ANDE Andersons

John Kraus Director, IR
Pat Bowe CEO
John Granato CFO
Farha Aslam Stephens Inc.
Heather Jones Vertical Group
Eric Larson Buckingham Research
Kenneth Zaslow BMO Capital Markets
Call transcript
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Good day, ladies and gentlemen. And welcome to the Andersons' 2017 Third Quarter Earnings Conference Call. [Operator Instructions] I would now like to introduce your host for today’s conference, Mr. John Kraus, Director of Investor Relations. Please go ahead, sir.

John Kraus

good the and earnings Andersons' and joining you call. Kristi for us third you, morning, thank everyone, for Thank quarter XXXX

discussion. We will slide a today's have presentation provided enhance that

webcast, of many call independent prospectuses are statements you're the of prepared the the forward-looking Act in If company's company's today Investors in actual This conditions both the being supporting the page and is conditions, factors, shortly. United our could discussed including differ the offerings. completely filings and Today's publicly webcast States presentation and information, constitutes a filed auditors the made described slides have the via competitive in documents, financial will and including sync. its that economic slides commentary result be weather, Certain will results and viewing 'XX information and in the and from factors the industries, be company's it conditions, the at reviewed. presented those in with recorded, which company's website internationally, forward-looking includes our available not on as statements connection general materially in additional

interest, to Reconciliations to financial results we Although give and generated depreciation we it income release are by and access is is for measure use measure today’s accompanies that the upon period-over-period the of be information the is before our operations. to presentation in and pre-tax a financial amortization This from found cash tables these taxes, or our remarks to to Adjusted comparisons, are slide of accurate. within meaningful assurance the our the assumptions GAAP may company be earnings assumptions of statements prepared appendix and non-GAAP deck that the EBITDA earnings our flow use presentation. reasonable, which of primary believes forward-looking a compare period-to-period. believe no the measure its non-GAAP and this can measures. investors financial the that based it measures will contain prove

impairment second our We net we calculating from the in core the is representative income, adjusted of both operations EBITDA. related have our excluded fertilizer pre-tax charge when income and to took business measures, not as ongoing believe wholesale we it quarter adjusted adjusted

call the Executive Pat, Bowe, today Officer. Granato, and John Financial answer me On and your will I with our are after Chief Pat Chief questions remarks. Officer; prepared John

over to comments. Now his Pat I'll floor turn the opening for

Pat Bowe

of results. review everyone. John and quarter third you we’re groups our our for Granato XXXX by a conclude the our our strategic you progress providing to for Thank year, some remainder a XXXX. on see four viewpoints our this initiatives. joining comments Thank look I'll provide brief and After will good the prepared business for making business John morning on give the I’ll you, morning start remarks with about of to outlook our what call then and into some review, beginning each we’re

not results anticipated. quarter XXXX third as quarter Our little third our strong were results than but as better we

incurred we markets, to to show number forward more don’t typical toward high margins year-over-year were the happy progress At very any Ethanol the challenging current some years. period. the compared a lower see a in margins continue near-term work we’re crush earnings Group expenses our continuing to to Grain recent unusual addition range. In during and level, improvement

recovery. a slow persistent just to buying market time in in Plant continue and Rail Group fertilizer continues oversupply to farm the Nutrient markets ride margins. Group The For compress most

carrying to in Our underlying positions charges grain continuing grain are fundamentals wheat. ownership business in continue enjoy our We to improve. remain with grain results comfortable wide and

low. cap and good only carry-outs exacerbate market XXXX will oil supply which a like soybean can volatility looks it into harvest and prices it far XXXX So corn and and both

by of affiliates grain our was year-over-year last DDG margins issues Ontario production demand in profitable continue significant were were vomitoxin to lower despite international values. Canada our the both our driven to DDG stocks. Therefore results industry year-over-year worse business deflate which conditions due for challenging little higher Thompsons. in and Our Weak

