Roach: Well, we think that the cost structure that we're moving into -- this isn't a one year deal. We're moving into higher cost structures probably for an extended period of time. We think that requires really good management, it requires good solid marketing and being very careful because the government support is so far underneath where these current prices are that farmers could get into some really difficult financial positions in a real hurry should something come along that would knock the prices down.
Pearson: We've got federal crop insurance for production purposes but some price insurance out there obviously if you're stepping up and you're paying big bucks for cash rent, you're paying big bucks for all your inputs and you can sell maybe soybeans, guarantee yourself $11 on soybeans historically we know that's a good price.
Roach: Well, the prices are certainly good and what we also know is that the people that are buying our products principally livestock producers, most of our grain goes through livestock, both soybeans and corn. And the livestock producers are slugging it out, it's tough, it's tough out there. And so people want to point forward and Goldman this week said that we're going to have substantially higher prices and so forth and so farmers tend when they hear that to back off and say, well, I'm going to wait, I'll wait a little longer and see if the prices will get better. But we have to be really careful because the failure to do a good job of marketing in 2008 could really be an expensive proposition. We saw this happen before in the 1970's, the farmers got all excited and everything moved up and the costs all got high and then something happened, production gained and the demand slowed a little, prices slammed down and it caused the farm crisis if you recall. We're setting up a similar situation and the only way to make sure that you don't get caught up in that is to do solid marketing. What we're suggesting to people right now is the time to put your marketing plan together, we sell in increments. We'd be selling the old crop inventory in increments. We'd be selling increments of new crop inventory. We try to sell on peaks using sell signals to do that. And as we get into the latter part of the spring those bushels we don't want to sell forward we're going to use put options to put a floor underneath of the price so that in case something happens that we just don't have a disaster on our hands.
Pearson: I want to talk about soybeans for just a moment or focus on soybeans for just a moment. And when I look at the soybean market I look at those very strong prices out there and for that matter the wheat market and what's going forward. And I want to buy some insurance, the option strategy is still by far the best strategy to do that and even though my house, I paid my home insurance and my home didn't burn down I still had the chance to live in it, even though you're hearing this talk about soybean prices into the mid teens or $20, who knows by December of 2008 what the price might be.
Roach: Well, and we can't control that price. That price is going to be controlled by the people who are buying our products and all you have to do is talk to a friend of yours who is a livestock producer and they'll tell you what is going to happen if we have those higher prices seen. We will lose demand in following year at the same time we ramp up our ability to produce more. Not only that we're giving a signal to someone else we can't control and that is the South American farmer. There are literally hundreds of millions of acres down there that can be pulled into production if the incentive is right and my suggestion is that this is a pretty big incentive those folks have down there now. So, we could end up looking at acreage increases this next fall enough to satisfy lots of this world demand. Now, I know a lot of people say well that's not going to happen, the Brazilian farmer has this issue, that issue. But you know what, farmers are pretty resilient. I'm betting the South American farmer will figure out a way to plant a lot of acres and I'm betting the United States farmers will do everything they possibly can do to take care of this shortfall.
Pearson: I think you're right. So, prudent business decisions as usual. John Roach, always great advise. And thank you for being with us on market plus this week. And from all of us here on Market to Market, I'm Mark Pearson. Have a great week.