CF Industries Holdings, Inc. (CF) Earnings Call Transcript & Summary

Welcome back, everybody. We'll get started. I'm sure people continue to file in. With me today, we have Bert Frost, the EVP and Chief Commercial Officer of CF; and Martin Jarosick, VP, Treasury and Investor Relations. Bert, stalwart here at the conference. I don't know that I have to like fully introduce you here, I feel like most people are fairly aware of who you are.

I didn't -- you don't have any presentations or anything like that, Martin, if you want to kind of lead off and maybe provide just a quick overview of 2025, the year as it was, and we can kind of pick it up from there, if that makes sense.

Sure. So 2025 was another strong year for CF. We had $2.9 billion of EBITDA, $1.8 billion of free cash flow. Ran the assets at 97% utilization and had a really strong safety numbers. So all told, a really solid year of execution for the team.

Yes. So maybe we start, obviously, just nitrogen markets, easy enough. It's pretty important for you. Ammonia, right? On the call, You'd pointed some potential weakness given capacity expected. Obviously, start-ups or start-ups. Spreadsheet math is very easy to conceptualize the plant starting up. But in reality, often and always does take longer. But as BofA, that's been one of our concerns, right, if we look at the globally traded ammonia market. So how do you see this playing out in the short and the medium term as it relates to global ammonia? And then I want to kind of hone in on the U.S. side, which you obviously have some very real structural advantages and we can touch on that. But first, it seems like most of these plants are going to go international. So what -- how do you see that kind of playing out here?

It is an interesting market, an interesting dynamic. I think what has happened over the years on the analyst side, there's been -- it's coming, it's coming, it's coming and negative, negative, negative, but we've had a positive, positive, positive market where we've exceeded expectations each year since 2021 in terms of an EBITDA performance or a free cash flow performance. And so the ammonia market today is structurally strong. And you have globally traded ammonia. You have 200 million tons of ammonia demand per year. only 15 million to 17 million of that is globally traded on seaborne traded. A lot of that's going to Europe to backfill idled capacity or a product that's not coming from Russia as well as just for phosphate production in Morocco or imports into the United States. And so you have 2 dynamics taking place. You have idle capacity or capacity in Europe is not fully operating. You have gas supply issues in Trinidad has taken the nutrient plants, and I think other plants that are constrained today. And so you have a supply limited market and the expectation that this new capacity in the United States, Gulf Coast and Woodside will be coming on. But we're 3 years now waiting for some of that capacity to come on and demand continues to grow. And we continue to supply some of that with our new low carbon product as well as just participating in the market today is $600 to $700 a ton for ammonia on the globally traded market. And our cost today at $3 gas is about $120, $130. And so it's very attractive for us today. And then you talk about why CF is differentiated in the ammonia market. It's our capability to store, well, let's say, produce at a low cost, move that ton at a low cost through the pipeline in our barge system into our terminaling system that's in the heartland of the United States of the most -- and Canada as well as the most fertile ground in the world. And with high-yield in corn, you have a ready demand base for the ammonia -- much of the ammonia that we produce as well as our industrial customers. So how we see, yes, this capacity will come on eventually, but we have a very strong and stable market today.

So Woodside in Gulf Coast ammonia, 2 projects starting up basically along the U.S. Gulf. If I had the ability to move it to the corn belt, I would, but not everybody does. And so when we think about your advantage with NuStar and that market. Like if ammonia globally comes under pressure, does that spread to -- like corn belt expand because you can't get the product there? Does it stay consistent? Or does it compress because they'll just -- I know maybe ammonia is not easy to put a rail, but like will they just -- will the incentive be too strong to move it to the corn belt that the product will find a way?

And so when you look at how it does ammonia move today, you're right, it's pipeline, but it's fully subscribed ourselves, coke and others because you have to have a destination to receive it. So it's one point to produce it, you have to have the ability to receive it. We have that. But again, the pipeline is at capacity. And so -- but would that ton from Gulf Coast or Woodside make it to Iowa, probably not in the context of just that structure that's in place and how we optimize it but it's also with the differential between the Midwest and the world market. It's really a nitrogen calculation. So you have a farmer producer has options of urea, UAN or ammonia. And so he's going to -- he or she is going to choose those options based on economics. And so you have to stay. It's a global economy, it's a globally traded ton of nitrogen. So you have to stay within range, and we do that on an economic basis. But again, we're a low-cost producer, we have low-cost gas and low-cost capabilities to move our tons.

