Good day, ladies and gentlemen, and welcome to Archer Daniels Midland Company Third Quarter Earnings Conference Call. My name is Regina, and I will be your operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Mr. Dwight Grimestad, Vice President of Investor Relations. And you may begin, sir.

Thank you, Regina. Good morning, and welcome to ADM's Third Quarter Earnings Conference Call. Before we begin, I would like to remind you that we are webcasting this presentation on our website, adm.com. The replay will also be available at that address. For those following the presentation, please turn to Slide 2, the company's Safe Harbor statement which says that some of the comments constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Statements are based on many assumptions and factors, including availability and prices of raw materials, market conditions, operating efficiencies, access to capital and actions of government. Any changes in such assumptions or factors could produce significantly different results. To the extent permitted under applicable law, the company assumes no obligation to update any forward-looking statement as a result of new information or future events. Slide 3 lists the matters we will discuss in our conference call today, and I will now turn the call over two our Chairman and Chief Executive Officer, Pat Woertz.

Thank you, Dwight, and good morning, everyone. Thank you for joining us. I will begin with safety. Through our third quarter, we reduced our lost work day injury rate by 33% and our total recordable injury rate by almost 10% compared to the full year fiscal 2009. Safety remains an important priority for us. Turning to our financial results. This morning, we will reported quarterly net earnings of $421 million or $0.65 per share. And this third quarter, the ADM team did a good job managing our large flexible origination and processing network to meet global demand. On the growth front, many of our large projects are finalized, and the rest are wrapping up construction. We competed this quarter our startup of our Columbus, Nebraska ethanol dry mill. We began shipments from our renewable plastics plant at Clinton, Iowa. And we are commissioning our propylene glycol plant in Decatur, Illinois. And construction of our Cedar Rapids, Iowa ethanol dry mill is on pace to wrap up this summer. I might also note that yesterday, we took possession of a seventh ocean-going vessel, the Harvest Rising. On the policy front, the EPA is considering a request to allow increased blending of ethanol up to E15. A positive decision on E15 would lay the framework for improved demand in the future. However, with an E15 waiver, some significant challenges to widespread adoption would remain. We believe, as the RFA [Renewable Fuels Association] and others do, that an increase to E11 or E12 would be an additional, easier to implement next step on the path to E15 and future higher blends. We're hopeful this is the pathway that EPA takes. Now I'll turn the call over to Steve, who will review our financial and segment results.

Thanks, Pat, and good morning, everyone. Turning to Slide 5, we list out our financial highlights for the quarter. Segment operating profit for the quarter was $696 million, up $442 million from a year ago. As a reminder, last year's segment operating profit number included a loss of $212 million, reflecting our share of currency derivative losses of our equity investee. In a few minutes, I will review results on a segment-by-segment basis. Quarterly net earnings were up $418 million from last year's break even third quarter, and earnings per share were $0.65. Looking at our effective income tax rate, we've reduced our estimated tax rate for the full fiscal year to approximately 27% based upon a more favorable outlook of geographic mix earning. Therefore, we reduced our tax rate for the quarter to about 22% to bring the year-to-date rate in the line. Last year's extremely high tax rate for the quarter included a $97 million deferred tax charge related to changes in the holding company structure of our equity investee, Wilmar. As you can see from the waterfall chart for the quarter, on the bottom left of the page, we've called out a couple of items. This quarter, we incurred an after-tax charge of about $47 million or $0.07 per share related to our recent long-term debt repurchase where we bought back $500 million in higher interest bonds. Based on current assumptions, this buyback will save ADM about $0.01 a share after-tax each quarter ongoing interest. LIFO had a positive impact this quarter of $27 million after tax or approximately $0.04 per share due to falling commodity prices. Turning to Slide 6. Slide 6 shows the quarter and year-to-date summary of our operating profit by segment. You'll note that for the quarter, each of our segments showed an…

Thank you, Steve. John Rice joins Steve and me for the Q&A. So operator, if you would please open the line for questions.

[Operator Instructions] And your first question today comes from the line of Vincent Andrews with Morgan Stanley.

