Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Edlain Rodriguez - Goldman Sachs.
Edlain Rodriguez - Goldman Sachs
Jim, quick question for you. What gives you confidence that DAP prices will remain at those levels, despite the decline in the one or two years?
James T. Prokopanko
What I would suggest is the focus needs to be on margins, not on sales price. And that’s what’s driving our bottom line, is the very strong margins we’re seeing. So although we may miss, and could possibly be wrong, with what our sales forecast is, we’re comfortable and confident in our margins, that we see input costs go down, the drives that reduce sales price, we still see good margins in this business.
Edlain Rodriguez - Goldman Sachs
In the factors that you cite and Mike cite, some of them that result in the softness in phosphates right now, which ones are more concerning to you, which you think of these are likely to persist for a while and which ones do you think is just a temporary blip?
James T. Prokopanko
What is the most concerning? Well, we’ve got to watch what is happening with grain prices and returns to farmers, and that’s going to drive final use numbers. Less concerning, but very real, is the bulge in the pipeline stocks, and we see this as a bulge in the pipeline, not a reflection of actual farmer use.
Operator
Your next question comes from Donald Carson - Merrill Lynch.
Donald Carson - Merrill Lynch
Jim, on margins, which you rightly noticed the focus here, your call on sulfur was pretty good, because it has come crashing down, at least internationally, what kind of a lag do you see, though, for sulfur pricing coming down in the U.S., given that there is still some tightness post all the refinery outages?
And then a couple of questions for Mike Rahm. One, if fall fertilizer applications fall a little short because of a compressed season, can you make that up in the spring?
And then secondly, in terms of, you gave us your acreage outlook for corn and soy, you know, corn margins are still above soy but in a world of constrained credit, soy takes a lot less working capital. I’m just wondering what impact that might have on the acreage balance next spring?
James T. Prokopanko
On the sulfur prices, we have quarterly contracts, as you know. We have just concluded our third calendar quarter, July, August, September. We are negotiating with sulfur producers, they have not been prepared to capitulate on the price but the world prices that we’re seeing reported to be down as low as $400 and some unreported but stories of $200 sulfur prices being posted. We expect that that will start hitting our production facilities over the next three months, [ac novem dies] when we conclude our fourth quarter calendar contract. So it’s around the corner for us.
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