So as I think about this, right, because fundamentally, you can't just like move ammonia into a urea loop, right? You have to have the on-site production of ammonia. So you have the CEO to make the urea. If -- because on your earnings call, I should say, like there was some comments around potential softening in ammonia, but urea remains fundamentally very strong. And quite honestly, the supply-demand dynamics for urea are pretty favorable. There's really not much new supply. So how do we balance the view of maybe urea itself being fairly tight with a softer ammonia dynamics? Should it develop? Is there that fungibility that create softness? Or is it just not enough product on an end unit basis to do that?

Well, this is why generally, you upgrade your max potential because the value creation process of urea, UAN, DEF or other products, ammonium nitrate are generally consistently above the value for ammonia. However, we produced 10 million tons of ammonia, and then we upgrade about 5 million tons of urea, about 7 million tons of UAN. And the remaining ammonia ton is -- a lot of that moves again into the Midwest. But we have the capabilities of Midwest export, and we have industrial contracts that are consistent, 360, 24/7 demand pulls. And so that's how we balance the system. So we're always looking at how do we optimize how do we profit and how do we leverage those capabilities and consistently, where you will find is we're upgrading to the maximum capability and then moving the ammonia.

DEF, talking about kind of upgrading a bit. It's been a growth market for you as it relates to incremental investment. When we talk to our trucking analyst, the conversation amongst most of the truckers is DEF consumption is expected to grow. I got a question from this from an investor yesterday and I didn't have an answer for them, so I figured I would just ask you. We've also seen some commentary from farmers that given new -- like the policy around some of the Obama administration guidelines that are lapping might mean farmers don't have to use DEF. Is that like -- I don't know, like what's your expectation around just DEF sales and as it relates to a growth engine for the CF?

So DEF is diesel exhaust fluid. And it's really a market that didn't exist 15 years ago. In 2010, when we acquired the Terra assets and DEF was one of the components that we purchased from the core [ lite ] plant where they were producing it, it was in its infancy. And so you have a couple of things in parallel happening. One of them is just the generation of power units of trucks. So as new equipment comes online, initially, the dosing rate was a certain percentage. And as we've matured in this market from the equipment suppliers, that dosing rate has increased. And so the objections for dosing rates in the -- as the new units coming online and now and in the future for emissions control will be double or triple what they were 15 years ago. So you just have a natural growth rate with that. And then it's as new equipment has come into new applications like let's just use Deere or Caterpillar for different applications, that has also driven growth. And so what the Trump administration came out with recently on DEF for farming equipment is the frustration of a farmer, if you're out in your field and your DEF runs out in your equipment that, that can slow down or the efficiency of the operating rate of the equipment while it's on the farm. And so they want to give more of a flex period to resupply that those -- that farming equipment in the future. And so it's not that you don't use it because it's a very good DEF in the operation of the diesel engine allows for higher burning and more efficient burning. And so it's actually a very good product. And if you drive down the highway and don't see emissions coming out of the truck, you could think DEF. So we're excited. It's a growth market we have invested and we will continue to invest.

As I think about maybe before I pivot, like nitrogen demand in '26. '25 was a strong year for sales, obviously, record corn crop in the U.S. But we saw strong planted acreage in Brazil. We saw a better landed acreage in Ukraine. Do you think the market can grow in '26 versus '25? I guess perhaps early winter will be helpful as it relates to installed applications of ammonia moving into this year. But what do you expect for growth for this year?

The beautiful thing about our business is people like to eat. And so that drives consumption. And so as diets improve and as diets have improved globally, what you've seen in China over the last 20 years, what we've seen in India over the last 10 years, and then what you've seen in the acreage growth in Brazil, but what you're seeing with governmental changes in Argentina growth. And the 98 million acres of corn, that was planted in North America was a substantial change. We didn't expect that, we were projecting 93 million, 95 million acres. And so 98 million was, I think, the highest since 2012. We do see positive growth, one, because the stocks-to-use ratios are adequate, but not high. You're having good demand for ethanol production and the export of the incremental ton of ethanol. You have the cattle herd at its lowest level in 75 years. So cattle on feed are going to grow or cattle on feed for longer periods of time and the efficiency of cattle feeding does that. So you require more carbohydrates in that feed ration. And so we do see positive dynamics globally for -- especially where we produce, which is North America, but globally as well.