On the Corn business, particularly the hedging and sweeteners and starches. Can you just, Steve or John, help us understand a couple of things. One, what caused the hedging loss? And can you separate out the mark-to-market impact from the ineffective hedge accounting? Help us understand what that is, and perhaps tell us if any of that's going to reverse in future?

First of all, we use a variety of instruments to hedge our corn position, and accounting rules dictate how they're treated on a mark-to-market basis or for allowed hedge accounting. But we use a mixture of accounts that are brought to market and our effectively used hedges. And to complicate that even more, we have to evaluate the corn future hedges for effectiveness, as defined by GAAP. So we've got a mix of that. And in each and every quarter, we have some of that mark-to-market and we've had some this quarter, we had some last quarter and some of the year ago quarter. So the results that we saw, some of that will be pushed forward, and some of that is essentially offsetting some numbers from prior periods. But we won't break those out specifically just because, as you can tell already by this explanation, there's a lot of moving parts to that. But overall, it was a significant amount of the variance between last year and this year came from those types of items when I look at sweeteners purchase in total.

So there's no way to get at sort of if x all that stuff out, what sort of trend level of earnings in that segment we?

I just think in general, we would not have been too far off of last year's quarter once all those things wash through.

My next question relates to corn. I've heard from multiple sources that as it relates to your new plants, there's a service stepup initially in corn procurement costs that you're experiencing, because the local market is unable to satisfy the needs of the plants at the prior prices. Is that even remotely correct?

I hate to say it's not somewhat remotely correct. We're always trading corn throughout different parts of the would, different parts of the area. But to say that corn cost have gone up in that area just because you have new demand, that statement in itself would be true. To say that we're paying more than anybody else in the market, absolutely not.

No, I didn't mean to imply that, I just meant that the there's -- you're maybe paying more than you'd like to -- well, the whole market's paying more than it'd like to be paying. Is that fair?

The market's the market. All it does is move from maybe corn that was coming from Eastern or Western Nebraska is now going into Columbus, as opposed to being shipped someplace else. And we're taking trains from another area, taking them up down to the Gulf or on the West Coast. So it's really more of an arbitrage than anything else. Our model of it hasn't changed.

Your next question comes from the line of Christine McCracken.

Pat, I think you mentioned that you hoped EPA would go to an E11 or E12 blend. And clearly, that decision is coming hopefully over the late summer. Do have an early read on whether or not you're going to face any difficulties renewing the blender tax credits at the end of the year, and whether or not they're considering lowering that?

I think from what I understand and have talked with members of Congress on both sides of the aisle and the administration, it seems like there's an understanding of the importance of ethanol to energy security, the environment, job growth, et cetera. I think the renewal of the ethanol tax credit is on the horizon. I think it's not likely the extension will be approved until the latter part of this year which is [indiscernible] (38:45) comment. But I'm encouraged by the commentary. So we'll have to wait and see.

Are you worried at all with the timing of the election that there could be some trouble as there has been with the biodiesel extension?

I think it needs a vehicle to be extended. But as I said, I'm optimistic that people understand the importance of it. And particularly in this blend wall environment, it's important to have more ethanol used by Americans.

And then just on the biodiesel tax credit, it hasn't been extended. The industry is struggling. Obviously, oil demand, as you mentioned, has been down. Any chances that would get back [ph] (39:31) or passed in this calendar year? Your insight into that would be appreciated.

Obviously, less states and less volume are involved when you're talking about biodiesel. But I have still optimism that the credit will get extended if it has a vehicle, again, to link itself to.

And you'll probably read the same headlines we do on this. Right now, it's maybe going to be passed by the end of May. But as Pat mentioned, it has to go on some other bill, and we thought it was going to pass earlier this year and it just hasn't happened. So hopefully, it'll pass by the end of the May, but we don't have any more insight than anyone else.

Your next question comes from the line of Christina McGlone with Deutsche Bank.

Just on Oilseeds, it was a great quarter and obviously, the outlook's changed a bit. But soybean crush margins look like what we track on the cash market have come up sequentially in April and look decent. So I'm curious what the outlook is for margins and I'm wondering if that is because utilization has fallen and so net net, really profitability is not better. If you could just give any color on the outlook there for oilseeds.

