring in people to optimize operations. If you look at our current guidance range, it's designed to align with our six-mine network's capacity and operator complement; we don't want excess staff at our operations. To reach 5 million tonnes, we will need to hire additional personnel. On any given day or month, we might produce above the 15 million tonne annualized rate, but when you annualize those figures, they don't accurately reflect our yearly capabilities; they are influenced by specific conditions at each mine and how maintenance schedules align. There are times when we perform exceptionally well, but we will also experience days with lower output due to unexpected conditions, which may result in run rates below our 14 million ton capacity. It's essential not to base conclusions on individual days or months. What we see right now is our capacity has been built to satisfy the needs of our global customers, maintaining a market share of about 19% to 20%. We can certainly increase our volumes to reach 15 million tonnes with the right personnel and equipment.

Your next question comes from Chris Parkinson of Wolfe Research. Your line is now open.

Great. Just a quick question on your perspective on nitrogen supply dynamics. Just when you take a step back, I mean, there's 1 school of thought that's concerned by oversupply just given the number of MOUs and kind of project concepts, I'll call them things out of Russia, which I personally think is wrong, but it is what it is. And then the other school of thought is looking at higher costs, a lot of maintenance bills coming out in Europe, CBAM in Europe, and potential further rationalization. So as you sit here today, even versus a couple of quarters ago, kind of what are your core puts and takes in terms of how you're thinking about that business over the next, let's say, three to five years? Thank you.

Yes, great question, Chris, and I'll say a couple of things and pass it over to Chris Reynolds. But if it's on the clean ammonia side of the industry and the number of announcements that we've seen on prognosticated new plant. As we've looked at those announcements, if we look at the evolution of the potential there and our own experiences with looking at clean ammonia, we would say that we don't see speculative new plants being built being green led and right now, it's a question about really the pacing of the energy transition and how you would then in behind that pace, the clean ammonia complex and what kind of risk you'd be willing to take in a market where you might be able to grab a premium on the energy side of the business. That's still evolving and timing of all of that is still very unclear. So again, do we expect any new plant to be backed by some form of offtake or some form of bankable contract that gives you the confidence to delay the capital? Indeed, it seems to be playing out that way. If we look at the industry and the nitrogen complexes today across the various nitrogen products, we don't see a lot of new plant built that's been deployed, especially on some of the downstream products. But Chris, maybe you want to provide a little bit more color on the sort of supply-demand balance in nitrogen how you see that evolving?

Yes. Thanks, Ken. Good morning, Chris. As Ken mentioned, if we analyze supply and demand along with the market outlook for the next couple of years, it’s encouraging to see a global demand trend showing a 2% compound annual growth rate. This trend has been fairly consistent over the years. Specifically, in China, urea consumption has increased by 14% year-over-year, reaching an apparent consumption of 60 million tonnes. The Chinese government is focused on boosting domestic agricultural production. Similarly, we are seeing steady demand growth in Brazil and India. On the supply side, we are monitoring the situation in Europe concerning natural gas prices. The last couple of winters in Europe have been mild, but if a harsh winter occurs, gas inventories could be quickly depleted, leading to rising prices. We’ve also observed production cuts in response to these conditions. As Ken mentioned, delays in new production start-ups have contributed to the current balance in the market. Additionally, our position in North America, with low-cost gas in both the U.S. and Canada, and the strategic locations of our plants, especially inland in the U.S., gives us an advantage. Overall, as we look ahead over the next three to five years, we're optimistic about the market.

Your next question comes from Benjamin Theurer from Barclays Capital, Inc. Your line is now open.

This is Rahi filling in for Ben from Barclays. My question was kind of on geopolitical issues. Any updates on how it's impacting fertilizer shipments? Is it still just a hit towards like shipment costs? Or are there any quantity of volumes impacted? And how is the update on Red Sea shipment process just kind of on an overall fertilizer market view?

Yes, no, a lot going on in the world, obviously, and some geopolitical events that are impacting our business. If we look at the war in Eastern Europe, what we would say and have talked about is the fact that those volumes, for the most part, are getting to content flows of those export volumes. It's probably all true with the exception perhaps of the Belarusians who continue to struggle getting access to port capacity in a cost-effective way. It's absolutely the case that those suppliers and particularly Belarus probably struggling with cost to serve as well as they send shipments via rail across Russia into the north of China, where we know that on a landed basis, that's probably putting all-in costs for the Belarusian at $270, $280 a tonne. So those are definitely challenges in light of this conflict in Eastern Europe. But some of those challenges are going to persist for a bit yet. But as those volumes find their way into the market, some rebalancing trade flows that we've talked about that really were obviously finding a home for our volumes with our customers as well. And that has been the case right through all of this turmoil. On the Red Sea, I think it's fair to say that our colleagues at ICL and APL have found alternative routes. And so the challenges through the Red Sea that ICL has experienced from a continuous experience that they found alternative growth through the Mediterranean. So we're seeing ICL volumes come into the market as well, which is good. And those trade flows relatively balanced as well. But those we'll continue to watch these things very, very closely because as you say, it had impacts on trade flows. Some respects continues to do certainly has raised the cost to serve for the industry and therefore, the overall cost bases for the industry and as conflicts of all, we'll continue to watch that.

