Martin: Well, I don't think we strengthen too aggressively. We might come back and test the $1.16 level on April futures again but one thing that I see and it's in hogs and it's in cattle both. If you look at your April contracts they are sharply higher than the February contracts are. In fact even in hogs you're just tremendously over the price of the index and so what that normally would do is it would hold livestock back with the thought it's going to get marketed into the April futures. So, hedges get put on those April futures and then they allow the cash market to try and come up to it or one comes down. So, that may happen. So, the April contract could teeter here. It could kind of float but in the meantime I look at the summer months on out and especially in cattle the fall. The fourth quarter should be phenomenal. I think we're going to see new all time highs again in cattle and we could see one on these December and October cattle even into the February of 2012 and April 2012 we're very tight supplied and I don't see anywhere where there's going to be a bigger supply. The only thing would be is if we started importing meat into the U.S., that probably would come out of Brazil, but to kind of help slow down this price assent in hamburger that is affecting so many young families and we've even had to move into other cuts and grind them just to have enough. So, the demand has been huge but we aren't going to have a good supply. We're going to be very tight supplied. Feeder cattle supplies are going to get tighter sand I think that with the world in growth beef demand is going to stay good. So, I think over the course of this year, latter part this year and on through next year, we're going to have some good times and there's better times yet in this market.
Pearson: As we go forward and you also mentioned export demand for our products both beef and pork. We're seeing a huge move there. You also talked about the fact on the show that June futures were higher than the April cattle market which again these are things we just don't see very much.
Martin: That's right. That's very abnormal at this time of the year and I think the market is trying to tell us something. I think that what it is saying that there is an attitude that they don't totally maybe believe the USDA numbers. They think we're going to be tighter supplied sooner. Maybe that will happen - we'll see. But right now I have hard time being too aggressively hedged in futures. What I would do is maybe look at put spreads underneath. You buy a put, sell one out of the money to help cheapen it up a little bit, and then you got to manage the one you sell. That might be a way of flooring yourself in case but I don't see anything really to be a disaster to our meat market unless all of the sudden we start increasing imports and I just don't see that and the export picture still looks good.
Pearson: Hamburger is three bucks and from what we're hearing from retailers at least up until the beginning of last week they were clearing it.
Martin: Yes, in fact back in early January we were hearing of two major national food chains that had actually already booked their advertising clear through the end of March. So, they knew what they were going to be buying at and what they were going to be offering in the store. So, it's kind of an interesting time.
Pearson: Yes, very much so. Ok, wheat, corn, and beans, what you talked about on the show, again with one of our longer segments, every thing is on a hair trigger Sue and the questions I pose to you now, I posed to you on the show is what could cause the other shoe to drop? What could make this thing fall apart? This still is essential as the old boys would say short crop has a long tail. We haven't seen that tail yet.
Martin: No, we haven't and I think that part of it is going to be tied to the world buyer. These countries that are very concerned. You know this is the first time Mark that the Chinese have had to worry about competing against everybody else. Before they kind of had their way with the rest of the world because it was plentiful supplies, but this is the first time now that they've had to think about competing against the other countries that are very worried about their governments being overthrown because of high food costs and also the fear of not having enough. And I think that when we look at this, you know, there's been some concerns, some voicing coming out of Mexico, we're upset about the price corn, Mexico had a frost, you know, they're going to replant what 700,000 acres of corn. But, you know, it isn't - it is just not taking much of anything and everybody's - are a little tight. Seems like we have some pretty decent supply right now of rice but what's going to happen is as other things get too high they're going to turn and grab what they can get that's cheaper and of course rice is a commodity that is that way and as long as wheat keeps holding its own and corn, rice is going to come into play. In fact we've already seen Japan change feed rations to where they dropped 50% corn down to 30% corn and moved in rice to replace.
Pearson: And I think last time you were on the show China had just substituted corn purchase and bought some feed wheat. So, they're going to - you're right they're going to move rations around.
Martin: Mark there are some true really interesting numbers here out of China. You know if you look at in 1985 China used 2 1/2 million metric tons of corn for industrial usage. By 2001 they were using 10 1/2 million metric tons. By 2004 that doubled to 20. By 2006 it went to 40 million metric tons. Then you talk about their feed usage and just last year into the end of November that increased 31.2% from the year before. And you've got COFCO saying by 2013 they're going to increase their feed production by 6 million metric tons a year. And then you've got CNGIC saying well, by 2020 that they intend that China will be processing for feed 250 million metric tons of corn and that is another 100 million than where they stand right now.
Pearson: That's right and they've got a drought in their key corn growing region in 2011. Sue Martin these are amazing times. Thank you so much for your insights. We appreciate it and for all of us here on Market to Market a quick reminder of the fundraising period for public television is coming up. If you enjoy programs like Market to Market, if you find value in this program, please be willing to open up your checkbook and share with us as we go into that fundraising time period we really appreciate your support, your calls, your emails, and of course your support during the fundraising period for public television. So for all of us here on Market to Market I'm Mark Pearson thanks for joining us. Have a great week.