We have seen an increase in the crush margins. But here in North America, but that's been attributed to exactly what you said that there's been a slowdown in the crush. We slowed down some of our operations. We are not exporting much protein meal or oil out of the United States right now. So I would say that's the main reason. In various places around the world, South America, you're seeing lower crush margins, but all the plants are starting up and running. Europe, depending on the location and whether it's a soft season or soybeans, crush margins seem to be holding somewhat steady at that part of the world. It hasn't dropped as much. It dropped here in the last month, but it has come back a little bit.

And John, do you think that the closure of the Danville facility helped crush margins? And then also, Steve talked about softness in food service for soybean oil, but we're starting to hear things picking up. Are you seeing that at all?

Yes, we are seeing the pick up in food service. It's just up from the low. We're still not back to the levels we are experiencing two years ago. But we are seeing a little bit of a pick up in that market. And just like when we shut down any of our plants, it has an effect on the supply and demand.

And then turning to ethanol, the forward market has been, is much stronger than the prompt [ph] (42:25) market. One thing that that is a concern is that Cedar Rapids is coming on so the market has to absorb that 300 million gallons, but given the strength in the forward curve, would you say that's really not going to be an issue because demand is there?

The reason we have a forward curve in the ethanol market is just because there aren't any margins out there forward. So it's really a very thin market, and you can't sell very much into that market. And it's just really trying to set a margin out there. The business is still very, very spot.

And then the DOE recently talked about testing older vehicles. I think it's part of some Tier 1 testing. Pat, what do you think about that? I think they're going to be done by the summer of '11. Does that mean if they move to E15, that could potentially go to all the vehicles by next year?

First of all, until they rule, it's hard to say what the outcome will be. But I think a bifurcated system of E15 for newer vehicles and E10 for older vehicles, very complex into the market and actually would have difficulty getting much uptake. We find that only about two out of our top 10 customers would consider being first users of E15, if there was this bifurcated market. So more importantly, or as a pathway, an important pathway to kind of get to further testing -- further testing needs to be done we suggest an E11 or an E12 on a substantially similar finding so that it can go into the entire market while the additional testing is being done for E15 and even higher implementation.

Can you just talk about if there's been any impact from the oil spill or what your expectations are there?

We have not seen any impact in chipping [ph] (44:24) out of the Gulf as of this morning. So there has not been any disruptions, at least in our side.

Your next question comes from the line of John Roberts with Buckingham Research.

The mark-to-market losses in hedge accounting in the Corn Processing segment, was that only sweeteners and starches? Or did that affect the ethanol operations as well? It's written as only in the sweeteners and starches paragraph.

Principally, sweeteners and starches.

And why would it only be there and not affect a broader part of your corn operations?

It's how we manage our corn risk relative to those products.

You had managed the corn going into ethanol differently than the corn going into high fructose corn syrup and corn oil?

Let me give you an example. Let's just say we sell some fructose for this year 2010. We buy the corn, end up taking that corn, applying that corn to that fructose contract. When the accounting rules come into play at the end of each quarter, then we have to look at whether that is an effective hedge or not. So then that gets marked up or down to the market.

So it's because ethanol is more spot and the sweeteners and starches has more forward business?

That's one of the components. That's right, John.

And then secondly, you had very strong processing volumes in both soy and corn year-over-year. But I think you said in your revenue comment that maybe you're up something like 2% in total, revenue volume, on a volume basis. So the implication there is that a lot of the processing volume went into inventory?

No, I don't think so. It's a mix of -- it all crossed all the segments of price and volume. So price was down, and some of the segments and volumes were up in some. So it's really just a mix. And when you look at us an overall basis, it comes out relatively flat.

It just seems like a pretty big gap between the total revenue volume and what your report as processing volume.

What we don't put in those processing volumes are the Ag Services, and which makes it a little more difficult to do those apples and apples. And we've started up some new plants and the acquisitions that we've got throughout the organization. So it's a little bit of everything.

