June 8, 2022 Market Outlook Session Investor Update 2022
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June 8, 2022
Market Outlook SessionInvestor Update 2022
Forward Looking Statements 2
Certain statements and other information included in this presentation constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements")under applicable securities laws (such statements are often accompanied by words such as "anticipate", “forecast”, "expect", "believe", "may", "will", "should", "estimate", "intend" or othersimilar words). All statements in this presentation, other than those relating to historical information or current conditions, are forward-looking statements, including, but not limited to: ourmarket outlook for 2022 and beyond, including fundamentals (short, medium and long-term) and market (including potash and nitrogen) fundamentals commentary and the anticipated supplyand demand thereof and import and export volume expectations, expected market and industry conditions with respect to stock-to-use ratios, crop inventories and economics, production anddeliveries, demand (including structural changes), margins, sales, prices, costs, energy costs, the impact of market fluctuations, the impact of import and export volumes as well as restrictionsand sanctions, impact of the conflict in Ukraine including on supply and demand, biofuel demand and related drivers, expectations for impact of above average prices, energy market structuralchanges and our expectations for a clean ammonia and related key demand sources. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many ofwhich are beyond our control, which could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-lookingstatements. All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to belowand elsewhere in this document. Although Nutrien believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of the forward-looking statementsand readers should not place an undue reliance on these assumptions and such forward-looking statements. The assumptions that have been made include, among other things, assumptionsthat future business, regulatory and industry conditions will be within the parameters expected by Nutrien, including with respect to prices, margins, demand, supply, product availability,availability and cost of labor and interest, exchange and effective tax rates, assumptions with respect to global economic conditions and the accuracy of our market outlook and fundamentalsexpectations for 2022 and beyond, our expectations regarding the impacts, direct and indirect, of the conflict between Ukraine and Russia on, among other things, global supply and demand,energy and commodity prices, and our expectations regarding the impacts, direct and indirect, of COVID-19.
Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global economic, market andbusiness conditions; weather conditions, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices; the supply and demand and price levels forcrops and crop nutrients; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy (including tariffs and trade restrictions),government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof; political risks, including civil unrest, actions by armed groupsor conflict and malicious acts including terrorism; the occurrence of a major environmental or safety incident; risks of crises such as outbreaks, epidemics, pandemics or other similar publichealth crisis including the current COVID-19 pandemic including variants of the COVID-19 virus, and its resulting effects on economic conditions, restrictions imposed by public health authoritiesor governments, including government-imposed vaccine mandates; regional natural gas supply restrictions; the conflict between Ukraine and Russia and its potential impact on, among otherthings, global market conditions and supply and demand, energy and commodity prices; and other risk factors detailed from time to time in Nutrien reports filed with the Canadian securitiesregulators and the Securities and Exchange Commission in the United States.
All forward-looking statements are provided as of the date hereof. Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document, except asmay be required under applicable laws.