opportunities would volume to We value if The which X% these typical when took continue Rail typical be to ton performance coproducts slowly quite third recovering in the canceled XX%. per The Low aggressively Wholesales off an suppress lease legal look produced continues during for gain oversupply we we Business right was seems the slow car quarter. season a margin farmer third it's and was for but improved the a up is nutrients. group. higher but also was rates. demand nutrients to difficulties, for such down year-over-year market to Nutrient opportunity pressuring not quarter continue added prices Notwithstanding but have quarter value charge. for settlement be Plant

quarter expected we rate. again approached of our third As a rates quarter it ago the utilization sequentially XXXX and rose

the buy market. We cars secondary continue to in

Those sale the on cost of you and on that and at are older all productivity gain the culture including of at like cars mostly million. of netted our sold store efforts, the retail our and value. solid initiatives our We’ve a sales to savings some rail one properties, looking are related scrapped experienced setback repair repair sale retail also two add. I of adding profit. shareholder of to update others zero the expenses $X.X some ongoing the rail repair a facilities. the underutilized during to achieving to combined several quarters closed safety We another at the properties consecutive incurred totality four harm several systems sales After others We our business and facility quarter potentially of we key also quarter. growth, and during refresh opened tragic store

currently last expect progress efforts second which other by on to fourth the the We're in productivity under expect The and we $XX a of to culture. million We're good savings the still making We XXXX. to rate to reach XXXX. one end are continuing our goal close sell. two quarter contract one in our create run

and us During as reduce and more implemented terms payment control, as a procurement consolidate we time system well payables mange will quarter, effectively. expect accuracy which companywide improve processing spending help and the the of indirect new we

Our Group we system perform continues refresh Grain first plan go broader our IT and locations with next year. to the live the early Nutrient in to well of Plant wave

We also notwithstanding continue and harm to vigorously safety dividends. are paying tragedy culture those quarter's our efforts zero unfortunate this

results. each our some about up. and thinking later is injury now Granato will and lower remainder detailed in for to metrics outlook improve to recordable of about John about I'll call you XXXX Our XXXX through more years that the shaping speak of time our ago. financial our how with two compared XX% lost continue of will also provide the review walk

John Granato

morning million. income improved company's taxes, business. million million share. depreciation diluted $XXX XXXX XXXX of In diluted XXXX net results generated and These or company of were when share the and EBITDA income everyone. revenues in the Pat income reported result the year-over-year of also attributable to than our its Earnings include per from associated or on $X.X $X.XX with the or $XX $X.XX retail Thanks before $X.X quarter income million exit third million third $XXX interest, net Andersons XX% per The revenues $X.X pretax to good of better of million. amortization by quarter the in quarter third

lower our year to X.X:X. somewhat at Our long-term basically ratio unchanged last equity debt than is is this and debt at time

and year. the and bridge due third Group's quarter to Our we down but when XXXX quarter, following than a We car of expense adjusted impacted for consecutive offset comparable capacity settlement soft having $X.X present engineering third legal results project occurred compare better by cancelled quarter for million fourth Grain negatively nine in pretax on In a pretax remaining entirely pretax in income. driven X.X:XX relates year-over-year growth. of as income softer result is for Maumee potential target income Plan storage repair results reported recorded property. million of ratio that for the year-over-year so and and preliminary first the quarter. sale work. XXXX were a also two the results leasing it by the have store expense that properties. a income former Rails were process other more by fatality business improvement improvement results the was the capital our the next of $XXX,XXX nutrients August graphs to gain of the two again almost were Retail expenses our selling sale compensation strong months an in margin income resulting Ethanol's to the $X.X We're from workers primarily repairs.

