Joc O’Rourke : Yeah. Thanks, Vincent. I’m try to unpack that one a little bit. Yeah. So as we head into safrinha, I think the concern that’s out there, if you will. And I’m not saying it’s an unfounded concern is when you look at the basis for corn that we’re starting to see in the market, it’s not the global market price. It’s the idea that the basis — the in-country basis, the availability of transport and et cetera, to get it out of the country has been challenging, and it’s probably hurt the economics of some of the farmers. That being said, if we look at the general in-country price to the price of fertilizer and what we call the barter ratio down in Brazil, it still shows a fairly profitable corn yield and on — sorry, corn market.
So our view is that probably is early stage and probably a little overstated. It’s like what we saw this year in safrinha season, where earlier projections, we were looking at — people were looking at 40 million tonnes. Now we’re looking a lot closer to 43 million tonnes of total fertilizer to Brazil, which is starting to get back to the peak of 46 million tonnes. Historically, Brazil has grown at about 4% or 5% a year. So we expect, in general, Brazil to continue to grow both acreage and yields. So fertilizer demand has to follow that.
Operator: Thank you. And our next question today comes from Jacob Bout with CIBC. Please go ahead.
Jacob Bout : Hi, good morning. And congratulations on Joc on your retirement. Maybe just going back to the potash industry. Last week, there was the announcement of the second phase of Janssen. And just curious on getting your thoughts on what the impact of Janssen will be on the potash industry, both in North America and also globally? And do you think about changing your market strategy allows this ramp?
Joc O’Rourke : Yeah. Thanks, Jacob. Let me, first of all, say, by their own announcements, and I have had conversations that would tell me that while they will start up first phase at the end of 2026, they won’t be ramped up to 4 million tonnes on their own estimates until 2030. At 2030, they would start their second phase, and that would probably ramp up similarly over five years. So in our five-year forecast, we have little or no significant production from BHP. As we look out 10-ish years, which is what we’re talking about here, if we see the market growing at the rate from — as I said to Joe, and maybe the point here is growing from the 72 million tonnes, we were pre war, not from the 65 million tonnes. But if we see the market growing at that 2% a year, that’s 1 million-plus tonnes a year.
So in 10 years, you could easily be in a position where that could be absorbed reasonably. How it will work from a trade flow perspective is absolutely yet to be seen. We assume that they would go into the North American market. But the best analogy probably is the [indiscernible] mine [ph], where for all the worry about the disruption. There’s really came on and it came on slowly. They focused on the export market, and it really was absorbed in quite reasonably. So who knows what it will do, I guess, if it comes on faster that could change people’s strategies. But for now, I think I would say is hold the course and I don’t see it as a big threat for a long time.
Operator: Thank you. And our next question comes from Josh Spector with UBS. Please go ahead.
Lucas Beaumont : Good morning. This is Lucas Beaumont for Josh. Just switching to phosphates. So your shipment forecast there is calling for an increase of 2 million to 3 million tonnes next year. So just wondering, could you kind of walk us through how you see your production outlook compared to this year? And how much of that shipment uplift would you expect to capture from this year’s base? Thanks.
Joc O’Rourke : Okay. Thank you. Yeah. So we are expecting growth in the range of 2 million to 3 million tonnes next year as the market continues to recover, there will be some recovery by us and probably our Moroccan competitor will have some increased production. We expect a small increase again from China’s exports, not back to where they were, but about flat to where they were last year — or this year, sorry. In all cases, the demand, like I say, will be met by all of those. And then some of the Middle East producers will also be ramping up and PhosAgro, I think, has a small ramp-up that they’re looking at. So it will be met. But what we see there is probably a phosphate market that continues to be tight and maybe even tightening a bit next year. So it actually looks pretty good from a perspective of our future.
Operator: Thank you. And our next question comes from Andrew Wong with RBC Capital Markets. Please go ahead.
Andrew Wong : Hey, good morning. Thanks for taking questions. So just in the phosphate segment, kind of as we work through this more recent issue and operations, percentage of return to normal. Can you just talk about what normal looks like on a quarter-to-quarter basis? I mean, it’s been kind of difficult with the different impacts over the past couple of years. So just kind of get a good sense on what’s a normal production run rate, what are normal costs? What do they look like today kind of relative to where we’ve been historically? Thanks.
Joc O’Rourke : Yeah. Thanks, Andrew. I’m going to hand this over to Bruce because Bruce will be obviously responsible, along with Karen and her team for the future of the phosphate here. And I think — yeah, a fair question because we have had a lot of issues with respect to big hurricanes, pandemics and some mechanical faults. So worth a bit of a detailed answer. Bruce, can I give it to you?
Bruce Bodine : Yeah. Thanks, Joc, and thanks, Andrew. Just to start with your question, we’re I think historical levels that we’ve proven about 2 million tons a quarter is what we would expect out of Florida once we get back to kind of normal operation. But I think it’s worth to Joc’s point, kind of walking through some of the history here in the last two years with our phosphate production because it has been below those historical levels for sure. Some of it has been a function of some of the new rock reserves that we’re now mining here in Florida. We are becoming a lot more familiar with the kind of chemistry of the rock and should see some of those incremental impacts start to subside in the future as we move forward. But really, the larger issue is kind of two.
One has been Louisiana this year. We’ve experienced some unexpected operational and maintenance issues with two of our larger sulfuric acid plants, which has restricted ultimately finished product production on the back half of this year. A large chunk of that production was just returned to service this week. And then the remaining work that needs to be done there will be completed by the end of the year. So going into 2024, those issues should be largely behind us in Louisiana. And then the last that Joc kind of alluded to is the lingering effects of — the pandemic and the various hurricanes these past few years in both Florida and Louisiana have proven more difficult than I think we otherwise would have expected. And I think that’s not uncommon, not only for us but in other industries that we’ve heard as well.