June 8, 2022
Market Outlook Key Messages
1. Short-term market fundamentals supported by tight supply/demand balances entering 2022 and further tightening driven by the conflict in Ukraine
2. Medium to long-term fundamentals supported by several structural supply and demand drivers across energy, agriculture and fertilizer markets
3. Longer-term market fundamentals support an upward shift in mid-cycle crop and fertilizer prices
3
June 8, 2022
Near-Term Agriculture Fundamentals
June 8, 2022
Tight Global Grain & Oilseed Supplies Entering 2022/23 5
Global Grain Stocks/Use RatioPercent (excluding China)
Global Oilseed Stocks/Use RatioPercent
Source: USDA, Nutrien
Buffer stocks entering the 2022/23 growing season are drawn down, increasing the sensitivity to supply/demand shocks
Lowest global grains stocks/use
since 2007/081
Lowest global oilseed
stocks/use since 2015/162 in
2021/22
1. Excluding China, grains refer to barley, corn, millet, mixed grain, oats, rice, rye, sorghum and wheat2. Oilseeds refer to soybeans, canola and sunflowers
June 8, 2022
21.720.6
23.124.1
27.1
21.722.2
19.9
22.3
2018
/19
2020
/21
2014
/15
2017
/18
2016
/17
2015
/16
2019
/20
2021
/22F
2022
/23F
17.717.3
17.9
17.3
16.7 16.5
15.3 15.414.9
2019
/20
2018
/19
2015
/16
2014
/15
2016
/17
2021
/22F
2017
/18
2020
/21
2022
/23F
US Crop Stocks-to-Use Ratios Remain Historically Low 6
US Soybean Ending Stocks & Stock/Use RatioMillion Bushels Percent
Tight supply and demand fundamentals in advance of the 2022 growing season increases sensitivity to production challenges
US Corn Ending Stocks & Stock/Use RatioMillion Bushels Percent
Source: USDA
June 8, 2022
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
500
1,000
1,500
2,000
2,500
14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22EUSDA
22/23PUSDA
Ending Stocks US Stocks to Use
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1,000
14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22EUSDA
22/23PUSDA
Ending Stocks Stocks to Use
05001,0001,5002,0002,5003,0003,5004,0004,500
2020
2021
2022
E20
23F
-1000
100200300400500600700800900
2019
2020
2021
E20
22F
2019
2020
2021
E20
22F
2019
2020
2021
E20
22F
2019
2020
2021
E20
22F
2019
2020
2021
E20
22F
Global Crop Economics Driving Historically High Farm Incomes 7
Key Crop Grower Cash Margins1
Local Currency Margin/AcreUS Corn Cash Selling Price & Costs3
US$/bu
Prospective grower cash margins continue to be historically strong driven by high crop prices and yields
1. Brazil is local currency margin/hectare. 2. Due to crop year timing in Brazil the 2023F references the 2022/2023 crop year, which is planted in Q3-2022 with growers realizing returns in Q1-2023.3. Annual cash costs on a per bushel basis are impacted by both realized inflation/deflation input costs and by the annual corn yield.4. Cash rent is included in other costs. Source: USDA, IMEA, Bloomberg, ICE, FAO, IFA, Nutrien
US Corn US Soybeans US Wheat US Cotton CAN Canola BRZ Soybeans2
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020E 2021F 2022F
Other Costs Fertilizer Seed Chemicals Corn Price
June 8, 2022
4
Impacts of the Conflict in Ukraine
June 8, 2022
Russia, Belarus & Ukraine Are Key Players in Global Agriculture and Fertilizer Markets 9
19% 24%14%
27% 26%12% 2%
19%
1%1%
1%
15%
10%22%
59%75%
84%72% 74%
88% 83%71%
Potash Ammonia Urea AN/CAN UAN DAP/MAP Corn Wheat
Russia Ukraine Belarus Rest of World
Global Crop & Fertilizer Export Market Share1
Percent
The reduction of Eastern European exports has created significant supply tightness for fertilizers and crop commodities
Top Three Importing Regions2
1. Based on the 5-year average exports from 2017-18 to 2021-222. Based on 2020 & 2021 trade data for Russia, Ukraine and Belarus
Source: USDA, CRU, IFA, Nutrien
MoroccoTurkeyIndia
BrazilIndia
Mexico
BrazilKazakhstan
Estonia
USFrance
Argentina
BrazilUS
Argentina
BrazilChina
US
EUChinaIran
EgyptTurkey
Indonesia
June 8, 2022
0
15
Other CanadaNutrien BelarusRussia Europe Middle East China
Potash Production in Selected Regions
Potash Production in Selected Regions1
Millions of Tonnes KCl
Expect significant reduction in shipments from Eastern Europe due to sanctions and other restrictions. Limited existing global capacity available to meaningfully close supply gap.