are same period improved ending other slightly down income. results not XXXX the XXXX. XX, $XX primarily lower results Each are Ethanol's For due than September if would from the again be months to million more year-to-date year-over-year compared the by improved for but businesses nine Rails to storage the business. potential strong the to XXXX of are store in grain in to difficulties the properties and capital results recent The we comparatively the slow in lower almost business. leasing helped year close incurred offset earlier. start of to half write-off sale base cost the former repair retail primarily project I two noted due to

related are Plant results to quarter, charge. resulted Notwithstanding shared goodwill for event business million charge, the a in Nutrient a As the $XX you group's triggering its with we that the wholesale had the even somewhat last impairment which each in lower nine the on wholesale, lawn farm cob. are first but centers months sale the and better for for region of year-over-year after southern adjusting fertilizer, gain

will in Our units carrying a the the adopted value new By we definition you value the second standard new the fair goodwill and early when estimated quarter, the take under standards. are goodwill equal. charge, goodwill analysis accounting of impacted

be to higher the interest number including profitability the capital. of fertilizer is capital will a cost lower goodwill our cash analysis trends Approximately variables macroeconomic on of annual business and balance as of fourth related or flow million sheet the The XX, control. XXXX. to revenues, remains general projected also business $XX.X analysis such September subject or quarter to As rates of group's working sensitive outside and wholesale

review units. of our move four will Now a on of we each business to

The good million continued over pretax the sales XXXX. the income quarter period quarter. the income pretax income on modest same during volatility income margins group's Our XXXX. in the Grain and for $X.X of Stronger pretax drove a compared improvement saw corn $X.X to $X.X third Group million was the compared the third what million of to quarter year-over-year in the second in quarter. pretax of market of third There to reported real Grains in improve million wheat $X.X Group quarter storage of in we earned performance. the income

well legal pretax $XXX,XXX volatility affiliates, that year. quarter for income current quarter period Margins of of $X.X and of in XXXX quarter of million short they was ethanol to limit results Grains not for in be of same continue for Thompsons its due to $X.X group dampens negatively $X.X both to combining export results also Plant were value. The pretax strong issues. lower in loss corn trading to the group's attributable than of the quarter margins. production to income low margins quarter to third period design Continued did last quarter. same engineering $X.X due $XXX,XXX loss project. their in planting loss third attributable of million the lower affiliates. The continues a to higher Belt The company average lower DDGs demand determine in work third negatively to and did spite results to Group engineering selling. so million expense lower trade pretax recorded million due $X.X the Thompsons results this expense negatively company and group performance the project. in settlement there group abating to the the also million move the on of be of Eastern Plan with Nutrient fell our group criteria the and on vomitoxin capital third by to of compared by XXXX's income did The the million well group fare exports. not in earned Group's farmers lower us compared forward potential Based Ethanol investment were behind inventory results stressed XXXX Corn settlement not nutrient's preliminary for a the well impacted we no the by pretax be trade the $X.X by that group. impacted project to impact a With a will the third which opportunities tends a $X.X as pretax impacted further primarily capital XXXX the DDG believe studies quarter. and pretax to million primarily continue meet occurred the The decided

cob down In nutrient farm $X.X by demand improve a both of were by of of Margins to nutrient quarter posted $X.X to were margins down need somewhat the increase fertilizer in volume. generated margins center margin return lower and X% pretax contrast XX% was relatively of to Base balance better Continued million and per we the last products. groups compared some spite up quarter We impacted begin farming in of were wholesale before income product in see lawn per year. better due ton. and volume oversupply business Group persistent XX% third supply income a negatively in to third this year-over-year compression appreciably. million by Rail believe oversupply were the drove results. each down smaller ton. by performance business year-over-year and portions Value-added X% tons

of which which for group quarter. quarter utilization income the the to of sales down car results. Our XX.X% still the last million and XXXX. year's be earned produce from offset was and slightly recorded income million to last $X.X lease cost pretax compared rates up $X.X We of slightly XX.X% and base for income was quarter third full averaged of utilization up Lower in the from pretax from Average were rates that lower $X.X maintenance result. X.X% X.X% third pretax the than below year-over-year. million to sales the rate mostly leasing by quarter were last lease car million XXXX income quarter XX.X% year The expect comparable XXXX in higher $X.X

move more year below the than The is workers actively scrapping compensation and with cards difficulty to this group's about them by However, to mostly some timing can the average managing and so underutilized down conditions. purchase remaining have other expectations year-over-year. cars. X,XXX sales The quarter transactions I efforts incurred of expenses business quarter. business encountered our earlier. improve group were The of far repair fleet your older combined fleet. X% the of allowed life mentioned repair Sales also These

