Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Mark Gulley of Soleil Securities.
Mark Gulley - Soleil Securities
Good morning guys. I have got a couple questions regarding the emerging corn franchise you are developing Eric. It seems to me like you got a solution for corn farmers on all their acres. On the Bt acres you are going the tertiary and with secondary insects and on the refuge acres you are going after primary. So you got a message to all corn farmers for all corn acres. Do you use it that way or are the ways to apply the products a timing of what products that you will actually use? So different that you think of it as two different opportunities?
Eric Wintemute
Well, you are saying refuge and yield enhancements are two different opportunities?
Mark Gulley - Soleil Securities
Okay refuge and what we call the Bt acres [inaudible] 80% acres and also for the 20% acres.
Eric Wintemute
Well I think there are different approaches and the targeting in different manners, but obviously the two go hand in hand. I mean, what we would see as ideal is a grower with this SmartBox system putting full rates down on a refuge acre and putting down maybe less than full rates on the rest of these acres in order to get a yield enhancement boost there.
Mark Gulley - Soleil Securities
Secondly, with respect to pricing, it sounds like promotional expenses will have to
ramp up some more this year, combined with raw material costs. What kind of price increases do you expect see this year to fund both of those areas of cost pressure?
Eric Wintemute
The corn soil insecticides we did increase pricing on those. I do not have an exact percentage of what average but I think we were somewhere in the 10% range. Impact I think we kept relatively closely, we had a moderate increase, I think it was less than 5% as I recall.
Last year we had some pretty strong increases, at least for us. In advertising we ran 25,000 radio ads with Impact in order to get awareness across. We are certainly moving the budget up a little bit this years as we are trying to push the initiative for the enhancement yield. But we have other companies or seed companies that are really pushing the refuge message which we expect to see benefiting from.
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