Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Ken Goldman – JPMorgan
Ken Goldman – JPMorgan
On your confidence level in the amount of pricing you’re going to get in currency this year and I’m wondering how much have you locked in if at all some of your exchange rates through hedging and how much, I know you talked about locking in a bunch of pricing, but how much of that really is still up in the air if you do get a little more pushback from retailers and from some of your industrial partners.
Alan Wilson
In pricing, our pricing is pretty much in place for 2009 and obviously we’ll see what happens with input cost pressures to see whether we take additional pricing or pass through reductions to our industrial customers. If you recall the contracts that we have with industrial customers, we take positions on major commodities and then we pass those through either up or down and obviously we expect later in the year as commodity costs decline to be passing some of those things on. That’s all factored into our guidance.
Gordon Stetz
From a currency perspective we hedge only the transactions that we need dollars for, mostly on our commodities that are dollar denominated that we buy forward. The guidance that we have provided on the FX impact on our net sales line is a translation impact based on current exchange rates and we are not hedged so to the extent that rates move either up or down from there that could effect that guidance.
Ken Goldman – JPMorgan
Cheese obviously has plummeted in the last couple of weeks, that’s factored into your guidance, just wondering maybe you’ll have to pass on, take some higher cost in the near-term without being able to pass them on, if you could talk about how that might help you or hurt you in the first quarter.
Alan Wilson
Specific to dairy as you can recognize we’re managing positions on different commodities based on our view of where things are going to go. We shouldn’t expect to see a significant impact based on a short-term change in commodities because of the collaborative agreements that we have with customers to manage positions.
So what I’m saying there is for the most part we’ve talked to our customers, we’ve managed a position and as prices changes over time we’ll modify pricing with it, but the customers agree with the position that we take and we’ve priced based on that and we factored that into our guidance.
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