I Now business of certainly potential a describing in XXXX. we want significant minutes to for the and one headwind see spend couple rail one

manufacturing some the of normal the The based of dates tank is of car first our maintenance two result the required fleet. on

in every XX The accounting costs extend or in $XXXX North our the estimate of recertify America recertifying various beginning tank they cost and care XXX Department about upcoming as car cars the will in of to the to be tank from XXXX of Because we plan up incurred. the these extend a per don't or to The X,XXX Rail service they XXXX must call. $XXXX as cart of average second Group's on from cars inflammable Regulation than service depending Tank its fleet much about life the expenses that of XX% result effective comes the in changes per $XX,XXX range running years manufacture. recertified any date all. standards. of cost We about frequently factors. cars make in on can whether no of not tested requires integrity inter-chain have less its tanks Transportation

disproportionate Over acquired Group built that the in last the were XXXX ethanol several Rail has in boom. number response tank of years to the a cars

the As many XX approximately which car There in are million tank year recertification a in will XXXX be even than year result $X higher tank need currently be half bubble other this expense rail of in cycle as XXXX. recertified. its to cars

under longer revenue on may over income of our These has for car the qualify half year transactions beginning engaged or and statement The time of sales $X.X has in and rules. standards years revenue average as of the has become new of group standards an beginning the of recognized Financial released the for pretax pretax income. Second new recognition company Accounting over recognition these Standards many sale you no from last of four the sales transaction respectively. the Board XXXX the Certain effective XXXX almost car per accounting group for million at know leasing.

to We Group. between Rail evaluate the a interplay new the rewrite them to rules application as these continue the of and

these important earnings for or lease of flow has that earnings XXXX accounting to However, is thought the its capacity revenue early no statement and not may and transactions time note nor it of implications but from recognition. timing comments these generated income on geography earn change of call outlook impact XXXX. impact now on value Pat the for rest fleet our turn for total and the I'll the arrangements a over the does to to over few this some back on cash

Pat Bowe

John. Thanks

selling all was that Grain While The other of Low year-over-year harvest dampen well business continue XXXX. set there good its for in although is to grain looks on volatility now as another the has quarters. consider moving grain in trading three solid followup or we opportunities. like our to consecutive grain to up achieved influence four prices improvements income low hitting what behavior prices farmer earn groups begin fall to the and concerns prospects with an may low some Group storage volatility crop. continue We're cylinders

the behind dry While corn we're XXXX normal seeing in quality harvest our high is crops areas. robust its pace

More higher kind production through are rapidly produce of on seasonal our we continue continued specifically began about remainder in Group the really margins the working quarter our to early good the demand oversupply, We is in in running Nutrient due September XXXX monitoring late results farm to about an mid rebound ultimate XXXX. but XXXX pace supply fourth lead and which for driving decisions could very XXXX July move summer strong rest despite than still has Ethanol XXXX concerned little years. is all combination That to making better rising spot and quarter most results to unusually of fill to the XXXX. and expect production industry though margins deliveries margins and rose decline throughout of began ethanol. The to customer into expect of demand, patterns. grower well. hard balance storage that the and in and be the efficiency harvest into of In program demand, four out plants quarter quarter to income half earn low and impacted to that a industry by an had of last income. been prices a fertilizer slower toward Group continues persistent needs of fourth normal low unfavorable demand to stabilize processing to The buying more of conservative said We the

to Rail continue the of long-term in believe in for nutrient looking value this sector. supplied continues impacted opportunities by the strategic We growth to be and market. over business an are value-added

some is it look in will utilization to there signs our rates gradual. continue While be of slow of very recovery improvement the like are progress

expenses two of As be lower challenging be XX% total will in million will John one-year XXXX cost tank a run end XXXX of year than in XX% XXXX two of to XX% on initiatives with work combination XXXX. our changes estimate estimate XXXX would targeted our earlier savings to make higher rule these the certification In continue rail for XX% we and results than productivity the absence of a but by we the rail. rate with changes accounting our bubble $XX XXXX. these to results competitively We'll issues,

