Hormel Foods Earnings Call Nuggets: Jennie-O Results and Export Business
Ken Zaslow – BMO Capital Markets: Just one housekeeping question. When you said Jennie-O’s improved results will be improved in the back half, is it sequential or year-over-year?
Jeffrey M. Ettinger – Chairman, President and CEO: We are talking year-over-year comparisons. So for the first two quarters clearly significant drops from the prior year. As we had indicated when we headed into the year, we knew last year had really strong commodity turkey prices in the first half of the year and we were in a much more beneficial position in terms of grain costs both in terms of the actual and daily cost and with our hedges from the prior year. So we have dropped nearly kind of $18 million a quarter year-over-year for the first two quarters. We expect that to improve significantly in the second half. Getting back to even and then gaining as the half proceeds.
Ken Zaslow – BMO Capital Markets: Then my bigger picture question is, can you talk about your input costs and your ability to price for the Grocery Products business and how you think about that going into the back half of the year but also going into 2014?
Jeffrey M. Ettinger – Chairman, President and CEO: We don’t have any 2014 pricing relating guidance yet and we certainly – it’s sort of a franchise by franchise approach when it comes to the Grocery group right now in terms of costs. I mean it ranges anywhere from pressure we are getting in costs on beef and chicken related items to frankly the pork side costs have been fine. We’ve had favorable avocado costs. We’re new to the peanut butter business, but we’ve had favorable peanut costs thus far. In terms of announced pricing actions right before we closed on the deal, we did follow a price decline on peanut butter and so that’s enacted in the marketplace. There is no further pricing actions that we have at this time on that franchise. We did take a price increase on HORMEL COMPLEATS. That was the first one in several years. We wanted, I think as we’ve talked about in prior calls, wanted to get that franchise humming again, get the right marketing support, get the right product mix and we’re happy with what the team has done in that regard. So, we just have now coupled that with sort of a catch-up price increase on that item. But at this point, otherwise, we don’t have any broad pricing actions in store for Grocery Products…
Ken Zaslow – BMO Capital Markets: So, the volumes should be relatively at historical levels. There wouldn’t be any dislocations with volumes throughout the next, call it, six to 24 months we could say?
Jeffrey M. Ettinger – Chairman, President and CEO: We have really great momentum right now on Grocery. I’m expecting very solid results on both the top line and bottom line for Grocery for the remainder of the year.
Christine McCracken – Cleveland Research: Jeff, you said that you had really strong margins on your export business and it’s a bit curious given some of the trade interruption that we saw in the quarter and I’m just curious if it was a delayed response if that product had already been sold or if those markets to Russia and China just aren’t a big deal for you?
Jeffrey M. Ettinger – Chairman, President and CEO: It’s more of the latter. I mean, we’re really kind of a niche player when it comes to exports. We tend to sell more of the off all based items when it comes to fresh pork. Clearly, SPAM is also a major export component of our overall portfolio for International, and in that case, those margins of sales have been solid contributors to the growth that International has been providing.
Christine McCracken – Cleveland Research: And are you anticipating any retaliatory action on this COOL legislation here – I guess, the deadline’s today – in terms of Canada and Mexico and what that could mean to your overall pork market?
Jeffrey M. Ettinger – Chairman, President and CEO: Well, I mean we’ve been supporters of the American Meat Institute and other trade associations’ articulation to our government that we really felt that a modification to the Country of Origin Labeling Program would be beneficial, frankly, to us as well as the trading partners in North America. It’s kind of hard to read whether that’s falling on deaf ears or whether there’s going to be at least some progress in that, but in terms of retaliation, I don’t have any greater sense, Christine, I guess than anyone else as to what might happen in reaction to that.
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