10
Source: CRU, Company Reports, Nutrien
1. Production changes differ from our expectations in operational capability.
12
3
6
9
202020212022F Production Range
June 8, 2022
Reduced Russia & Belarus Potash Supplies
We expect potash supply constraints to be most apparent in 2H 2022 and much of the uncertainty in our projected 2022 supply/demand range is concentrated in the second half of the year
Russia Shipment Scenarios1,2
Millions of Tonnes KCl
3.5
11
1. Last 9 months of 2022 exports to China via rail are forecast based on achieving monthly run rates similar to peak levels observed in 2021 for the full year.2. Total shipments range based on our assumptions for regional operational capability in 2022.
0
1
2
3
4
5
6
7
8
9
1H-21 2H-21 1H-22F 2H-22F
Domestic Shipments Exports to China via Rail
Exports (Other) Export (Other) Range
Belarus Shipment Scenarios1,2
Millions of Tonnes KCl
3.5
0
1
2
3
4
5
6
7
8
1H-21 2H-21 1H-22F 2H-22F
Domestic Shipments Exports to China via RailExports (Other) Export (Other) Range
June 8, 2022Source: CRU, Argus, Nutrien
Millions of Tonnes KCl
Global Potash Deliveries by Region
India Other Asia North America Latin America China Other
3.0 – 3.2MmtIncreased volumes are likely necessary in 2022 however the discounted potash contract price and global supply constraints may limit India’s ability to significantly increase imports in 2022
8.5 – 10.0MmtPalm oil prices remain very strong currently trading at record levels of over 6,000 MYR/tonne, supporting potash demand, however global supply constraints may limit shipments
9.5 – 10.5MmtAnticipating a reversion to average shipment levels after two consecutive years of strong shipments, and a reduction of offshore supplies from Russia and Belarus
13.5 – 15.0MmtStrong corn and soybean fundamentals support grower demand, however in Brazil ~45% of potash imports come from Belarus and Russia, which may lead to local potash supply constraints
14.0 – 15.0MmtThe discounted Chinese potash contract relative to global spot markets may lead to reduced shipments in 2022 compared to our initial forecasts with the tighter global supplies
11.0 – 13.0MmtGrowing demand for NPK fertilizers are expected to continue boosting potash demand in the long-run, however supply constraints leading to high prices may result in demand destruction for markets like Africa
2022
Fo
reca
st
12
0
5
10
15
20
18 19 20 21 22F 18 19 20 21 22F 18 19 20 21 22F 18 19 20 21 22F 18 19 20 21 22F 18 19 20 21 22F
We expect global potash demand to be in the range of 60 to 65 million tonnes in 2022; despite strong ag-fundamentals which support demand, the likely supply disruptions from Belarus and Russia may constrain global supplies and reduce shipments
Source: Industry Consultants, Nutrien
June 8, 2022
13Russia is the World’s Largest Nitrogen Exporter
0
1
2
3
4
5
6
7
8
9
10
2020 2021 2022F
Russian Urea ExportsMillion Tonnes Urea
0
1
2
3
4
5
2020 2021 2022F
Russian Ammonia ExportsMillion Tonnes Ammonia
Prolonged reduction in Russian nitrogen exports is expected with ammonia exports most impacted
June 8, 2022Source: CRU, Argus, Nutrien
Longer-Term Structural Support for Energy, Agriculture & Fertilizer Markets
June 8, 2022
1. Key grains include corn, wheat, barley and sorghum2. Based on stable Russian area and yield and a permanent 20% reduction in Ukrainian production from trend levels in 2021
Key Global Grains are Structurally Tight 15
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
Key Global Grain Stocks/Use Ratio1
Percent (excluding China)
Historical Trend
Reduced Russia/Ukraine Growth2
Historical Trend with Chinese Import Growth
Given the tight current grain supply/demand balance, the market is sensitive to below-trend yields or structural supply/demand shocks
Source: USDA, Nutrien
June 8, 2022
21
4140 44
163
-10-18
-61 -57 -60
-80
CornWheatRiceBarleySorghumNet Surplus/Deficit