To maybe look at global trade flows a little bit, CBA coming into effect, then theoretically, maybe pause, maybe not, not, but what do you make of the flotations out of Europe around C-band? And what -- I mean, can they really pause C-band, but not also put a pause to their own domestic carbon tech because like that would implicitly kind of grew in their domestic industry wholesale. But how do you navigate that? I mean it's maybe not as important because you're U.S.-based, but like clearly, as a commercial person who's looking at trying to capture the best value you can for product, how do you navigate a market that seemingly wishy washy like a pretty -- what has been a pretty vocal policy?

So back to it is a global market. So as a global participant in that market, you have to pay attention to these various oscillations that happen, whether it's political or economic or structural. And this is an issue C-band implementing without knowing exactly what is going to be implemented and the cost has been very confusing for our European friends. And we do supply product whether both ammonia and UAN to Europe, and we have some very good customer positions that they. We have not been shipping UAN since the start of 2026 because it's an unsure situation. What is the actual cost? How will that be paid and who will absorb that? And so we're quite comfortable to move our tons domestically or other places. But I think as this unfolds, will it change? Will it be canceled? Will it be -- according to our European customers and friends, it's -- yes, it will be implemented. Yes, it's going to be confusing, and we have to get through 2026 to figure out that cost. The good thing about CF is we have low carbon product available today, and we're producing -- we will be producing in a few years, even lower carbon, 95% decarbonized which we will supply to the world, and we think we'll be advantaged into Europe with that product.

Just pivoting on to that point with -- outside of Europe, you have seen regulatory clarity in other parts of the world. So in Japan did move forward with the contract for difference for our partners so that they have their regulatory certainty for that project. So it's going to evolve over time. But as Bert mentioned, we're in a great position. We're a low-cost producer. We have the product, and we've got all the options to send anywhere in the world that basically provides the best netback. .

Yes. And I want to touch a little bit on that next. But I guess I'd heard similarly like product moving to Europe now is frozen because of this general uncertainty. So what does that ultimately mean as it relates to how European supply/demand plays out for this year? Is this just we'll figure it out and they get the product that they need or there is...

I think the risk for this spring is that there could be a short for that incremental ton that was not brought in for a period of time. But then as we go into the back half of the year, and the question marks around what is brought in, the timing around that because generally, we exported in June, July, August, September, October, November tons to Europe. So I think we'll see. And then as inventory built by the European producers in anticipation of an unknown. So I think it would be a difficult position today to be a European operator.

Yes. Yes. Clearly, [indiscernible] dealing with some existential stuff in that regard. But to touch back on Japan, to your point, happy to see that JERA and Mitsui were able to get the contract for difference because I think in that regard, candidly, your partnered very strong positionally for that. But we've also seen some comments just given the CapEx inflation. A lot of -- given -- through these blue and green ammonia project budgets, Japan might be spread across or I should say the amount of money they wanted to commit might be spread across fewer tons over time. Do you see this as a risk? Does that impact Blue Point 2 or 3 or -- because I know this is supposed to be an iterative project over time. And do you expect that the commitment from your partners might change?

I think when we look at the growth of ammonia demand of any color of any type, we do see that steady growth in ammonia. There's always going to be a place for low-carbon ammonia. It will be the first product that people buy because of the low carbon attributes. And I think you are going to see inflation in the -- and you have seen inflation in the cost to construct new capacity for someone with a large installed base of world-class and low-cost assets. That's not necessarily a bad thing. And it's something that we'll continue to navigate as we look at potential further development on the Blue Point site, it will be based on the demand and the economics and as those 2 develop.

I think for us, we're really excited with the partners that we're with. Both JERA and Mitsui are solid and have the -- this is all going to new demand and that doesn't exist today. So it's -- when you take the structure of 1.4 million tons, the 60% is going to Japan that is not entering the globally traded market. We also have a backstop for our in the U.K. So we are -- the inbound calls and meetings regarding Blue Point future is positive. And I agree with Martin, the 95% decarbonized product, you're not going to see many of these green plans move forward. And so green being 0 carbon. It's just too high cost, and it's a great idea until somebody has to pay for it. And so for us, at 95% decarbonized we have a lot of opportunity and options in front of us.

Yes. And the comments around the electrolyzer on the quarter, I think, speak to ultimately some of that. But I agree. Blue Point, JERA and Mitsui are highly advantaged as it relates to the access for the Japanese market. And kind of ultimately what is expected to be a pretty good sync for ammonia as we look at cogen and firing there. 2030 kind of more of the framework for when Blue Point commissions, which I agree, should be a better market. So as we look at this 15 million to 17 million-ton globally traded ammonia market, what do you think 2030 looks like? And is there a ramp there that's kind of consistent? Or is this going to be something that is maybe more of a back-end weighted demand profile as some of these other markets and ammonia ships or whatever come to market as demand?

So I think, Matt, we can all agree it's going to be awesome. But all kidding aside, but I do think what we've have been surprised with when we laid out some of the initial plans for how we viewed the market and shared them with the analyst side and the investor side, was in 2020, 2021, when we initially began our journey on the low-carbon future, was projecting what was going to happen in the market and the tightness at the end of the decade based on build-out based on demand, based on changes in the dynamics around low carbon. . The surprising thing today is how tight the market is today. I think from the analyst side and from your side, it's been something that negative is going to happen. It's going to happen, it's going to happen, and it just doesn't happen. It's going to be China this year. That's going to be bad. China is not exporting to the capability that they were. I don't think they're going to be. But it's this tightness of geopolitical upsets, whether last year was the Iranian/Israeli conflict and -- or lack of gas for Egypt. The continued conflict in Russia and Ukraine, lack of gas in certain places like Trinidad. That is driving more structural places that used to have guests who used to operate aren't as much, and we're in this very high cost of new investment that is limiting of the 120 projects that were announced a handful are going to get built, but they needed to be built just for future growth and demand and again, limits of where our supply is today. So we are in a positive market, and we see that tightening coming earlier than we had expected. And then at the end of the decade, probably tighter than even we had projected several years ago.

And as you kind of hit on this a few separate times, just CapEx inflation, right? Your -- I don't know, neighbor. But across the river, right, at Darrel, we're hearing about that. It's tangible. The CapEx budget gets revised up. Their plant is highly specific. But it's kind of the reality of doing business on the Gulf Coast and building plants in the U.S. So how do you manage CapEx inflation and the risks around it. And when you look at what should be ultimately is devised to be a pretty large complex, how do you go about limiting risks around that?

So for us, it started with doing extensive FEED studies to get more detailed engineering and more detailed estimates about what the cost would be. And then second, we went with a modular construction design for the ammonia plant, which is basically a turnkey. So the ammonia unit, which is probably half of the cost, is being constructed by Technip offshore and shipped over in modules. And that's a fixed price contract. So that element of it has been capped. And that does a couple of things. It reduces the amount of exposure to cost plus labor in the United States. It also separates the development of the site from the construction of the ammonia plant. So we don't have -- instead of them being in sequence, they're in parallel. So we don't have to pay as much overtime and spend the money to accelerate the development of the infrastructure of the site to then stick build the plant piece by piece on site because the plant won't actually show up until 2028. So it gives us a lot more time to prepare the site to receive the plant. And we will continue to look at those other components and do fixed-price contracts for tanks and other components that are on the development of the Blue Point side itself.

And I think one of the differences is this is what we do. This will be the third plant we have built in the last 10 years. And we built -- and we're operating those plants the -- the other 2 at 110% of capacity. So we're good at the design. We're good at working with our partners. We're good at estimating like Martin said, planning. And this is the core of what CF is about. And so we are very confident in our ability to bring it in at budget. .

Okay. Switching to Trinidad. I got a little bit of a flavor for this because I was talking to Ken about this morning, new government in Venezuela. Maybe that matter, maybe it doesn't. But if you were to think about the potential for gas moving from Venezuela to Trinidad and Ken's comments. Like it's always just in 3 years, we've been waiting for a while. But as you assess that region, does that change your longer-term views around the profitability of that production base? Or is that too early to say? What do you -- how do you gauge?

So we've been active in Trinidad for 15 years, and I was on the board probably 10 years ago, a PLNL. And it was -- in 2 to 3 years, we're going to have gas. We're now 10 years later, and we don't have gas. I think all of us on the island that are operating us, Coke, Yara, Proman are facing difficulties. And questions about what is the future, what -- can we count on, what level of investment should we have or maintain for those assets. Our asset at PLNL has been a good asset over the years. We value it, but we obviously need gas and need commitments from the government and from the NGP that NGP, NGC. And we'll see how that unfolds. I think Ken is -- was at the forefront of some of these decisions, and we're going to have to have those discussions as well.

Yes. I mean his comment was that in particular, they are pushing for higher gas prices. And sympathetic to the fact that Trinidad has its own needs as a country, but given the cost basis and the operation consistency of that region, it's hard to warrant gas price increases, right? And that's the standard that he's making. So do you face kind of similar pressures in that market?

So we are under discussion with that group of what the future supply and contract obligations are and -- but we're in the middle of it.

Okay. Gas cost, right? Martin, I'll put you on this one. It's like $3.20 in MMBtu in the fourth quarter. Very good. Lower than the Nutrient, even because then they have a AECO, right? And so how are you able to do this? And then look at -- as we look at 1Q, I think we were surprised a bit to hear about $5, $5.50 kind of range for the first quarter. There's always volatility in gas markets. That's just the nature of your business. But how is hedging playing here because it's not something that we typically think of for CF outside of basis, regional basis. But how is the ebb and flow? How did you get so good in the fourth quarter? And then what happened in 1Q? And is there any bleed out into 2Q in that regard?

I think when you think about how we hedge gas, we do like to take care of the basis so that we switch it from smaller hubs, down the -- Henry Hub was easier to manage the risk. And then we do tend to look at prices for gas that we're going to see across the winter, and we do that in various ways over the years. And sometimes, it's well in advance of the winter and sometimes it's much closer to the actual month of consumption. And that process yielded a really nice result in the fourth quarter. We were able to take advantage of the opportunities to hedge effectively and then see the settlement settle higher than that. And we've seen so far in January and February. You're seeing higher NYMEX settlements. We had a winter storm that basically hit on top of a NYMEX settlement. And so those settlements are going to be higher, and we will do our -- do well. I'm sure we'll do well against those benchmarks. But over time, our objective with hedging is to minimize the negative shocks of these events. And so we tend to be somewhere around or in between the what you've gotten with cash daily pricing or what you've gotten if you'd locked it in with the NYMEX settlement.

And Bart and I sit on the Gas committee, but I have to give a shout out to the team, with Marty [ Melk ] he's the guy who runs our gas group. But we're students of the -- we view those -- the product markets and the gas and the operations, they're all separate decision-making that come together as a whole. But we look at gas independently. We don't necessarily for forward sold, have to lock in the gas. And we do play a lot of the cash market during the year would -- has been at advantageous for us. But in terms of your reference to Q1 2026, this volatility is the word. We had $70 gas at the Port Neal site and $90 gas on the daily at [indiscernible] in Canada. So it has been incredibly volatile. I think the team has done a very good job of understanding that, covering what Martin talked about and being in the position that's good for CF.

Okay. I do want to open it up to anybody in the audience, if you have any questions, feel free to raise your hand and jump in. But I didn't want to ask a little bit on the policy side, and maybe this is -- I don't know, maybe it is, maybe it is an outside our real house bird. But if we were to think about the Trump administration, right, they've been keenly focused on farmer profitability, farmer sentiment, farmer affordability, nitrogen is maybe in the middle of potash and phosphate from an affordability perspective, right? It's not the primary pain point, but prices are high. So what do you get from the administration on that? Like are they actively in discussions with CF around capacity or tariffs or rebates? Is there any kind of discussion there? Is there any push. I mean I know you weren't necessarily listed between your 2 U.S. or North American peers as it relates to price solution, right? But it seems like the microscope is on nutrient companies and price. So does that resonates to CF at all?

A couple of things that you referenced -- resonates with me personally as well as professionally in the company. We're a global market. And we're the largest producer of nitrogen in the world, and we're less than 5% of capacity. It's produced in Russia. It's produced in the Middle East. It's produced in China. It's produced in India. It's produced in the United States or North America. And all of those places had the -- most of those have the capability to export. And so tons are moving all around, and they're priced at different -- for different products at different times, but the price in India today is basically the price in NOLA. And if India goes up, NOLA goes up because we had to call that import ton. We're an import-independent market. And so we have to incentivize those tons to move. And so it's -- and -- but in terms of fertilizer, you need NP&K plus some S now in most growing cultures. And so the fertilizer market is integrated in many different ways. But I think the point of your question is and where the government is going is the farmer. And we do think about the farmer and how -- one, how can we help them to have the product in position to be a low-cost producer, which we are a low-cost mover in supplier partnering with our retail friends the co-ops and the public retail suppliers to the farmer because we don't sell to the farmer directly. And that whole chain has to work together to be efficient, to be low cost, and to make sure the product is in place at the time it's needed, but it is a globally priced product.

