Market prices for both corn and soybean meal have remained high and volatile and I expect that trend to continue through this fiscal year and into next year. The March Planning Intentions report indicated a move away from corn to soybeans. In addition, recent planning progress reports indicate that the corn crop is not getting into the ground as fast as usual. This fact will contribute even more volatility. The volatility in the grain markets does not surprise us, and I believe the conditions are such that there remains a significant risk of feed grains going even higher through the summer. Any weather event anywhere in the world this summer that threatens the yield or quality of this year's grain crop could trigger a run up in the price of grain, as could any event that results in even higher crude oil prices. With respect to soy bean meal, the planting intentions and planting progress reports indicate a tight supply of soy bean meal as well. Like corn, price for soy beans have risen and we expect continued volatility in the soy bean meal market. The bottom line is that our feed ingredient costs will be significantly higher in fiscal 2008 than during fiscal 2007.
Needless to say, SAFM wants chicken prices to higher.
The restaurant industry does not!