savings and end many work by but the results since closing of of be to the the of company disappointing on run rate goal to on are continue with fronts. million In taken undeterred more XXXX to XX% $XX way improving undaunted that to-date expect we our out beginning cost more XXXX. in than XXXX We

the income XXXX. quarter we be While Overall by causes concern fourth as recovery three XXXX. has think we comparable each our into see pretax of we business four look to will XXXX of for grain groups other groups for strong a experienced those

about market will expect at continued improvement year. Grain given conditions other XXXX our are appears least from We three to face see for the it feeling cautious prospects Group in but for groups early the our

AM be to I'll website. over an remind beginning I'd presentation will it listen holding back webcast questions, Investor turn over Thursday, call December our Day we in. will invite your operator The to back on like that the be to turn questions. operator for X. I also everyone you entertain live Before the X:XX to at our on to We


question is Aslam [Operator Instructions] Inc. Stephens from first Our Farha of

open. is line Your

Farha Aslam

a or being year. fourth the should that is strong I improvement the harvest to benefit we quarter of for have up mind they've late. about should from first first but on a half benefit think some question Is or Group, coming quarter the in year-over-year in Grain be more harvest earnings next seen going your

Pat Bowe

a belt up. would be our same nice we that the that and advise five as out projects rainstorm doubt slowed across belt the really so all mentioned We last days had Western in Eastern you crop strong especially really started rain pretty things

reported So Ohio, was Michigan XX, we Indiana in corn, numbers for example harvested XX. XX% the at yesterday at

of today. do so So we got here a to but bit a got looks to work beautiful sunshine quite outlook the we be, day XX

your So the to part year. question being numbers the similar pretty we’re as of about see far main three last but two we to behind weeks as

Farha Aslam

longer-term And potential I exports and think that that group how ethanol bit develop the first Mexico on fourth quarter looking then can question and a opening you will for be do China? and market knew into but further in up and with quarter XXXX out challenge particularly perhaps a ethanol,

Pat Bowe

the pretty that fourth remember We pretty see we finishing had that because year mentioned soft robust to quarter year compared margins. here last last a specific quarter we

new confirmed market about note quarter reported for shipment next there year don’t had the India, has highly and they’re the quarter talk Canada, of China of chatter actual just these were yet. has lot ago. in a export both of time also XX% the been into year all Brazil market about XXX% some now said aren’t margins but X% get till hedged of but into been into a the you the as but there Going business coming those we we’re There a in is the rumors in of going about aren’t lot third the balance

really have in about is So be good value Europe. in ethanol the low interest seeing octane market thing and the see is U.S. positive world’s we of we’re the one to

that’s if it the and XX up is So to pace producing would going XX much domestic year, be be pace keeping that without like at what higher at pick ethanol. going to ethanol it the this so get because record key that’s we’re margins hard to

So we into lean cautious tend we’re to opportunities in XXXX. if going opportunities hedging margins bit ethanol about little a QX into margins but arise

John Granato

is Year we XX going production but look at if billion kind yet gallons XX.X not year that run of over the next rate for of of we gallons, billion XX.X see year. billion north

So significant some to exports see we’re some we’re as Pat soak out going some forward demand in capacity to alluded any capacity – to need going ethanol come additional that need domestic into up changes going barring XXXX. otherwise


of Heather is Vertical next Group. from Our question Jones

open. Your line is

Heather Jones

So just total I so or you’re QX per of ethanol XXXX of have you quick QX question, in talk number gallon a being dollars? to detailed about when really referring for XXXX half about

John Granato

dollars. total Pretax

Heather Jones

grain you XXXX versus is of when about you the correctly? rail ethanol, are you XXXX say and talk about, fertilizer that XXXX understands so you be down versus to and expect talking And with exception you

