NUTRIEN LTD earnings calls

Potash outlook for second half

Q (Christopher Parkinson · Wolfe): The analyst asked for the second half outlook for potash, region-by-region views versus January expectations, and whether current order books are comfortable given outages like Uralkali maintenance.

A: They are constructive on potash for the second half and the year. They reaffirm 74 million to 77 million tonnes global shipments and raised their own potash guidance to 14.2 million to 14.8 million tonnes, citing affordability, healthy demand, low starting inventories, and strong commitment into Q3.

"Yes, we are certainly constructive on potash for the second half and for the year." — Kenneth Seitz (CEO)

Regional demand (NA, Brazil, China, SE Asia)

Q (Christopher Reynolds): The analyst wanted region-by-region detail on demand and inventories.

A: North America had a good response to the summer fill and some orders taken after a price increase, with a slim import lineup. Brazil is seasonally quiet in Q3 but prices around $400 and they estimate about 4 million tonnes of buying left; China has port inventories around 3 million to 3.3 million tonnes versus about 20 million tonnes consumption and buyers prioritize supply; Southeast Asia is supported by strong palm oil prices but has El Niño concerns.

Plan to expand potash capacity

Q (Ben Isaacson · Scotiabank): The analyst asked how Nutrien will expand potash capability from around 15 million to 18 million tonnes, the timing, CapEx, and whether they want to keep a 19%–20% market share.

A: They expect to maintain a 19% to 20% market share and can grow with customers. They have a 6-mine low-cost network, automation lowers cash cost per tonne and creates options at 5 of 6 mines, about 15 million tonnes capacity today, a roughly one-year lead time to unlock additional volumes, and estimate the next increment from 15 million to 18 million tonnes costs about $200 to $300 a tonne.

"In terms of cost, we say that next increment of production, 15 million to 18 million tonnes, is sort of $200 to $300 a tonne." — Kenneth Seitz (CEO)

Pace of share buybacks

Q (Andrew Wong · RBC): The analyst asked whether the higher Q2 buyback pace is the new regular rate or a temporary increase tied to cash flow or perceived value.

A: They describe a disciplined capital allocation framework targeting about 1.5x net debt to EBITDA and using divestiture proceeds to strengthen the balance sheet. Buyback pace has increased from about $50 million/month to $55 million/month and now about $75 million/month in Q3; they expect to remain around these levels for the rest of the year while keeping a structural and cyclical view into 2027.

"For the remainder of the year, we anticipate that we will remain in and around these levels." — Mark Thompson (CFO)

Retail volume drop and inventories

Q (Joel Jackson · BMO): The analyst asked why domestic retail fertilizer volumes were unusually low in Q2 and what that implies for inventories and the rest of the year.

A: Phosphate volumes declined about 10% due to demand destruction and sulfur issues; nitrogen volumes were down about 7% driven by lower corn acres, a larger 2025 fall application, delayed Western Canadian planting, and some deferral into H2. Potash was up 1%; they expect the crop is advancing well, an open fall application season, higher gross margin per ton to offset lower volumes, and they maintained guidance of $1.75 billion to $1.95 billion for downstream.

"We saw 1% growth in potash and that's to probably being the most affordable of 3 crop nutrients once again. Heading into the second half year, I mean, the crop is advancing well, which could lead to an open application season so that we continue to expect good volumes this fall on the year." — Kenneth Seitz (CEO)

Australian livestock boost details

Q (Vincent Andrews · Morgan Stanley): The analyst asked for more detail on the strong Australian livestock season benefit and whether it will continue for the rest of the year.

A: Livestock markets are very strong in Australia with good weather and strong export demand supporting lamb and beef prices. Nutrien earns stock agent commissions on sales of sheep and cattle; they noted some Chinese import restrictions but have not seen a price impact yet and are monitoring the situation.

"We also saw the Chinese government put some import restrictions on particularly Australian material but -- and product, but we haven't seen that impact prices yet." — Christopher Reynolds

Proprietary products margin drivers

Q (Kristen Owen · Oppenheimer): The analyst asked what drove the proprietary product gross margin strength and whether any timing shifts moved volumes from Q2 to Q3 in North America.

A: Proprietary products show structural gross margin growth, helped by 26 new product launches and strong market response, with demand focused on yield preservation and efficacy enhancement when commodity fertilizers are volatile. Timing shifts were mainly nitrogen deferrals from H1 into H2 and increased fungicide demand moving into Q3 due to wet weather in parts of the Midwest.

"As Ken said, underpinned by the introduction of a number of new products and a terrific response from the market to those new products." — Christopher Reynolds

Drivers of 74–77 million range

Q (Edlain Rodriguez · Mizuho): The analyst asked what factors would push global potash shipments to the low end or the high end of the 74 million to 77 million tonnes range.

