Good morning, ladies and gentlemen, and welcome to The Mosaic Company's Fourth Quarter 2015 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode. After the company completes the prepared remarks, the lines will be opened to take your questions. Your host for today's call is Laura Gagnon, Vice President, Investor Relations of The Mosaic Company. Ms. Gagnon, you may begin.

Thank you and welcome to our fourth quarter and full year 2015 earnings call. Presenting today will be Joc O'Rourke, President and Chief Executive Officer; and Rich Mack, Executive Vice President and Chief Financial Officer. We also have other members of the senior leadership team available to answer your questions after our prepared remarks. The presentation slides we are using during the call are available on our website at mosaicco.com. We will be making forward-looking statements during this conference call. The statements include but are not limited to statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date, and are subject to significant risks and uncertainties. Actual results may differ materially from projected results and factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release issued this morning and in our reports filed with the Securities and Exchange Commission. In addition we will be presenting non-GAAP financial information that we believe will provide insight into the company’s results. Reconciliations to the nearest GAAP numbers are found in the presentation slides and in today’s press release. Now, I'd like to turn the call over to Joc.

Good morning, thank you for joining us for our fourth quarter and full year 2015 earnings call. It seems clear to us that you’ll understand the market related challenges we face. To summaries, we’re experiencing a major decline in the broader commodities markets as well as global economic uncertainty and unprecedented strengths of the U.S. dollar. Agriculture, the grain and oil seed supply and demand situation remains relatively balanced. Even after three consecutive huge harvests and despite the severe price decline across other commodities, crop prices have been relatively stability. Unlike hard commodities we do not see a structural imbalance in agriculture. So, we’ve a positive outlook for the 2016 global shipments in both potash and phosphates. We believe recent price declines in potash and phosphates have been driven more by macroeconomic trend then by the current supply and demand balance. Weak currency valuations against the U.S. dollar are low in production costs for exporting nations and raising prices for importing nations. Normal seasonal pressures are exacerbating the fertilizer price trends. As a result our realized prices were down in the fourth quarter and have been under increasing pressure since the beginning of this year. We see several factors that are giving farmers around the globe and centers to use fertilizers to maximize yield and revenue per acre. The price declines in fertilizers have led to high crop nutrient affordability. Farmers are experiencing lower energy costs. Currency valuations are providing tailwinds for non-U.S. growers, selling U.S. dollar price crops. And the reasons to big harvests have withdrawn large amounts of nutrients from the soil which must be replenished. As a result demand is expected to remain strong. Without operating environment as a backdrop, we’ve three important concepts to discuss today. First, we expect Mosaic to emerge as stronger company from…

Thank you Joc, and good morning to you all. To briefly reiterate Joc’s commentary on the markets, our financial results are being impacted by a confluence of challenging factors. Global macroeconomic uncertainty, ongoing currency volatility and weakness in key currencies against the U.S. dollar, the lack of sufficient credit in Brazil and in potash it recently completed Canpotex proving run that added supply in the seasonally slow part of the year. Over the longer term though, we see cause for optimism including a balance supply and demand picture in phosphates, a manageable supply in demand picture in potash, and good conditions for agriculture in Brazil where the weak riyal leads to high prices in local currency for grains and oil seeds. Now, I will provide an overview of results in each of our three operating segments. In phosphates, our margins were lower in the fourth quarter primarily because of timing. We were selling fertilizer manufacture when raw material prices were higher than they are today. At the same time prices dropped quickly as traders anticipated the impact of lower raw material costs and buyer delayed purchasing. So, for the near term we are seeing seasonally limited sales volume and softer prices before we can realize our lower raw material costs. These trends are expected to continue into the first quarter. If we look longer term however our [strength] margin is expected to remain healthy with much lower raw material prices offsetting lower fertilizer prices. We expect continue declines in sulfur reflecting a number of curtailments announcements in China as well as our own. These low raw materials costs combined with a firming of phosphate prices in the spring leads us to expect margin rates to rebound to normal levels after the first quarter. In the first quarter we expect the…