Your next question comes from Joshua Spector from UBS. Your line is now open.

Hi, good morning. Yes, this is Lucas filling in for Josh. So just going back to nitrogen. So you've sort of taken your shipment volumes down a little bit for this year. Obviously, due to some specific facts there. But I was just wondering if you can kind of give us your latest thoughts and frame how you're thinking about the incremental uplift into next year and then the pathway to your 11.5 million to 12 million target in 2026? Thanks.

Yes. No, good. Thanks, Josh. Yes, we've had some weather-related effects this year. We've had some extended turnarounds, power outage that power supplier and our Fort Saskatchewan facility in Alberta was unexpected for us and some mechanical issues. You see, put that all together. And yes, we're just a little bit below where we had expected to be this year. That said, heading into 2025 and beyond. We talked about our 11.5 million tonne at 2026 Investor Day target and 11.5 million with Trinidad operating on natural gas; it would be 12 million tonnes. But I'll hand it over to Trevor Williams to give us the breakdown on where we're going to get those new volumes and how we get from here to there.

Yes, just a couple of thoughts here. If I look back and just compare to 2023, we're approximately 200,000 tons ahead year-over-year versus last year. And then we normalize out over our turnaround, which is a very heavy year this year of almost 300,000. That's on a normalized basis. Obviously, this is a result of some of the improvements that we talked about that we announced last year in order in Trinidad. As Ken alluded to, is on a full year basis this year, we had several externally related outages across the quarter. And in addition to that, a couple of turnarounds that took longer. Now this has been one of our heaviest turnaround years that we've had for quite a while, with 4 major turnarounds executed here in '24 with one wrapping up here in Trinidad here in the last quarter. But as Ken said, as we look forward to our Investor Day target and above, there's really three components there. There's continued reliability improvements across the fleet, there's about 300,000 tonnes in terms of what we look out there. With debottlenecks that will be completed in '23 and while we have scheduled for '24 and '25 as the order of about 300,000 tonnes there as well. And then finally, as Ken mentioned, we have about 500,000 tonnes in terms of what we're doing with respect to Trinidad in terms of gas improvement. But with that, the one thing that we'll call out as an example is that if you look in 2023, we utilized about 82% of our gas that was available to us in 2023. In 2024, we're protected right now, we're going to be between 93% and 94% of the gas available utilized. And that's really the result of our three out of four strategy that we put in place late last year.

Your next question comes from Laurence Alexander from Jefferies. Your line is now open.

This is actually Dan Rizzo on for Laurence. So you achieved your cost-cutting goals early and are expected to be achieved in 2025. Would that suggest that maybe you can kind of expand the goal that there's more that can be done as we push into '26 and '27? I guess that would be my question.

Yes, we have been very focused on our cost structure, and as we mentioned at Investor Day, we identified an opportunity to reduce SG&A by $200 million in both our retail business and corporate functions through 2025 and 2026. We are ahead of schedule in this regard and see potential for further savings as we evaluate our cost base. We are confident about achieving that $200 million reduction and even doing it earlier than expected. We continuously seek opportunities to further optimize our costs to remain a low-cost producer and competitive in our operations.

Your next question comes from Aron Ceccarelli from Berenberg. Your line is now open.

Hi, good morning. Thanks for answering my question. Earlier this week, we heard comments from Belarus' President Lukashenko about a potential combined 10% production cut with Russia. I'm curious how credible you think these comments are, especially since they are low-cost producers and may not need to cut production. My second question is about agricultural retail, specifically regarding seeds. I noticed that your seed sales decreased by 16% in Q3, and the gross margin in dollar terms fell to $4 million. I would like to know if you expect this trend to continue into Q4 or if it was just a one-time occurrence in Q3.

Thanks for the questions. Yes, Belarus, BBC, we saw that announcement as well. We don't speculate on those sorts of things, I think you'd want to talk to them to understand better what the plan is there. All I would say is we've talked about this impact of shifting trade flows and the challenges perhaps in that part of the world are not getting access to efficient and nearby tidewater, and that raising the global cost curve as a result. So the cost of service has gone up that's clear. And probably will continue to be the case as those producers look for port capacity, like I say, that is nearby. So we won't speculate on anything that any prognostications were is coming out of the press in that part of the world, you'd have to talk to them. But what we would say is, yes, we do see that for both in terms of inflationary pressures on the industry has probably added $50 a tonne. And then for certain producers who are having challenges probably could be another $50 a tonne on the cost curve. And then the second question as it relates to retail and seed, I'll pass that over to Mr. Tarsi.

Yes. Thanks, Ken. And yes. So the third quarter is a small quarter for us. We see as it relates to the margin reduction in the third quarter. Latin America is the primary driver was a reduction as it relates to seed margins for quarter 3. This is due to unfavorable weather conditions, which caused production challenges and compressed margins for us in that region, and we do consider that to be a one-time event.

Thank you. There are no further questions at this time. So I will now turn the call back to Jeff Holzman for closing remarks.

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