Your next question comes from the line of Robert Moskow with Credit Suisse. Robert Moskow - Crédit Suisse First Boston, Inc.: Steve, I just want to make sure I understood you correctly. You said that if we strip out the hedging and derivatives from the Sweeteners business, you would've been roughly in line with last year. Last year was about, on an adjusted basis, $141 million of profit. You are at $45 million this year. Is the difference that big? That sounds like a very big difference.

The difference was big. Robert Moskow - Crédit Suisse First Boston, Inc.: And can you give us just a sense of, going forward, volumes in this business are -- most of us are forecasting them down a bit. Pricing is going to be down. Mexico makes up for some of it. But should we forecast a roughly single-digit decline in Sweeteners business once we get past all this derivatives noise?

I think with the shipments to Mexico, they're more than offsetting any decline we're seeing in the United States. Robert Moskow - Crédit Suisse First Boston, Inc.: In the volume? Do you think it's offsetting the price issue also?

Timing could be a big issue on that. And whether people bought the fructose and corn was 3 75 or 3 45. So the sales price could vary. The margins are within the same range. Robert Moskow - Crédit Suisse First Boston, Inc.: And then lastly, on the BioProducts business, I've actually started forecasting losses for the next few quarters. But there's a lysine benefit in here too. So what are you really telling us about the rest of the calendar year, with ethanol prices this depressed for the calendar year and really the EPA isn't really going to bail us out for this calendar year? Do we think, that ethanol profits would be negative for the rest of the year?

Well, first of all, Rob, we don't frankly forecast. We can give you some current market conditions and a little bit of outlook on things that we have a window into. Currently, the ethanol margins are at about break even. So even if you forecasted, or in your work, you may look at forecasts that look like the same or look like some opportunity-forcing differences, I think, there's still a little bit of blending room. Although, you'd argue we were -- the industry is up against a blend wall there.

I think, when we talk about markets, our each and every plant has a little bit different cost structure. And we feel like we've got very competitive plants.

Your next question comes from the line of Diane Geissler with CLSA.

Help me understand is. To the extent that corn prices flatline from here, you already realized the losses on your hedges in this quarter. So what does that do to margins from here on out in the sweeteners and starches?

I wish it was that simple. There will be a portion. A portion of that will come back in the next quarter, because we do still have some open positions. So if you go with your assumptions and if prices stayed exactly same, we would get some of that back in our fiscal fourth quarter. As I said earlier, some of the results offset numbers from prior quarters. It's a real mixed answer, and that's why it's hard to explain. But basically, if everything stays the same, we would get a portion of that back.

Then how would that look, as we head into basically the back half of the calendar 2010, which you, correct me if I'm wrong, you price your fructose contracts on a calendar basis? So would there be carry-over into the first half of fiscal '11 then as well? Or is it primarily a very short-term window kind of quarter-by-quarter?

I think, the answer to this, this is primarily short term.

I just wanted to ask Pat on the -- you called out the fact that a lot of the greenfield CapEx starting to come online. Should we look at your ROIC as promulgated here on Slide 15, as the best way to calculate what the accretion would be from those new assets? Or what's the best way for us to look at that, in terms of understanding what that will add to the income statement?

Well, we think ROIC, as Steve has mentioned, is a better way to track performance. Although, as you can see, the trend lines are the same, no matter what return measure you use. But it's a little better way to look at the spread over weighted average cost of capital, or compares more clearly to some of competitor measures. So I think, there is a way to think about returns in the long term, being what you're objective is here. The new plants are a mix, as you might recall, a mix of cost-saving opportunities, such as the cogeneration plants, which provide us more advantage costs when natural gas prices are significantly higher and run the option of rerun coal in those plants. Two, newer, longer payout projects like a Bioplastics plant, which would have the kinds of accretion or returns at a much longer time frame. So they're a mix of sort of immediate and longer term. So when you look at ROIC, while I think, it is a measure and as we turn over the new year here, we'll probably, only kind of continue to comment maybe on ROIC. I think, it is a way to look forward on these projects, but just commenting that they are a mix of payout ranges.