Structural Changes in Chinese Grain Demand 16
Structural shortfall in Chinese grains has emerged since 2015 when land planted to grains peaked in China
China’s Grain Production Surplus/DeficitMillion Tonnes
Note: China’s grain production surplus/deficit is calculated by subtracting domestic consumption from annual production
Source: USDA, Bloomberg
China’s Major Grain AreaMillion Hectares
0
20
40
60
80
100
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022F
Corn Rice WheatAt historical trends, potential for
a 80Mmt deficit of grains in China by 2026/27
Chinese grain area peaked in 2015
June 8, 2022
Increasing Biofuel Consumption 17
Global ConsumptionBillion Liters
Continued growth in biofuel demand driven by clean fuels standards and emissions reduction targets in hard to abate sectors
Source: USDA, IEA, EIA, C&EN, Bloomberg, Nutrien
Cumulative Feedstock Demand Growth1
Million Tonnes
1. For illustrative purposes, used corn as the feedstock for all new ethanol production, estimated average vegetable oil feedstock conversion and ethanol for biojet fuel conversion and summed the total growth from 2022-forward June 8, 2022
0
50
100
150
200
250
2019 2020 2021 2022F 2023F 2024F 2025F
IEA Base Case IEA Accelerated Case
0
20
40
60
80
100
120
2022F 2023F 2024F 2025F
IEA Base Case IEA Accelerated Case
Source: Bloomberg, Nutrien
Structural Increase in Crop Prices 18
June 8, 2022
Sustained structural increases in crop prices have historically occurred following multi-year periods of above-average prices;The current forward curve illustrates a sustained period of above-average prices is anticipated over the medium-term
Chicago Corn1
US$/Bushel
0
1
2
3
4
5
6
7
8
2020 2021 2022 2023 2024 2025
Actual/Fwd.CurveNov. '20 FwdCurve
0
2
4
6
8
10
12
14
16
2020 2021 2022 2023 2024 2025
Actual/Fwd.CurveNov. '20 FwdCurve
Chicago Soybeans$/Bushel
0123456789
101112
2020 2021 2022 2023 2024
Actual/Fwd.CurveNov. '20Fwd Curve
Chicago Wheat$/Bushel
1. The prices in the forward curve are based on futures prices as of June 6, 2022
Expect Supply Constrained Potash Market in the Medium Term
0
5
10
15
20
25
30
35
2020 2021
The reduction in Eastern European potash supply could lead to several years of supply constraints driven by reduced production and project delays
Eastern European Potash Production Million Tonnes KCl
June 8, 2022Source: CRU, Fertecon, IFA, Nutrien
19
2022F(Previous)1
2022F(Current)
2023F(Previous)
2023F(Current)
2024F(Previous)
2024F(Current)
2025F(Previous)
2025F(Current)
2020 2021
1. Previous forecast is based off Nutrien’s projections as of late 2021
June ’22 UpsideJune ’22 Downside
Previous Forecast
Energy Market Structural Change 20
Dutch TTF Natural Gas$/MMBtu
0
5
10
15
20
25
30
2020 2021 2022 2023 2024 2025
Actual/Fwd.CurveNov. '20 FwdCurve
0
5
10
15
20
25
30
2020 2021 2022 2023 2024 2025
Actual/Fwd.CurveNov. '20 FwdCurve
NYMEX Natural Gas$/MMBtu
0
5
10
15
20
25
30
2020 2021 2022 2023 2024 2025
Actual/Fwd.CurveNov. '20 FwdCurve
Newcastle Coal$/MMBtu
Higher North American gas prices, but cost advantage versus high-cost nitrogen regions has increased significantly
North American Gas Remains Advantaged
Depending on the year, TTF forward prices are between $10/MMBtu and $25/MMBtu above the Nov. 2020 curve
Step Change in European Gas Prices & Higher Outlook
High global natural gas and LNG prices support increased demand for coal and higher prices
Higher coal prices support Chinese urea costs
Tightened global energy supply and demand balances support significantly higher natural gas and coal price outlooks
Source: Bloomberg, Nutrien
June 8, 2022
Expect Supply Constrained Nitrogen Market in the Medium Term
The nitrogen supply/demand balance was expected to tighten over the medium-term prior to the supply constraints in Eastern Europe, but the conflict has tightened the balance 1-2 years earlier than expected
