Pearson: Welcome to the Market Plus page here at our Market to Market Web site. I'm Mark Pearson and we go through these volatile times in the corn and soybean markets and I'm telling you what, it gets people's attention. But the livestock producer, he's been on a three-year run. If you've been a cattle feeder, if you've been a cow/calf producer, you've been making some money in the last 30 some months, Virgil. Looking out ahead it looks pretty good. I look at those deferred futures contracts, there are some pretty good dollars out there.
Robinson: Good point, Mark. You know, with the nearby futures contract and cash discounted to those deferred cattle futures now allude to October and December in particular. It's been my experience in the years around the commodity business that an incentive like that, a premium in price like that has a tendency to encourage more tonnage, finishing cattle to bigger weights and I don't think there is anything wrong with that, Mark, provided producers understand those contracts offered them a hedging opportunity should they choose to do that finished cattle to weights that are unusually large, for example. Again, I think the market is in position to sustain the low to mid 80 dollar live markets given what we know about the export situation and assuming it doesn't change in the near future, Mark. The U.S. disappearance just remains very, very strong and the government is projecting per capita income, excuse me, per capita consumption to grow again this year to I think 120 pounds per person. Well, that is big demand and as a result I think we can sustain that mid 80 dollar live cattle market. But please be advised if you're growing cattle to unusually large weights, look at those deferred futures for hedging opportunities and guard against and defend against the unforeseen, which might mean another issue with BSE or another health issue in the market and the prospect of growing pork production in the third and fourth quarter, Mark, there will be plenty of meat available.
Pearson: You made some comments on the show about getting hogs hedged, maybe taking a look here if they get those deferred contracts there and it's the opposite scenario.
Robinson: Yeah, there is a lot of pork, Mark, and the recent cold storage report showed a nice draw down month over month in pork inventories but year over year pork inventories are very large and if production grows like forecast during the fourth quarter, assuming even disappearance remains strong, we're going to have plenty of pork. And I think it's important for producers to realize that if we get the opportunity to protect something near $48 live in the third quarter of this year and something near $45 in the fourth quarter, I think those are viable hedges and I would take advantage of that, Mark, given the supply situation we're talking about here in total meats.
Pearson: It's a difficult situation when you're looking where prices are now but when you're talking about being defensive I think it's what you want to consider. Virgil, as usual some great insights. Virgil Robinson joining us this week on the big show, one of our senior market analysts and wow, we appreciate him joining us here on the Market Plus segment, as well. From all of us here on Market to Market, I'm Mark Pearson, have a great week.