Yes. No, I know.

I know you do, but I -- sometimes...

Sometimes I wonder about the administration.

It gets separated or an isolated issue like in Iowa, it's this. Well, pretty much you can do the freight, the price in Iowa equates back to the Middle East. .

Is there any push for logistical improvements then domestically? Like do you see talk or within a policy perspective about pushing for new pipelines or relaxing some of the restrictions that impact our ability to source barges?

So the work that's being done, we're a multi-mode company, rail, truck, barge, pipe, vessel. So we're moving product in any 1 of those 5 modes at any different time. So what the core of engineers does in terms of the lock work on the Mississippi, on the Arkansas and the Illinois, very important. . We need to keep that barge cost, and what the ADMs of the world do with moving grains and oil seeds down, we're moving fertilizer right back up. And so the pipeline, the Sunoco Pipeline is now 40 or 50 years old, if not more. And so proper maintenance of that -- the only existing ammonia pipeline is very important. And then it's very difficult to move ammonia by rail. So we almost don't do much of that, but the rail systems are very important. So this -- whether the UP hooks up with the NS or our work with the BN, that is a key component. So the low-cost delivery of the product is -- it's not just the production site, it's an integrated chain that we do focus on.

And if I think about rail, like boring, right? Nobody wants to move corn.

Any of the TIH, ethylene oxide, chlorine, ammonia.

So that was my point on ammonia. Is there some government restrictions around it? Or is it really just it's hazardous and corrosive and you just -- you don't want to move it by rail. And so there's like an implicit pushback from the rail companies themselves.

It's priced out more than just -- they still move it. It's just priced out. But we do have some very good relationships with our rail partners and need to continue to work on that as well as regulatory support to make the efficient moving of ammonia, possible. .

I'm happy to. Well, so -- I don't know if you have a question. We have one question up front. Sal, you want to raise your hand. But otherwise, get that hand up.

So since we're talking about logistics and might brought up the whole U.S. Gulf tons going to the corn belt. Can you give us a little bit more clarity? Essentially, if there is a plant on the U.S. Gulf Coast, what stops them from, let's say, chartering a barge that has the ability to be in the shallow orders of the U.S. Gulf and then going of the river. Is the cost prohibitive? Do they need to have access to tanks in the Midwest that they don't? What essentially stops them from doing that?

Yes and yes. One is when you're over in Houston to barge all the way to the mouth of the river where we already are as a cost. Two, is the destination point, where are you going to off load that barge where most of the producers have the tanks. So you need to build a tank or partner with those who do, and those tanks are limited. So I do believe some tons could in the theoretical move up into the river system, it just has to be coordinated with the receiving points and the barge companies as well.

I have one more, and I'm sure Steve has asked you this question every time he sees you. But I got to carry the torture a little bit now. I mean as we think about microbes and nitrogen delivery to the corn plant. Everybody is -- not everybody, but there's a lot of companies working on it, right? We'll have a biologic panel right after you with Corteva, Mosaic and Pivot. All 3 of them are working on nutrient bioavailability. So how do you address this longer term domestically, internationally and opportunity as a company who has made a lot of money with synthetic nitrogen.

Anything that's good for the American farmer, the world farmer is good for the system. And so yes, we follow it. Yes, I've been following for decades. It's always -- this is another one of those promises that is going to come in the future is just the future is always in the future. And so when that comes, and we have met with many of those companies and have exchange of ideas, but a plant is like a child and you feed your child daily. And then when they reach puberty consumption increases. And our corn crop is just like that. It has different growth spurts and it needs a concentrated form of specific nitrogen in order to reach maturity and to have a full head or ear of corn that's where the value sits is in that 1 year. Every plant produces 1 year of corn, maybe 2, but the second one is a dwarf. And so you have to -- if you're a farmer you want to use what works and what has consistently worked. And for decades, nitrogen has worked very well in that growth cycle. That's why we've gotten better at our precision ag multiple applications of nitrogen. And so we've gone from yielding when I was a young person, 130 bushels an acre to today, 180 bushels. That's the average, but you have some farms that are at 300 bushels of acre. That hasn't come with microbes, maybe that has supported it a little bit, but the fundamentals of our business, we produce a product that is demanded, consumed and applied in appropriate ways, and we're getting better at that. And so our future is bright for nitrogen.

Yes. Okay. All right. Well, I'll end it there. Bert, thank you so much, Martin, as well. I appreciate you coming out and participating.