And then I guess just on the start-up costs that you called out, Steve, the $27 million. I don't remember off the top of my head what they were last quarter. But at what point do those start-up costs go away?

Well, I think, I'll have to look at my sheet. But I think, the number was pretty comparable last quarter. And we're, I think, a little over $30 million. It looks like it's $33 million of last quarter. I think, that same here where we are today, the fourth quarter probably are right about the same rate, just because we've got a couple of these plants that we still need to finish up. And then again, sitting here today, I would think, when we get in the new fiscal year, hopefully, Cedar Rapids corn's the only thing left to go and that number should drop off some, and then hopefully, quickly go down to nothing.

And what exactly, do you include in start-up costs that falls into that bucket, that drops away, as you move into the next full year?

Two pieces to that. One, as we construct plants, not every single dollar that you spend can be capitalized and put into the fixed-asset range. So we've got a section of that. It's kind of the non-capitalizable cost. And then we also add into that, what we call our pre-operating start-up costs to the extent that we've got some targeted production rates. So until we get the rates up to where we think they should be, we're going to take those incremental excess costs and throw that into the $27 million here. But the mix, and once we get kind of get those through then they'll just go into the bottom line.

Your next question comes from the line of David Driscoll with Citi Investment Research.

Steven, I want to go back to the corn hedging piece of it. I know, you've gotten a lot of questions here so far, but I just want to try my hand. So as I understand it, there's two components. There's the reversal of prior-period gains that were happening in the quarter. And then as a second topic, it's the ineffectiveness of hedge accounting. So the way I want to read this, is that in some prior quarters, you booked a bunch of gains and now you're reversing them out, because of the effect of various hedges that you had in place. So that seems pretty straightforward, in terms of how these things would work. The second piece seems more of a forward-looking issue that the ineffectiveness of the hedge accounting, and I want to guess, and John or Steve, maybe you can comment, this sounds like this a cross-hedging issue, where you have some pieces that the accountants just simply won't let you call a hedge. It falls into another quarter, which is why you said that we would see gains in another quarter. But in truth, you did it in order to offset things that were happening in this quarter. More or less, am I on the right track with this?

Parts of that. But I would say no, in general. The one major item I want to correct is that it doesn't have anything to do with cross-hedging. The accounting rules are very specific on specifically, how the basis works and the effectiveness of hedging corn against -- using corn futures to hedge corn. And so when we talk about hedging effectiveness, this isn't the accountants telling us that we've got some cross-hedges that doesn't work. This is simply corn futures from time to time, based on the accounting rules and regs are not considered effective. We know they're effective for economic purposes, but they're not effective for accounting purposes. And therefore, they don't allow you to defer the gains and losses, related to those into the pin-to-the-forward period. So that part, I want to try to get to. Some of your other points, so as I said, there is a portion of that, that I think, when you started your comment I agree with, because some of the loss and gains that we've taken in prior quarters, and then enter some that we will on the ineffectiveness side, that will get pushed forward into forward period.

So would the net answer be right now that you've taken a number of losses that showed up in this quarter, and that -- again I know, the corn prices can move around. But fundamentally, the nature of what's happened here is it's pushed forward future gains?

A portion, yes. Portion of that changed, that's true.

And this is why, to a number of other people, you've answered the question that says that don't look at this quarter's $45 million in the sweeteners and starches as the normal operating profit. That is not how calendar '10 would sort out. It would sort out much more like we've seen in prior quarters?

That's right.

Final question then is to John. Going back on Oilseeds, you've made a number of comments regarding the capacity. Can you reconcile something for me? When I look at Oilseed Processing results, I mean, they have been very, very good. But I get the sense that in some of your language, you're being very cautious in this idea that we have overcapacity out there. And sometimes, I think, that when we all listen to it, it's very hard to understand how negative that may or may not be in future periods. Are you basically saying that when we bring in the North American harvest and that additional North American capacity, can compete against global capacity, that we will see a very significant contraction in crushing margins. Is that effectively what you're concerned about?