Thank you, Rich. To summarize we are operating in a challenging environment. With volatility and headwinds coming from many fronts, but at Mosaic we have learned to embrace the cyclicality of our business our philosophy to produce to demand in both potash and phosphate has not changed. We are also managing costs remaining flexible on our capital spending and looking for opportunities to create long term value for our shareholders. We have been profitable through the trough. We have created the potential to accelerate quickly in better markets and we believe agricultural markets will prove more resilient than current sentiment expects. Mosaic is in excellent position for now and for the years to come. Now we would be happy to take your questions. Thank you.

[Operator Instructions] Your first question comes from the line of Ben Isaacson from Scotiabank. Go ahead, your line is open.

Thank you very much. I just wanted to dig a little bit deeper on Rich's comment on the phosphate market. Can you start by talking about how finished phosphate fertilizer inventory levels look worldwide right now? And then secondly, what changes to global supply do you see occurring in 2016 with the particular focus on China's export capability? Thank you.

Thanks Ben. Joc here. I am going to hand that straight to Mike I think this is really an area where he can give us the best answer. Mike do you want to just take that.

Sure. Let me start with the second question first in terms of Chinese export I am sure you are all aware of that exports spiked in 2015 to, I believe the China customers numbers in the 11.6 million ton range. As I think was noted earlier there have been some shut downs in China. Those tones we think will be lost our projection that we are using right now in our S&D is somewhere in that 10 million ton range we think it will be off a bit from the record last year. In terms of the first question phosphate inventories and Rich you should comment as well. I think it varies from region to region certainly continuing in China, we know that inventories have built up at the plant level. We think they are high there. Distributors in China are the same as distributors around the world in terms of when prices are trending down they tend not to take position, so we have seen a back up of inventories at the plant. But overall, we don't think inventories in china are excessive. The situation India maybe a little bit different. They had 2.5 million ton increase in imports last year and we think that inventories there are certainly greater than what they have been in the last couple of years when they were pulled down to very low levels. North America I think is in good shape. And in terms of Brazil inventories ended the year maybe a little bit above average but I think we are seeing some positive signs there that things are beginning to move. So I will let Rick provide his color commentary as well.

Yes, good morning Ben. I just spent some time going through with our Brazilian team something that are happening in the marketplace there and we have seen since the start of the year some pretty significant moves of volumes that had weighted to come to market, so these are blended volumes that are going out. And we see the phosphate inventories frankly being drawn down Mike described them as a both even year-over-year, but the sales that are going on right now for the first quarter reflect farmers coming back in to that marketplace. So I think those inventories get drowned down and we just finished spending time this week with some of our larger North American customers and I would say their buying is probably lower than it's been for the last three years. They are going to wait and move hand them out and so they are not sitting on a lot of inventories, there is not a lot of inventories sitting in North America and so we expect when the season hits us both is very well. And volumes will move through the system.

Your next question comes from the line of Vincent Andrews with Morgan Stanley. Go ahead. Your line is open.

Hi good morning this is Neel Kumar calling for Vincent. I had a couple of questions regarding micro essentials. Would you characterize demand is still in excess pie in the current operating environment? And can you also talk about how you have been managing the price premium with that and whether or not price has been secured in that?

Hi Neel. Joc O'Rourke we will start – I will start off with just the quick comment. As you are probably well aware our production capacity for micro-essentials was reaching us limit in the last year or so and we are just in the process of expanding that capacity at our new wells plant up to 3.5 million tons so as the future goes by we will actually have sufficient capacity. So in that timeframe volumes have not necessarily increased but we have really focused on the value add that we can achieve through that. I am going let Rick just talk about this for a little while and maybe come back with some closures.

