1. What’s Ahead For Nitrogen Fertilizer In The USA? Kim Polizotto, Ph.D. Chief Agronomist PotashCorp

2. Nitrogen Fertilizer Sources Anhydrous Ammonia……NH 3 82-0-0 Urea…………………………CO(NH 2 ) 2 46-0-0 Ammonium Nitrate………NH 4 NO 3 33-0-0 UAN………………………………… 28/32-0-0 Ammonium Sulfate………NH 4 SO 4 21-0-0-24S MAP…………………………NH 4 H 2 PO 4 11-50-0 DAP…………………………(NH 4 )HPO 4 18-46-0 APP…………………………(NH 4 ) 3 HP 2 O 7 10-34-0 Potassium Nitrate…………KNO 3 13-40-0 Slow Release-Controlled Release N 43/44-0-0

3. What Drives N Fertilizer Markets in the USA/World? Manufacturing Technology/Capacity Cost World Markets Transportation Storage Convenience

4. 1997-2003 Nitrogen Market Driving Factors Record increase in world nitrogen capacity China’s ban on urea imports Collapse of the Russian ruble High U.S. natural gas prices

5. Source: NYMEX Monthly Closing gas prices NYMEX Natural Gas Prices $US/MMBtu pth1rs: Data from “T:\Audrea's shared files\For Al Perpetual” pth1rs: Data from “T:\Audrea's shared files\For Al Perpetual” $9.13 $4.43

6. Source: PotashCorp Fertilizers, Feeds & Industrial Sales Fertilizers Fertilizers & Explosives Industrial Sales Fertilizers & Industrial Sales Solid Urea UAN Solution Ammonium Nitrate Nitric Acid Ammonia Nitrogen - A Simplified Flow Diagram Natural Gas Anhydrous Ammonia (NH 3 ) Carbon Dioxide (CO 2 ) Liquid Urea (UR) Prill Tower or Granulator UAN Solution 28-32% N (UAN) Liquid Ammonium Nitrate (AN) Nitric Acid (NA) Prill Tower or Granulator 33.5 MMBtu/ton 0.22 t/t 0.29 t/t 0.80 t/t 0.35 t/t 0.45 t/t 1.01 t/t 0.78 t/t 0.58 t/t 1.01 t/t

7. Source: Commercial Fertilizers US Nitrogen Consumption as % of total Percent of Total N Tons Consumed

8. $ per lb N pth1rs: Data from Bloomberg pth1rs: Data from Bloomberg Comparative N Prices in Corn Belt

9. Nitrogen Prices N Fertilizer Wholesale Mid Cornbelt Price * $ per ton $ per lb N Ammonia (82%) 300-315 0.18-0.19 Urea (46%) 215-225 0.23-0.24 UAN (28%) 136-142 0.24-0.25 AM. Nitrate (33%) 185-195 0.28-0.29 AM. Sulfate (21%) 135-140 0.32-0.33 * Green Markets, Dec 15, 2003

10. Longer Term Outlook U.S. natural gas prices are expected to moderate but will remain significantly above historical averages. This will likely result in: Increased reliance on imported N Further consolidation of the U.S. industry --Industrial ammonia suppliers along Gulf Coast likely to close and rely on imports. --Some urea capacity likely to close due to increased offshore competition Tightening world balance and access to large domestic market, however, will allow bulk of the industry to remain competitive.