There's a lot to answer in there, David, but let me just try. Our North America was slowing down the crush rates. So I do believe we will have a margin, like we did last summer, going forward. We will not see the exports of protein and meal coming out of the United States later in the year, like we saw this last year, because we have such a large South American crop. And we have more crush coming on in Argentina and Brazil, mostly Argentina. But with that said, we are seeing 4% growth in protein demand. So it becomes a little bit of a timing issue. Eventually, we will get up to that with crush capacity will not be an issue. But we have expanded, people have expanded crush in Canada. We have expanded crush in Argentina. So on a global basis, I feel there's a little bit of overcapacity and how that all plays out, it's just kind of tough to say. But I'm still very friendly long term about the whole industry. We're going to keep seeing growth in the meal and the oil demand, globally. But when you start talking quarter-to-quarters, it does get a little bit tricky.

Your next question comes from the line of Bryan Spillane with Bank of America.

Just two questions related to ethanol. One, I think Pat, in your answer to your Rob Moskow's question, I think, you said that the ethanol margins were break even. And I just wanted to clarify, is that the industry margin or is that ADM's margin?

I think, it's the industry margin in general.

And then just also related to ethanol, if you go back to the second quarter and the second quarter earnings call. At that point, I think, you described the ethanol market as being reasonably balanced at that point in time. And I guess, I'm just curious to know from your perspective, what's changed between now and then? And are you surprised by what's changed between now and then, in terms of the ethanol market?

I think, what surprised me personally the most was we saw more plants start up than I would have thought would have started up. And just margin structure really isn't there. So we saw more people able to get financing. Also the blend wall has come in and we have not been able to expand the market as quickly as what we originally thought. Now we're expanding more in -- I think, it's roughly 86% of the gallons are being blended. We're seeing a little more blending in Texas, a little bit more in Pennsylvania. Salt Lake City is going to start blending. But I think, between those two, it was a little bit of surprise to me, and I think, the biggest one was the additional plants starting up with no real forward margin structure.

And John, do you think that, in terms of the extra capacity that's come on -- I'm assuming that the new capacity that you're putting in is more efficient, higher margin, especially once you get through the start-up costs. What do you think, the incentives are? Or how difficult do you think will be for some of these additional capacity that's coming to stay online? I guess, what I'm trying to say is, I'm assuming there's a margin differential between what you are putting into the market versus what's been turned on by some of your competitors. And how difficult do you think will be for them to continue to operate in this environment?

I hate to answer that question. It puts me in their shoes, and I try to manage our business. It is a difficult environment right now with the blending wall and the additional capacity. One of those two have to be solved in order for the industry to start having better returns, I guess, the best way to say that.

Your next question comes from the line of Ken Zaslow with BMO Capital Markets.

Is ADM's margin for ethanol higher or lower than the industry?

We feel that we have a cost advantage to the industry. And with our global market knowledge on how we sell our BioProducts, our coal products and our ability to buy an arbitraged corn, we feel -- and also with our logistics, that we feel we have a better margin than the industry.

I was under the impression that there was like a month to two-month lag between the actual industry margin and kind of what goes through ADM's income statement. So like if there was a month or two ago that there were losses, would that be in this quarter? Or if you've already taken any of the "losses" in the industry or whatever the bad margins were, before they've hit break even. Is that the way to think about it?

I don't think so, Ken. I think, that the market is so spot that whatever is happening in the marketplace runs through our results pretty quickly.

So your BioProducts should not be worse than this quarter? This is the bottom of the results, if I look at the margins right now, is that fair?

I think when you look at the January, February period, we had a pretty good margins.

But when you look at March I wasn't very happy?

March, right. I mean, margins have started to fall off a little bit, correct.

And have you taken a step back into -- and I get this question a lot, is if ADM did not build their two plants and we were in the state overcapacity, ethanol margins would be higher and you'd have about $1 billion of extra cash. Have you thought about kind of that logic of maybe going this far that quickly, without knowing it may not have been the right thing? How do you kind of put the parameters around it?