A: They see robust demand, affordability, available supply at the midpoint, and stable inventories as supporting the midpoint. The high end would require effective global capacity to serve all markets for the rest of the year; the low end risks include El Niño impacts in Southeast Asia, inventory builds, supply-chain disruptions, and weather affecting fall applications.

"At the very top end of that range, we would need to see the effective capacity be available to serve all markets across the world for the remainder of the year." — Mark Thompson (CFO)

Why SG&A rose and seed sales fell

Q (Jeffrey Zekauskas · JPMorgan): The analyst asked what caused the ~6% retail SG&A increase and why seed gross profits fell by about $20 million in the quarter.

A: The biggest driver of higher retail expense was higher retail fuel and fleet costs, with fuel being the largest factor, though they say structural cost savings are maintained. The seed shortfall was mainly due to a significant decrease in rice acres.

"I think what you're referring to would be mainly the impact of lower rice acres." — Christopher Reynolds

Nutrient margins and crop protection volumes

Q (Matthew DeYoe · BofA): The analyst asked whether nutrient margin trends were driven by mix and where crop protection volume growth came from.

A: They expected fertilizer sales volumes to be down and saw a larger-than-expected decline in H1, but they still expect crop nutrient margins to be stronger year-over-year into the remainder of the year to offset volume weakness. Crop protection performed as expected with farmers protecting crops in H2 driving stronger CP volumes.

"As we also said on the May call, we expected crop nutrient margins to be stronger." — Mark Thompson (CFO)

Nitrogen buyer caution and geopolitics

Q (Ariana Milin · CIBC): The analyst asked if buyers remain cautious on nitrogen due to market volatility and whether a geopolitical risk premium will persist in nitrogen markets.

A: For buyer cautiousness, they said no — summer fill programs had strong responses and 85% commitment into Q3, so they are constructive on N and K for the fall. On geopolitics, they said it's difficult to give a definitive answer; Middle East disruptions (including about 1.5 million tonnes a month not flowing through the Strait of Hormuz) and possible infrastructure damage could affect supply and natural gas prices, but Nutrien's assets are in feedstock-advantaged geographies, leaving them overall constructive.

"So with respect to the first part of the question, the answer is no." — Kenneth Seitz (CEO)

Will farmers cut potash for nitrogen

Q (Rahi Parikh · Barclays): The analyst asked why management is confident farmers will not cut potash spending to save for nitrogen given higher nitrogen prices and mixed crop economics.

A: They observe farmers adjusting the fertilizer mix due to relative affordability, which supports potash demand. Signposts include a successful summer fill in North America, heavy commitment into Q3, an open fall application season, Canpotex fully committed through Q3 and expecting volumes up, and modest potash volume growth in H1.

"Canpotex is fully committed through Q3 and expecting overall volumes to be up this year compared to last." — Kenneth Seitz (CEO)

Phosphate operations and sale timing

Q (Lucas Beaumont · UBS): The analyst asked how Nutrien is managing phosphate input cost pressures versus peers and whether now or later is the better time to sell assets given market disruption.

A: They diversified product mix, developed premium products, and reduced costs so operations are running safely and in contribution margin positive territory today, though they watch sulfur volatility. In the strategic sale process they expect buyers to look through current volatility, have had good interest across assets, are shortlisting responses, and expect some conclusions by the end of the year.

"And again, that any strategic buyer would look through the current market and understand the quality asset that Aurora is and sort of assessing White Springs and our feed plants." — Kenneth Seitz (CEO)

Potash logistics and terminals

Q (Steven Hansen · Raymond James): The analyst asked whether the current logistical network and terminals can handle longer-term potash growth and about plans for Pacific Northwest terminals.

A: They plan for long-term growth, believe North American infrastructure to customers and farms is well built, and continue to seek cost and efficiency improvements. For offshore growth they have sufficient port capacity and rail contracts for near- and medium-term volumes, their load-out facilities are sized for growth, they want diversified terminal options and are exploring Longview, and they do not see impediments to continued potash growth.

"We have sufficient port capacity to meet near- and medium-term volume growth." — Kenneth Seitz (CEO)

Biofuel mandates and corn yield outlook

Q (David Symonds · BNP Paribas): The analyst asked how rising biofuel mandates affect fertilizer needs over the next 5 years and for a view on U.S. corn yield after a dry July.

A: Expanding biofuel mandates (e.g., Indonesia B50, potential year-round E15 and renewable diesel support in the U.S.) are supporting grain and oilseed demand, tighter supply-demand balances, and supportive grower economics and acreage. Weather has been hot and dry in many regions, especially the Western Corn Belt with reduced condition ratings and lower nutrient application rates; this raises downside yield risk and adds uncertainty, which tightens fundamentals and supports a more optimistic view of ag economics.

"And as we look over the medium term, with that increased certainty, we expect increased domestic demand in the U.S. to be supportive of grower economics. and acreage." — Jason Newton