Roach: It's still a moving target. We still have wheat that is being produced around the world in the northern hemisphere. We had problems with the Canadian crop getting it planted, we've got problems now in Russia and we're pulling the Ukrainian crop down some. So, we're still at a moving target. Those crops are not harvested and in the bin and next week's weather will have an impact on what those yields are. So, we'll count all the numbers up but what we think is when we get done counting all the numbers that there will be an adequate supply of wheat. So, we'd like to sell aggressively into this rally that we're experiencing right now.
Pearson: All right. Let's talk about something else you mentioned on the show and that was this whole concept of the world deflating. The G20 meeting a lot of countries were saying they were going to aggressively reduce the size of their budget, that they needed to get their fiscal houses in order and part of that was a tax increase too which has certainly slowed momentum I guess you would say for the outlook going forward. There seems to be plenty of everything right now. We have this situation in wheat but oil seems to be adequate, oil stocks around the world from everything we can hear from sources we trust. We have enough carryout in corn so we can withstand some problems. Soybeans are our other commodities. What are you telling people about this deflation issue? What does that mean for a farmer?
Roach: Well, I think that farmers have experienced that before and under extreme circumstances you can, it led to a farm crisis before. I don't think we have anything like that. I don't want to do anything crazy. I don't want to think that agriculture will not have a prosperous next ten years, I think it will be very prosperous. But I think that we're going to have periods and I think we're into one of those periods where when we have profit opportunities we need to bring them home. Where we closed December corn for 2011 delivery and December corn for 2012 delivery for producers who have good fields, good soils and good management technique there's $800 an acre gross lying out there and that represents significant profit levels and what's important for producers in this environment is to recognize when they have good profit levels available they have to bring them home.
Roach: Those profits don't come home automatically and if you've been farming for any length of time at all you know that profits can very frequently disappear, that the optimism and the enthusiasm can disappear and be replaced with a dismal price level. So, we think it makes very good sense in this kind of environment to reach out further, lock in profits further than you're used to doing.
Pearson: All right, so you are not afraid at all of moving out, particularly in wheat. What about in corn and soybeans? Are you looking at 2011, 2012 pricing there too?
Roach: Absolutely. That makes just very good sense to us. Most producers out there have bills that they have coming due in 2011, 2012 and beyond and so all we're saying is take a look at the revenue that's available and reach out and start taking percentages of that revenue home.
Pearson: I know you've talked in different venues about taking advantage of those inputs as well. If we do see a deflationary move perhaps fertilizers, perhaps some of the input costs could be down and those should be taken advantage of too.
Roach: Well, the people we talk to think the price levels on inputs for next year will be very much a steady kind of a situation to only slightly higher. We don't see any kind of substantial price increase at all. So, we're very patient buyers of inputs right now and looking out forward now thinking it's more important to be selling output and worry about the input side a little bit later.
Pearson: All right. John Roach, our senior market analyst with us this week on Market to Market and, of course, right here on Market Plus. Before we go I want to remind you Market to Market is available on your local public television station. I know a lot of people are picking us up now on the Internet, which is great. But if you'd like to pick up the live version of Market to Market on your local PBS affiliate all you have to do is call your local public television station and say please run Market to Market. We can run over the weekend for your edification on your local public television station, not just benefiting producers but certainly making an investment in people who are watching and concerned about food issues and the food supply. So, if you would like to contact your local public television programmer ask them to please run Market to Market on our local station. You'll be doing yourself and your agricultural community and the non-agricultural community a great service. From all of here at Market to Market, I'm Mark Pearson. Thanks for being a part of our show. See you next week.