Global Nitrogen Demand and Production by RegionMillion Tonnes Nitrogen
June 8, 2022Source: CRU, Fertecon, IFA, Nutrien
21
60
70
0
60
00
70
80
30
90
40
10
50
20
110
120
140
130
150
170
100
0
160
70
80
60
90
159157 159
168
2020 2021
157
161160157 162
166164
164
China
Russia
IndiaEurope
Africa
Other
2022F(Current)
2023F(Current)
2024F(Current)
2025F(Current)
Trend Demand
Constrained Demand
1. 2021(Previous) is based off Nutrient’s projections as of late 2021
2022F(Previous)1
2023F(Previous)
2024F(Previous)
2025F(Previous)
Expect Strong Emerging Demand for Clean Ammonia 22
Nutrien is well positioned to add incremental capacity to meet demand and supply clean ammonia markets as they develop and grow
As of March 2022, 33 countries along with the EU have set net-zero emissions targets, in accordance with the Paris Agreement. Major ammonia producers like China, India, and the US have net-zero emissions targets which will require industries to abate emissions moving forward.
Clean Ammonia Demand Growth Potential1Million tonnes
Up to 10
2030
Up to 2Up to 10
Up to 22Mmt
Initial demand
Long term growth
Demand upside
Up to 40
Up to 160Mmt
Up to 80
Up to 40
2040
Up to 75
Up to 140
Up to 250
2050
Up to 465Mmt
1. 2021 Global merchant ammonia trade of approximately 18 Mmt
Key Demand Sources
Agriculture & Other – Potential for a premium to develop in agricultural markets for clean ammonia to be used to produce low carbon food, fuel and fiber
Hydrogen - Europe, Japan and South Korea have stated policies for integration of hydrogen into their energy systems.
Power Generation - Asia pacific has a goal to co-fire ammonia in coal power plants through incremental steps starting in late 2020’s
Marine Fuel - International Marine Organization (IMO) have committed to a 40% reduction in intensity by 2030, and 70% by 2050, driving the need for low/zero-carbon fuel alternatives
June 8, 2022Source: Argus, McKinsey, HIS, Climate Action Tracker, Nutrien
FertilizerPower Generation / Hydrogen CarrierMarine Fuel
Expect Higher Future Mid-Cycle Prices 23
0
100
200
300
400
500
600
NOLA Urea Rolling 10-Year Average$/short ton
050
100150200250300350400450500550600
Tampa Ammonia Rolling 10-Year Average$/tonne
US Midwest Potash Rolling 10-Year Average$/short ton
0
100
200
300
400
500
600
Expect potash supply constraints to support an increase in rolling average potash prices through the cycle
Tight urea supply/demand balance and increased marginal costs in Europe and China support increased average prices through the cycle
Ammonia supply reductions from Russia and Europe as well as a step-change in average European natural gas prices supports higher average ammonia prices through the cycle
Tight global supply/demand balances and increased raw material and other operating costs support at least $50/tonne higher prices through the cycle than the previous 10-year average
June 8, 2022
20-Year Trendline 20-Year Trendline 20-Year Trendline
Source: CRU, Nutrien
Key Conclusions 24
Robust short-term agricultural fundamentals and increased sensitivity to 2022 growing conditions and longer-term structural strength driven by production limitations and several demand factors
Potash supply uncertainty and potential for constraints highest in 2H 2022, with continued demand-supply gap expected over the medium-term expected to support a shift higher in mid-cycle prices
Nitrogen supply and demand balance has tightened 1-2 years earlier than expected, which when combined with a step-change higher in energy prices combines to support a shift higher in mid-cycle prices
Shift higher in energy costs supports short and long-run nitrogen marginal cost increase and historically is highly correlated with crop and fertilizer prices
June 8, 2022
Q&A
25
June 8, 2022
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