John Granato

see Rail that expect there Well talked year for they that about XX% I we second so about as it rest as the Pat year relative see kind the see. Nutrient basis And Also if Plant year and in to need planting of to forward key of improvement you and down the the would are into think that look we quickly probably that's into nutrient of so although we again incomes supply XX% is unless farm we in probably we that the coming getting and balance where a are don't grow pretty at so of on last highlighted some years XXXX. made year going year's particularly think recognize would be and about farmer low we talked demand wait really XX% second to half we buying in to is look to I just about headwinds quarter. our and ethanol headwinds the I pretax are we continue think as then the pacing. given margin impacting fixed given this so prices the we talked Pat low that as pacing nutrients the income in here say I season

So again not business the group seeing not improvement other a initiatives expecting the lot take for of has that some out but taken. necessarily clock either than potential erosion in of in

Heather Jones

So hard there you’re just caution look at if of I’m when because robust be and expectations set I completely if having telling this by are to a that time nutrients not you trying out notes had or the improvement but some wet imagination there stretch pricing I any appropriate things taken have about the get from of leased sounding weather per capacity been that your and to soil. comments has been nutrient in and have seem some pricing

XXXX. time seeing flat I really in guess XXXX I with hard that’s have So a

And just so middle am of just we’re missing? this things in flock in - part because of I your the it’s on is so lot caution what just

Pat Bowe

rebounded despite when see corn our these are extensive of products The last here fair at higher see is nearby like do be which you’re in don’t since some observations sales we but tough year margin you fertilizer that's making business value-added commodity farmers think I We have XXX the in kind rebounding are corn the would to grain prices year. applications. sale interest that off-season. don’t really value-added question experience strongly places prices some cheap that more the of said we prices there

some prices fertilizer the our year. we a across do pretty board. we decent, been was happens in has this seeing hurt if the optimistic not reductions the capacitors here major but pricing something said but better that we’re rebound just but a just stability have been reset from about can Margin marketplace that good volume as barring you in of Our prefill slightly margins get could be

John Granato

I so the look I move settlement there add the should business that you it the obviously noted as doesn't bit taken the out where year legal was and you business just have about significant that severance core I expected going to look as we of we’re see cost in at not like help feel guess but if of from this this some is does recur it a when talking I we improvement. up margin structure at were little you’re think business the to

Heather Jones

to going the life the unlikely to the sounds correctly that in over recertification it it’s way with expense And different like so rail you - cars expense, if see average another your understood this the I you’re year of the years. going much next side XX

those unlikely going nonrecurring of treat was and or analysts expense to 'XX? how in out to recur so that each gut will given call So most quarter 'XX that are it my as is much you

John Granato

I was relative be we to $X point material if what the prior determined we it quarter XXXX. I we quarter, to that noted million relative would again guess out say to a But particular you. to about would certainly to year's it think was

Pat Bowe

to comment XXX them it - for And we of that but that have chunk about tank can’t we sorry - are ethanol car cars $X,XXX John cars fuel kind have a a also next - cars, cars roll tanker mentioned. be any but cost certified cars, veg of and we I’m our big impact of this the in had these XXX we will sweetener estimate on we as balance certification just so year around total isn’t

we to So those that when got we're mainly big a have going is quarter quite back that all came onboard won’t forward. boom big any there year ethanol bringing chunk in cars a out the bubble we because this

John Granato

be and we recertifying the the depending next about let tank there important was to felt it bubble is maybe edge now we million-ish have headwind on I and cars to it for think is and that $X guess are that and way well everybody age transparent know what is so these just here we year.

Pat Bowe

we not to each and should So number Heather from maintenance normal go a back expenses quarter unusual large at one time. cars anything

Heather Jones


Pat Bowe


Heather Jones

issue question how did and next - has or problem a quarter on of that the the - that during harvest few one just was lasted final is that a an in Two they quarter the issue quarters? with much headwind have

Pat Bowe

is harvest so Well harvest question ongoing their still is on and is that PVD. the

John Granato

if here down successful right things season Eastern in factor the here borrowing levels so up and in in similar for at space. filling rain Ontario finish they experience to the big it’s so fertilizer belt had as Ontario similar harvest down sure is us did we not make Very to off harvest a up than good we’re big

Heather Jones

the handling was the in issue the quarter the was quarter There in or fertilizer issue handling? commercial

Pat Bowe

a but of we’re number just bit bit not little big It’s Yes, of of behind year. both, little previous pace a both.