We believe in this business in the long term. And I think, sometimes when you're taking on new capacity and new projects, you can't be looking at it as the exact timing of a particular quarter or year, when it comes on. On the way to ultimately, 36 billion gallons by 2022 is what the vision of the President and others are. These kinds of plants will make the difference in the longer term to have this country have more ethanol and more home-grown energy. So timing is sometimes everything, and it's sometimes part of the overall process. I think, we really have a long-term view here, and we feel very good about the competitiveness, the location, the capability. John mentioned the capability we have surrounding all these plants. We feel very good about our logistics, our ability to buy corn. We're glad we're in the business.

On Ag Services, if I look at the outlook for the -- I know, you seem a little bit more cautious on Oilseeds and the other businesses. But Ag Services, it's setting up to be a pretty big year for the next 12 months. We have a big crop coming in, we have seemingly some China problems with corn. There seems to be maybe some few dislocation. Am I missing the overarching picture here? I mean, I'm not saying quarter-to-quarter, but it seems like in the next 12 months, Ag Services is setting up to be a pretty nice picture.

As we see global demand keep increasing and the outlook of the crop currently looks fantastic here in the United States. Now we all know that can change. We can have a very large corn and soybean crop here in the United States. We have good wheat carryouts and with global demand increasing, yes.

If you guys have any gains that are like in wheat and cocoa or any other places that would kind of reverse out going forward or vice versa, it's very difficult in general to forecast quarterly numbers, particularly on divisional level. [indiscernible] is definitely very helpful cocoa, business the Cocoa business obviously, falling off. I didn't realize there was so much gains to be reversed and so it's just a suggestion, just be helpful for modeling purposes.

We understand that and appreciate that. Now you have to recognize that we're not -- because so much of what we're doing here has a mark-to-market aspect to it, there's no guarantees when things will get reversed and when things will happen. You can make lots of assumptions. But we appreciate that, and that we'll do our best to try to help you where we can.

Your next question comes from the line of Ian Horowitz with Rafferty Capital Markets.

Pat, in your prepared comments, you mentioned your preference for the EPA, the rule on a lower blend level, E11 or E12, rather than E15, as you saw E15 to be a challenge at complexity. Just explain that a little bit more in detail to me? To me, it sounds like E15 would just be raising the ceiling of that much more. It's not really quite the mandated level that they have to blend, but rather the maximum that could be blended. Can you tell me why an E11 or E12 blend would be good to [indiscernible] ?

You were a bit faint, so if I don't get to your question, tell me. I think, you asked about why E11 or E12 would make sense, while waiting for higher tests and levels of E15. The challenge with E15 is sort of twofold. One is, there is some discussion that and as you might have noted from the EPA's response to the waiver request, they've talked about testing for 2001 in newer vehicles being compatible with E15. But potentially, older vehicles are not. And so some sort of a bifurcated system where you had some vehicles that could use E15, there would be some challenge with the blending, the distribution system, the dispensers, the tankage, the retailers, perhaps consumers needing to be advised or warned or labeling, and that confusing sort of implementation process that lend itself to some blenders just not wanting to accept the E15 going forward. So the opportunity for E11 or E12 to be much more of a smoother implementation for every 1% move in the blend wall, you can get about 1.3 billion in additional gallons. So with smoother implementation on the way to higher blend levels, E15 and beyond could be E11 or E12, which the EPA could make a substantially similar finding, which means it's substantially similar to E10, therefore, could be in the entire fuel pool. So used by the entire carpark. So we think, that implementation would be easier, because it could happen faster. Just go right in the way you E10 goes in. And again, as more testing is needed on E15, that would be a sort of pathway on the way to a higher transition. Does that make sense and did I answer your question?

So just to clarify, I guess, the issue then really isn't the rate of blending. It's rather this bifurcation of the vehicle pool. And you just find that it would be easier or simpler for the EPA to rule on if it was a lower blend rate. In other words, if they came out and said any E whatever throughout the entire vehicle pool, you'd be completely happy with that. It's not really the percentage of blend. Rather, it's the bifurcation of the market, is that correct?

Yes. If they said E15 everywhere, that would be good, the E20, E25, perhaps we should be getting into a testing of much higher levels as Brazil and other places do. But on the way to that, if they find they cannot rule on E15 for the entire carpark, any increase is helpful.

