Modeling with New Disclosures Linking Price & Drivers to Financial Results
Mosaic Fertilizantes distribution
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Mosaic refers to this portion of Mosaic Fertilizantes as the B2C business.
Costs and finished product are generally tied to the USD price of the global product. However, with margins, the business is
actually long BRL in months 0-4, and the company hedges net cash proceeds into USD.
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After sale of product, where prices are pegged to the USD prices but the company received BRL, the company is long BRL in
months 0 through 3.
The business's fixed costs consist of warehouses and blending facilities, while variable costs include raw materials of N, P and K
granular products and logistics costs.
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On average, 50% of our exposure to BRL changes is hedged in the medium term, with close to 100% hedged in the short-
term (our net cash balances).
Mosaic's B2C business primarily sells blends, which historically have been comprised of:
Phosphates
Potash
Nitrogen
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45%; approximately 30% from Brazil production and 70% from North American production.
35%; 100% from Canpotex
20%; from third party suppliers
The distribution logistics costs average approximately $60/tonne.
The phosphates from North American production includes Micro Essentials, which has higher distribution margins than
commodity products.
The company targets distribution margins of -$25/tonne on commodities, but margins can be impacted by changes in prices on
inventory and product mix.
Distribution volumes are closely tied to seasonal volumes in Brazil, with the peak season occurring in the third quarter.
Mosaic
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