Yes, good morning. Joc is right, we saw volumes stay relatively flat year-over-year, but we saw the increases in the premiums we have been able to capture for both on micro-essentials. We really are looking forward to the fact that we will have this increase production sometime in 2016 and our focus is really on expanding significantly into Brazil. Last year we did grow but it stayed relatively flat our plans for it to grow further but the I think a lot of activity in Brazil, a lot of uncertainty and so we felt real good that we stayed flat. We really are looking for opportunities to grow in the Caribbean basin as this new production comes on fill in the holes in North America where our customers and people they have not able to get access or asking for it and still I think I mentioned it before we are doing research in Europe because the crop cycle there is very similar to what we see in Canada which is one of our fastest growth markets.

We continue to have a very good view on future micro-essentials and it's about to real value to Mosaic on the long term. And I will close with that.

Your next question comes from the line of Don Carson with Susquehanna Financial. Go ahead. Your line is open.

Yes, couple of questions on potash given your more conservative view on shipping this year despite the benefit falling prices, do you have any plans to idle Colonsay indefinitely or do you think other should be doing more to idle production as well Saskatchewan? And then, just from a market perspective can you talk about your FPD program in potash given falling prices are you finding that you are shipping more potash with the price to be determined post shipment?

Let me start off with, we have said and we continue to say we will operate to the demand in the market and of course as we look at that we will make sure that the production that we curtail gives us the most long term benefit so whether that's because of the higher cost operations or whether we need maintenance or our differing maintenance at certain plants I think that decision gets made based on the value that adds to Mosaic. So, we are certainly not going to specify how we plan to do that but we expect to make sure that our production meets expected demand and that's why our guidance this year is 70% to 80% in the first quarter and it was about 70% in the fourth quarter against last year we operated 91% in the fourth quarter and 90% in the first quarter. So we are looking at controlling that to meet the market. I am going to give the FPD question straight over to Rick.

Yes, good morning Don. And it's a very appraisable question. We are seeing people take advantage for us and them of using our FPD program and I think we saw the impact of that showing up in our fourth quarter. There was question about our third quarter volume into North America and frankly we saw those volumes come back in the fourth quarter. I think the one thing that people don't understand is our program separates price from shipment and so it allows the dealer to put product into place, but the pricing mechanism is they can buy up to the moment they sell to the farmer. And at that point they have to price at the current price. And so their revenue recognition and ours match up, we think it creates a competitive advantage for us and it certainly does for our customer base.

I think just to reemphasize Rick other point there which is we believe the FPD program allows a much smoother logistic or supply chain for our products in other words we can get the products to market on our convenience and allow them to be where they need to be when the market will start moving.

Your next question comes from the line of Andrew Wong with RBC Capital. Go ahead. Your line is open.

Thank you and good morning. In Rich's prepared comments I think he mentioned that Mosaic was evaluating some unique opportunities in the fourth quarter, can you talk about which parts of your business you would like to see maybe footprint expanded would it be distribution or production and geographically what sort of regions you might be interested in? Thank you.

Andrew, thank you and obviously we are not going to comment on specifics of any M&A type activities. We might be involved in, but I would say just give it back to Rich for some more color, but I would say look we are interested in both of our sectors. We are certainly interested in anything that gives us a long term risk adjusted superior return above our cost of capital. Now having said that as per Rich's comment, the hurdle rate has to be adjusted for what we believe is low stock price right now so we are measuring any investment we make against the benefits of buying back our own stock. Rich do you want to add something to that?

Sure. Andrew. What I would say is it goes to impart capital management, it goes into the cyclicality of the industry and if you take a look at Mosaic historically going way back to the Cargill years the down part of the cycle due present opportunities and if you take a look at our track record Cargill got into the phosphate business at the down part of the cycle, we years later ended up consolidating with IMC Global that was a great opportunity for us and just a couple of years ago I would argue that we rolled up the CF phosphate business at a very attractive evaluation. So as Joc noted anything that we would do would go through a very strong filter but the fact that we have a strong balance sheet which I would argue would be the envy of many in the mining sector and [age] sector today is of great benefit to us and so we will continue to balance between repurchasing our shares and looking for opportunities out there and if there is something that is extraordinarily compelling it's something that we could act on.

Your next question comes from the line of Jeff Zekauskas from JPMorgan. Go ahead. Your line is open.

Hi, good morning. Two part question. When do you expect the modern phosphate plant to come on stream and how much more do you have to spend on it? And then secondly your corporate cost this quarter I think was an income benefit of 29 million, I was wondering why that was the case and your other current assets year-over-year are up about 260 million and I was wondering why what was too?

Okay I am going to hand the more technical finance questions over to Rich in a second here. Let me just quickly touch on modern actually over there couple of weeks ago on – it's really come a long well I think we are pretty pleased with where we are set with modern, they were just adding gas and starting to commission the boilers for the ammonia plant and recognize a big piece of the value of the modern joint venture will be that ammonia plant. Now to come on midyear, this year and probably finish commissioning somewhere around the third quarter, the rest of the plant should be ready by let’s call it late 2016 or early 2017 and then start commissioning at that stage. So that's kind of timing. And I believe we have about $3 million left to spend on it but again I will get Rich to give you little more background and then give you answers on our corporate spending. Thanks.

Sure thanks Joc. Hey Jeff, your two part question had five questions and so I will try to address them. This year we are the tail-end of modern as well as what I would say 2016 will represent the vast majority of our remaining expenditures there I think we are suggesting about $300 million in 2016 there could be some spillover effect that goes into 2017 and that you have to be determined based on variety factors in terms of how the construction is progressing today. Joc noted ammonia production comes online later this year. Phosphate production will come online sometime during 2017, but there will be a ramp up period. And we are progressing I would say very quickly right now in terms of the constructions process and those time horizons are still generally consistent with what we thought about couple of years ago. Your question about the [indiscernible] the positive contribution in the corporate segment really relates to intercompany eliminations between our phosphate segment and our international distribution segment. So when we sell phosphates to international distribution primarily Brazil, we do not take, we back off the profit or the profit is recognized I should say in the phosphate segment and then it's eliminated in the corporate segment until that product is sold by international distribution. So what you are seeing here is product that moved in the fourth quarter out of international distribution and therefore the profit is fully being recognized by Mosaic. And then I think your third question was an increase in other current assets and I think the answer to that is primarily additional FPDs this year compared to the last relevant period so I hope that's response to your question.

Your next question comes from the line of Adam Samuelson with Goldman Sachs. Go ahead. Your line is open.

Yes, thanks. Good morning everyone. So maybe let’s see your thoughts on India and particularly both on P&K near term seems the inventory there have built up pretty sharply and demand has weakened. Can you help me think about kind of how the back half of the year could progress actually get that import demand back up is it probably pretty swing factor in the sea borne P&K markets? Thanks.

Hi Adam, thanks for the question. I am going to hand out straight over to Rick McLellan to answer it, I think it's –

Yes. Good morning Adam. I think it is the swing factor of, I will ask Mike to add in after I am done. But, late in January the Indian government stopped allowing shipments to be moved from ports in country. So inventory had build up. It will get cleaned out quicker. How long that last and we have seen it before where it allows inventory to be cleaned up in country and it allows them to reset the subsidy. I have no idea what the subsidy will be for P&K in India, but it will be lower. And I think the other piece that the inventory built up for a couple of reasons and I think the biggest one was that the expectations for demand last year were little higher than people than what ended up happening. The impact of the drought in India impacted both P and K usage and right now what we are seeing in country with our own in country business is product is moving from the distributor shelf to the farmers. And so we have to separate what happens on the import side from what happens on the distributor shelf. And frankly, this move of their will help clean up some of that inventory and we look forward to the back half of the year will be very good going in to India but it won’t be at the level we experienced last year. Mike you want to add something there.

Yes, just a couple of notes. Obviously, there are lots of uncertainties there with respect to how good or bad the monsoon will be this year what happens to exchange rates, what if any changes to subsidies. So lot of moving parts there but bottom-line of our best guess at this point is in terms of MOP imports we think they will be off a little bit recall that in calendar year 2005 Indian port had formally in tons potash off a little bit from 43 to previous year but up from 3 million tons in 2013. We think they will be in at 37 to 39 ranges this year so off a little bit. Phosphate maybe a little bit different story as we noted earlier the import surge to 2.5 million tons last year from very low levels. We think they will probably be off maybe a half million to 3 quarter of million tons this year and how much it depends on all of those factors we noted earlier.

Your next question comes from the line of Jonas Oxgaard from Bernstein. Go ahead. Your line is open.

Hi, morning. So, I am curious about those timing effects in the phosphate so I understand most of that is ammonia moving down quite dramatically now you guided for Q1 on a 10% gross margin but can you talk a little bit more about what we expect Q2, Q3 even its starts betting, both in the percentage and absolute terms?

Sure. Thanks, Jonas, for your question. Certainly in Q1, we are faced with the impact of declining ammonia prices. Now that takes about a quarter to just work through our system. So, whenever the price is declining, the inventory value of your product tends to be higher for about that quarter until we work that higher cost material through our system. As we said in our guidance, by about the second third quarter, we expect our gross margins in phosphate to be returning to more or less what I would say as our normal range of high teens. And so we would expect the last three quarters to be in that high teen's area. Rick, did you, or Mike, did you want to add anything on those movement of those products?

No. I think you hear that Jonas, that the change year-over-year in raw material cost and even quarter-over-quarter, if you look at our sulfur core cost Q1 of '15, it’s a $147 a ton. Q1 of '16 is 95. Our ammonia cost in January '15 were 545, we bought ammonia in 16 for 350. In February of '15, we bought ammonia for 495, at February of '16, it's 310. So, those are significant drops and so as that stabilizes and we move through Q2 and Q3 and Q4, those are going to drive and improve gross margins.

Your next question comes from the line of Joel Jackson with BMO Capital Markets. Go ahead, your line is open.

Thanks. On the potash guidance you've given for volume. You're giving guidance that Mosaic will have roughly flat shipments on its own with that global demand for potash began about a 1.5 million ton. So, can you talk about how you see Mosaic gaining share, I know there is some flips going on in capital allocation between Vansco [ph] and New Brunswick being taken out of and potash getting more allocation there. I mean, in your base case, do you see that the Belarusians and the Russians cut capacity? Thanks.

Thanks, Joe, god to hear from you. Our base case actually is pretty darn flat for both world shipments and I'll let Mike expand on that, but also on our shipments. We go down slightly in Canpotex but with the inclusion of the New Brunswick tonnage into Canpotex, I think our overall Canpotex tonnage goes up slightly. And then North America is quite flat for us. So, we're expecting with sort of normal ranges, a very similar year to what we have this year. And Rick or Mike, do you want to expand on the global?

The only thing I would point out in terms of our global shipments, we've revised our 2015 estimate to 60.7, largely based on a big surge of imports by China. And our point estimate for 2016 is 59.7. So, we're looking only at about a million ton drop. So, I don’t think there's a great inconsistency there between what we're projecting internally and what we're projecting for the market.

Your next question comes from the line of Chris Parkinson with Credit Suisse. Go ahead, your line is open.

Good morning, everyone. This is Graeme Lyness on for Chris. I'm just wondering if you could talk to us a little bit on where we stand on the CapEx spent for Esterhazy, like percentagewise versus your total target. And then also wondering longer term, what's the potential there to improve your cost per ton? I know you mentioned that eventually there will be the opportunity to potentially eliminate the buying cost with, just wondering it's that like how much could you potentially bring on a cost per ton? Thanks.

Thanks, Graeme. Let me just highlight what Esterhazy. It's a little difficult to give an absolute CapEx number because much of it will be going forward will be development money that we spend developing the add-its and the mining area in undergrounded Esterhazy. And that is money we will not be spending at K2 or K1. So, there is a tradeoff there. We have probably about three to $600 million to spend over the next three years, at Esterhazy for the other equipment, like the conveyors, the shaft and development around the shaft. So, I would say those are the expected and then there is a net tax effect. So, overall the net money we're spending, I'm not sure the exact number, but it isn’t the gross number is about 600 million. The thing I'd point out is once we do have that completed, once we have ramped up Esterhazy, if we can remove our total buying cost at some point that is today costing us about $18 a ton across the whole business. So, we see the Esterhazy cost as being extremely competitive, probably some of the best in -- certainly some of the best in North America, once we get this done. Rich, do you want to continue that?

Yes. The only thing that I would add is just maybe in terms of the total CapEx program at Esterhazy on a percentage basis, where somewhere probably in the low to mid 30% range in terms of completion and then in terms of overall cost. I think as we've commented previously, once K3 is completed, not only will it eliminate obviously the brine info as Joc just noted. But the distances to the main shafts and so forth are going to be significantly closer and the overall operating cost environment for that line will be extremely good.

Your next question comes from the line of P.J. Juvekar with Citi. Go ahead, your line is open.

Yes. Hi, good morning. I think Mike mentioned that North American inventories of P&K are in good shape. One of the retailers complained about the wet fall season that prevented some application, plus, you talked about your FPD program. Given all that, one would think that retail inventories are slightly higher than normal, but maybe you can just talk about how do you see inventories, currently.

Thanks for the question P.J. I'm going to hand this to Rick pretty quick here. But I think the inventory buildup is more in the nitrogen suite than it is in the P&K suite. We did not see the same, although we didn’t see a big fall season because of the weather issues that were mentioned. We see it probably a lot of pent up demand and not a lot of inventory moved out to the retailers yet. And Rick, do you want to just expand on that?

Yes. Good morning P.J. What you're saying on weather conditions frankly is very regional. But there is big chunks of the U.S. market that need to get product out this spring. And all of them are hoping for an early spring so that they can get at some of that work. I think the biggest thing that will be a challenge in 2016 spring is the fact that dealers have held up placing the inventory in to bins. So, there's bins in out there that are empty. And when everyone starts, it will be where is the inventory, how close is it to them and frankly if everyone comes to the trough at the same time, it's just the inventory is not going to be there. And I think that's a good place for us to be. The other thing is that it will help pricing because inventory in place is going to be worth what people want to pay for it that day as they go to the field. Mike?

Sure, I just had a couple of comments. One, I think we'd characterize the fall application season has been generally average, that we didn’t see a major drop off and maybe in pockets here or there, but there are also pockets where it was very good. Case and point talking with one of our larger customers in Eastern corn belt. They actually sold more corns this fall than what their average was. So, I wouldn’t characterize it as necessarily as a poor fall application season. The other factor is with the expectation of corn acres being north of 90 million this year. We think that overall usage in the United States for P&K likely would be up 1% to 2%. And given that, coupled with the fact that there was good hold this fall. We're thinking both well for spring movement.

Your next question comes from the line of Jacob Bout with CIBC. Go ahead, your line is open.

Good morning. Wouldn't mind getting your thoughts on the dividend, specifically as pertains to your capital allocation positions in the context of CapEx share buyback or that type of thing.

Thanks, Jacob. Good to hear your voice. I'll hand this over to Rich pretty quickly, but I need to quite to say for my perspective, our capital planning or capital strategy is unchanged. So, with that I'm just going to hand it to Rich to just reiterate our strategy.

Sure. And Jacob, our stated philosophy on dividends is we're going to grow the dividend as our business and our earnings grow, obviously in the last 12 to 18 months. It's been a much more challenging environment out there. But in terms of our overall capital management philosophy, I think the dividend is a very important component of it. I think that it is something obviously that is entirely sustainable going forward. And as the cycle turns, we will continue to evaluate that against what our current share price is and make decisions accordingly.

And we believe we have strong enough cash flow capabilities through the whole cycle that we can not only pay a reasonable and fair dividend but we can also balance that with our growth opportunities and returning money to shareholders through share buybacks as we demonstrated through our accelerated share repurchase plan that we've announced today.

Your next question comes from the line of Steve Byrne with Bank of America. Go ahead, your line is open.

Yes. Thank you. I have a couple government actions that I would like you to comment on first being Brazils action last week to release some farmer credit, and with those moneys impact fertilizer demand in the near term. Are you seeing any activity as a result of that? And then the other one being trying this decision to terminate the crop support price there, are you expecting any impact from that action on fertilizer demand in China. How much of that 60 million ton shipment of yours, Mike, worldwide for potash is China versus a year ago level?

I'm going to hand that straight to Mike. I think he really has a good hand along our world supply and demand balance. Let me hand that straight to Mike.

Well, why don’t you have Rick talk about Brazil?

I'll talk about the Brazil credit. And good morning, Steve. I think that I expressed earlier that our team in Brazil is reporting for the second crop corn and second crop period that we've seen demand increases from the 1st of January. And that credit being freed up by the government is very good to see. It's not new credit, its credit that had been announced in last year's budget. But the fact that they freed it up is really quite significant. And we see that as positive. Farmers are still having issues with access to credit, but from our own business we're doing a nice job of managing credit, helping farmers connect themselves with either banks or with barter opportunities. Mike, you want to take the China question?

Sure. I guess in terms of what we know, obviously last year the Chinese dropped their corn support price, 10%. But that basically took their support price down from the ground numbers, $10 to $9. We expect that there will be further cuts in that, but it still keeps Chinese support prices for corn at relatively high levels compared to the rest of the world. So, just in terms of farm economics, we think farm economic remain healthy in China. The drop that we are showing in for example in potash shipments relates more to the buildup of inventories in any drop in demand. I think the bigger concern there is making Chinese corn for example more competitive. We'll cut into their imports of corn substitutes, whether it's DDGS, sorghum, barley, or whatever. But by and large, we think Chinese farm economics and the demand drivers there are still okay.

Mike, just one thing I'd add is, our local team in China made a point of saying farmers are seeing their support coming from the government not in the support of corn prices but in other subsidies that are replacing that. And so, as Mike said, let me just said, let me just add on to it. The farmer economics in China are really very good today.

Okay. So, we have time for probably one more question before we close.

Your next question comes from the line of John Roberts with UBS. Go ahead, your line is open.

Thank you. [Indiscernible]. I think you gave guidance for a 70% to 80% mine operating rates in potash for the first quarter. That would seem like a pretty wide range given we've only got six weeks left in the quarter?

Thanks, John. Yes. Probably is a wider range. We in general give about a 10% range or an estimate on that. But due to the high level of uncertainty in this first quarter, we thought it was prudent to make maybe a little higher range than we would normally give. Rick, do you have any comments on that that you need to add?

No, Joc. Just this is Q1 with, it's interesting we could run at higher rates if we see both the Chinese and the Brazilians come back into the market place. But we're putting the range in, so our assumptions on the lower end of the range reflect a little movement into either of those markets.

Okay. Thank you, everyone. Let me conclude. Before I even start my concluding remarks, I just want to point out maybe a bit of a Graeme reminded me of a point that we haven’t made much out lately. Which is we are now at 2600 feet deep in our two potash shafts on our way to 3100 feet. So, those projects are getting very near to completion in terms of the two shafts. It's been a very well executed project from our perspective, continues to run right on budget and right on schedule. So, just a call out to our potash team that has really done an extraordinary job of a very complicated big project. So, let me give my conclusions. To conclude our call, I just want to reiterate our key themes. First, we expect Mosaic to emerge as a stronger company from this challenging part of the cycle. Because we built the resilient business. And second, demand for agricultural commodities remain strong because global demand for food continues to grow. And I know we harp on that, but the reality is the whole thing is based on the food story and it continues to grow. So, we have created significant potential to accelerate when business conditions improve and we know the business conditions will improve. So, thank you very much for joining us today. Have great and safe day. Thank you.

This concludes today’s conference, you may now disconnect.