And is this kind of up for discussion right now? I haven't heard much about this.

It is in the comment submitted by the RFA, I believe it was in July. So they also and stated that it was their belief the EPA can authorize the higher blends and make this substantially similar finding. So yes, it's been out there.

The 1 billion gallons that are idled right now, John, you said you've been surprised that some of this capacity that's come online and I have been able to receive working capital financing. Can you comment on when you look out at the next 1 billion gallons of idled capacity and where you -- I guess, not holding your feet to fire on whether it gets put back online or not. But what does this 1 billion gallons look like?

I think, the blend wall that we discussed earlier will have a big impact on that, and how quickly does the demand increase. But under these circumstances, I can't see that additional 1 billion gallons coming on right now, just because we're already producing more than the mandate. And until we can increase the usage rate of that, I just can't see that extra 1 billion gallons coming online.

So with 12.8 online right now and your Cedar Rapids plant coming up mid summer, it gets us to about 500 million gallons above the 2011 RFS. And again, kind of walking into January on an overcapacity basis relative to the mandate, you would see that, that 1 billion gallons of idled capacity would kind of still be under pressure, in terms of coming back online, correct?

Correct.

The Bioplastics facility, just to get a bit of understanding, is it your decision on how fast this gets put online, in terms of getting to commercial capacity? Or is this a joint discussion between you and Metabolix? Or is it strict down Metabolix's timeline?

It's a joint discussion between Metabolix and us about the timing and how quickly we ramp up the plant.

So it's not only operational and mechanical kind of processes, but just also market development and their sales of the product. Is that correct?

Correct. We have a sales plan going out forward and what we anticipate and we'll tweak that as time goes on, and how the plant runs and how customers are accepting the product.

And when would you expect to begin discussions around the second through fourth trains of that facility?

We're discussing it now. And we are going to the capital expenditures to bring that online. We're in the process of bringing on another fermenter, as we speak, here in the next six months. So we're always looking at that. But the next big step will be the next train.

Your next question comes from the line of Ann Gurkin with Davenport. Ann Gurkin - Davenport & Company, LLC: I believe, I heard on your comments that global protein demand is forecast up 3%. Is that correct?

Yes, I think it's 3.3% or 3.4%, something like that from what we read. Ann Gurkin - Davenport & Company, LLC: That's a nice improvement from what was really a cautious outlook and commentary during February. Is there something driving that? Is it across the board or is there one area that's stronger?

We're seeing Asia with very good growth. South America has good growth. I think, Steve mentioned also, Europe we're seeing a little bit. North America's fairly flat. But I think, just the world economies are feeling a bit better. Ann Gurkin - Davenport & Company, LLC: And then if I can just get an update on switchgrass sugar ethanol, this alternative opportunities. If you can give me an update as to where you are with some of that?

Our sugar ethanol plant, we're starting the early part of the harvest now. That will start up here later part of this month, I think, or on the 17th or the 20th. Switchgrass, we're not involved with.

We're still burning [ph] and some of the other projects are on stream. But I don't have any specific updates for this call.

[Operator Instructions] The next question today comes from the line of John Roberts with Buckingham Research.

I think, you've had a debate with the rating agencies about whether the potential for stock repurchase should affect whether your convert is considered more equity-like or more debt-like. Have you had any updated discussions there? I mean, you spent over $0.5 billion in reducing your debt during the quarter here. It would be nice to see some equity movement too.

We normally have our kind of annual conversation with the rating agencies in October. I plan to go out and visit them again here in the next month to revisit that very same subject and bring them up to speed with the state of our financial wherewithal and see where we can go from there.

Your next question comes on the line of Vincent Andrews with Morgan Stanley.

I just wanted to understand on going to E11 or E12, I think, I understand what you're saying that the EPA, with a substantially similar ruling, with them unclear on how that solved the implementation issue. So have you talked or listened to 10 customers, don't want E15, do the 10 customers want E11 and E12?

I think, the point there, Ken (sic) [Vincent] and I can't answer that specifically, but it has to do with, