Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Arnold of Piper Jaffray.
Mark Arnold – Piper Jaffray
Jim, could you maybe just talk a little bit... you mentioned the milk and beef prices down 50% and 25% respectively here in recent months. Can you talk a little bit about what’s happened just in the last couple months of the quarter, it’s a big deep price drop and that kind of happened after you guys gave guidance in September. It looks like that’s come back a bit. Can you just talk about the trends that we’ve seen in both of those areas over since your last conference call?
James C. Robison
Quite frankly we’ve not seen anything that’s encouraging to us to date although we do see indications that it will become feasible to place calves in feed lots and just get profitability based on hedging strategies. The dairy men are losing pretty substantial amounts of money as milk prices have come down much more quickly than their costs of operations would allow them to be profitable and we see activity. Creameries are working to accomplish a $300,000 to $350,000 per reduction. It’s probably or would have to be financed out of the normal means. That would obviously affect prices.
We also think that we’re seeing a problem in the beef business. The middle cuts mostly served at the high end, choice, and prime markets have been off substantially and thus prices have been down for fat cattle. We think that will turn around as well, but it’s been one of those situations where it precipitously got bad and if you will running sideways right now. In the beef business, most of the close downs are around live cattle are losing between $200 and $300 and the break even numbers in the dairy market are generally in the $13 to $17 per hundred weight range with milk prices below $10. I think creamery prices are more in the $10 to $12 range. So a tough situation there as well.
Mark Arnold – Piper Jaffray
Just one more comment on that. Are we starting to see maybe some normalization of or balance of supply and demand, maybe just at a lower demand curve in say the beef markets or do you still think we have a little bit of ways to go before we reach a little bit more of an equilibrium point?
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