Heather Jones

is the is And project on were my side up question that follow capital walk decided you you to this ethanol away from? what evaluating

Pat Bowe

in over and successful implementations been we’ve speak. seeing years of three last new when ethanol juice or technologies of technology many the to so various up Yes, couple four at looking more squeeze

in had earnings we our at more can protein and project extensive We also engineering total capital the have a extract and We our build work on the been cost pretty expectations. then summed We did at we didn't pre plant how for value quite looking to as it make mind value-added coproducts. that. up done and just the

that and take for opportunities down to and sold project interested still ethanol pre-engineering to we had the thus bottom-line. we value that implement to charge the continue there the we’re look coproducts to our up road add during expenses We quarter. the also very for technologies can to is So

the and returns by team continue we I technologies prudent our to just off would we’re it was didn't we So to ethanol have to thought to liked add the look because call wasn't project. for going new unfortunately project see payback the the there


Eric is Buckingham from Larson of Research. question Our next

open. is line Your

Eric Larson

a how pretty questions are you would kind year returns look I numbers which the how it at mean corn you do what strictly planting that look out the about. know next obviously at still still you that of settling is the I all these matter we next at have the one belt couple perspective for but guess year kind we income of you doesn’t for penciling just farm think about look from at screen out? have know XXX it for year, tough. to pretty questions matter talking really is 'XX a is tough I of happens Just you planting farmer at How next I talk you’re

Pat Bowe

it’s time carrying our bean sending board and across interesting a so not ratio up it's performers low acres prices for and percentages of the think probably and if to I as could would we corn have its the normal kind Yes unlikely signal this similar we have bought in have just corm that is but corn see not exports think plant think early so I shift corn. be we major been you fair

on versus U.S. seen challenge and corn companies corn. on were down talking a almost the X.X we little the some year about these of think market we’re billion grain big last of I So to exports you’ve bit export XX% bushels so X.XX at

and and tough Chicago of So keep corn are not of short the it’s we those that so both weak relatively probably farmers income. XXX, kind subdued just with here and market about situation and selling prices stiff a at will don't and Kansas price City in it's for have

John Granato

world the other makes it’s really everybody way. tough for and volatility Yes the volatility that

Pat Bowe

much wildcard year crop here expensive bankers influencing wildcard point corn but out it planting, think like going this I feel a noted at is Eric doesn't significant is more you’re stat generally to there. will put in I to is other think how the one as next shifts get in obviously see involved but

Eric Larson

getting getting of running really more bankers spring we’re it have, quarter are more on and what amount I benefit been quarter closer the help close you assuming us have XX% the tax from the be involved now couple texts year-to-date but the you pronounced. to the the year-to-date? that through am will a is, may of mean years question mean I be maybe kind running are of am that in final I getting this to normal. Can are I income not carrier, the wheat may The think we’re I rate markets benefit your the tremendous guessing I last

John Granato


think on text Chicago next one year We two I into trips year. continue and throughout read keep - the we’ll the two

DC is some pressure under you because selling spreads the markets spread come smart. $X.XX and week $X.XXX about nearby to look wheat is nearby $X.XX If be at a little narrow bit

beans on So the earlier to or about year the was have it noted windup wheat than XX% properly lesser and closer full ended spreads XX%. you XX%, corn so of that’s where this that carry

be think hang wanted and carries is wheat for to back next move probably onto year throughout the going give into to ticks to opportunities out good maintain we confident there and to we’re year. two and So pretty the whole


BMO Our of next question Zaslow Kenneth from Capital is Markets.

is line Your open.

