Pearson: Welcome to the Market Plus segment here at our Market to Market Web site, Mark Pearson and with us this week two of our senior analysts, Walt Hackney and Doug Jackson. And Doug, you started the show so Walt I'll start with you on livestock. You're pretty excited about this fat cattle market. Now, it hasn't been a great start to 2006 and you were talking at the end of last year that we'd see some pressure in here. And now you think some of the pressure is off?
Hackney: I do. I don't want to sound overly optimistic, Mark, but this market that tried its best to break this week it wasn't successful. There is more usage of the dress beef than what is being reported. And the tonnage at 600,000 cattle a week is not an excessive amount of cattle or beef and so our feedlots are more current than what people have wanted to give them credit for. Granted, if we went through oh a week, maybe ten days of low kills, of 110,000 to 115,000 a day we'd back into an inventory that is probably going to be near overdone. Phenomenal performance in the feedlots. But we've marketed so aggressively that we've kept pulling cattle ahead. And that has worked to our benefit as cattlemen and as cattle feeders. Packers, on the other hand, have lost a lot of money. And anything that can be done to reverse that psychology as in this week it will happen. So, we've got to be careful at believing all of the hype that comes out of the market going to go down or whatever. Today was the classic example, everyone hung tight, waited until Friday, packers finally starved out, needed cattle, they stepped in and were bidding three to five higher than yesterday.
Pearson: Yeah, so we finished this week on a very high note and like you say, we're not in a position where we've got a lot of over finished cattle and we're not stuck in a line out there. We're looking really good and we've also had a great winter for great gains as you pointed out too.
Pearson: Man, we'll take it. Now, the weather is another big issue here in the United States. It's also an issue down in South America. And Doug Jackson, everything we're hearing is good news coming out of South America, crop looks good. Is there a dark side down there that we're just not hearing that much about?
Jackson: Well, we still have to bring this crop home and we may still have some dry weather, Mark. But 80% of the areas had good rains and it does not look like a repeat of the rare back to back drought of the last two years. But one of the -- the marketplace is still somewhat intrigued by the idea that prices are holding up better than expected. You had a lot of people forecasting $4.50, $5.00 beans and here we are really on the threshold of March 1st, harvest in South America a record supply of beans, 11 million more tons of beans in the western hemisphere, a 550 carryout in the United States and yet we're not really breaking. And one of the things that's going on here, Mark, is that we've seen such a radical change in the competitive nature of South American bean production, we've seen estimates just this week that just the trucking cost alone to go from the growing northern areas of Brazil to the southern export port has gone up $1.25 per bushel in the last two years. Now, that is just one of the compounding problems on top of higher fuel driven fertilizer costs, much higher cost of spraying for Asian rust, everybody has to do it in Brazil, they have to spray two or three times. It has added a dramatic cost, increased production cost. And all of a sudden what we're seeing here is that they have lost their competitive edge versus the United States and these prime northern growing areas where acreage expansion has been in the last few years. All of a sudden we're now at a price where the cost of production in northern Brazil is really above what the bids are today. So, the long-term, Mark, we need to satisfy a growth rate of over 7 million tons per year of demand in the western hemisphere. And that requires amazingly 6 million more bean acres every single year. We don't have that acreage expansion ability in the United States, we've got to get it in northern Brazil. The bottom line is with the cost of production increasing so much down there you have got to keep prices at a level where South American agriculture remains at least marginally profitable. You can not bankrupt South American soybean producers and obviously expand the acreage we need. We can't live with stable acreage; we need more acreage every year. So, that may put a floor under these bean prices higher than anybody suspects.
Pearson: Alright,boy an interesting angle from South America. Doug Jackson, thank you so much. Walt "The Bull" Hackney on this cattle market, we're hanging right in there, good to hear that. Thank you gentlemen both. Hey, be sure to join us again here next week. Tell your friends and neighbors to join us here at our Market to Market Web site. For all of us here at Market to Market, I'm Mark Pearson. Have a great week.