Question-and-Answer Session
Operator
The question and answer session will be conducted electronically. (Operator Instructions) We’ll go first to Farha Aslam with Stephens, Inc.
Farha Aslam – Stephens, Inc.
Could you just share with us Joe your thoughts on pricing going forward in the chicken markets?
Joe F. Sanderson, Jr.
Pricing?
Farha Aslam – Stephens, Inc.
Particularly breast meat pricing and leg quarter pricing?
Joe F. Sanderson, Jr.
Well, we have more clarity about leg meat pricing. I believe pricing for February was down from January by a couple of cents a pound and March production is up about $0.05 a pound. We are fairly optimistic about exports for the year and pricing for the year and therefore, we believe dark meat pricing will be in good shape. As far as boneless breasts, which changes every day, I have less clarity about that than the export market but based on what we see today, based on the number of chickens that are being placed, and the egg sets of about 218 million eggs a week, that’s about the same number we had last summer. I would expect boneless breast prices today, with no cutback in the industry to parallel what they did last summer. With one exception, the month of August; we believe the price of boneless breast meat got higher because of heat, we experienced it down here for certain and most people in the industry did. So with that one exception we think we’re going to see something like we saw last summer
Farha Aslam – Stephens, Inc.
Do you anticipate production cuts in the industry?
Joe F. Sanderson, Jr.
Probably, yes. I think we’re seeing - the last information we got was from December, and during the month of December half of the industry lost money. We think January will be more people will be losing money then and based on at least the next 90 days we can see in grain prices, we think we’ll see a lot of people posting red ink. I think as a result of that we could see some reductions in production.
Farha Aslam – Stephens, Inc.
Okay. And my final question Joe, is could you just clarify, you’re on the market for corn and soybeans? Could you just clarify exactly what your hedge positions are?
Joe F. Sanderson, Jr.
We have 10% of our soy for the next nine months priced, 90% unpriced. We’re subject to the market there, and we’re basically 100% subject to the market on corn.
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