Kenneth Zaslow

so not the way? get think Just the continue trigger ticks that next year the going to other with you you’re

Pat Bowe

still depends we one kind at how of wider the bit time think year, of wheat two the course play the we’re but given more out back thought maintain it spreads through now wheat the I right is we’re as lose here. ticks carries. the might loss global spreads on through see some so there moves like that two is have spreads wheat so we as to reason so We spread no we’ll it narrow trading shouldn’t to we'll as to of go burden one And think supplies relationship thinking go year we be normal at one possible

Kenneth Zaslow

that it or income a lose there tick, do - an where bid then to if able something to that lose And d that you from offset or is else? just income because the in ops you’re you the the is

Pat Bowe

This purchase are white to wider Virgo you domestic to grain. weaker maintain markets through where business coming the I sales carrying the we market decent we of also said for part sales into carrying that if game right and is it’s on charges charges now. Yes at but up the margin opposed grain store wheat us for as but export good these differentiated wanted some sell having that can of all end the margins kind

although see into like more to and throughout or that’s little So some to year the opportunities. if volatility come we trading side a markets income space create continue things maintain that we’d one positive

Kenneth Zaslow

I question now last of guys you couple have the years, state and plants more like have of ethanol a a built in of philosophical kind over overcapacity. we’re

As that your and there there you level about a production you you look reassess think that? how is be back do that would or how production think would do slowing point down a in decision about right time changing think you and do

Pat Bowe

year a Albion now we one looking in Mexico Canada Going overall has to China, the our provides that’s good the back in again. expanded about do Europe opportunities countries we is is not industry investments and can. for built again today’s on good that spot as the we but Even plant It and plants opportunities for our there see really optimistic just be answer and margins that so in would plants we the export nearby, back the did also we market yes ago good return ethanol better our of Brazil grow feel to a would going African margins. right continue in in nearby

enhance And forward and think so we the to think going grow new there opportunities that. and ethanol is production export is part markets like of of be going to for methods to I technology we

strong for in ago it business. be downs has margins not the as you still we’re the and this as of Ken we’re that good cycle know year think were have very ups current it we always a as positive could all and industry we So margin

Kenneth Zaslow

do export do change markets tax any the that’s I do for to if there be to export do compensate loss environment that think what and think much compensated you was a obviously on going there from? XX% how think will lost Then going next about you have value in us Brazil be it’s market year think you the you think where they value will and

Pat Bowe

And expensive then in we we good what solve production costs do a one I that. be good or would don’t we've said with declares by something the - less number about are imports do halt to of back pollution to that’s are plants, sense, are China taking key think slow idling they’re we to methods to our when optimize and way margins that past. good slowdown the production forecast in to in pushing opportunities it's a of watch big and slow is hard That and be all little about part Brazil talking problems positive big that complete not we one. specific could good. and the as materials good when it we as one production but for using using time know you when practice the throttling as back a heard used more more make when that by their margins seem I doesn't probably China in margins hopes the ethanol to are like for

Kenneth Zaslow

would - to question final my the they be work need export would their core to clarify, went supply they XXXX that their policy so China able is come to And that own inventory country not they inventories if that and using the down their just on EXX market? for

Pat Bowe

so you ever to a to in what happen right, will a market growing is the not built need if EXX it’s heck capacity optimism certain lot would but because is an on versus and at there export to time. China the I do U.S. didn’t question you the does Brazil the Yes, import big XXX% then ethanol of think But have is a economics so you’ll how market. look


John back for call for session remarks. like Mr. Thank today. you. conclude Q&A I’d any that And to does further turn our to the Kraus over

John Kraus

again slides I Thank additional and will information today with you morning. this Kristi, be joining and presentation want you us. for our to later this for thank that on us available the page want supporting Investors you thank mention made of We also joining to all

Eastern We hope time. AM well. Our us to fourth XX at when full-year for next Thursday, join XXXX then earnings XXXX conference again at results. be call is Until that quarter you're and review scheduled our February able we'll XX,


program Ladies Everyone conclude in gentlemen, today's you conference. a day. may today’s and participating disconnect. does all thank you for and great This have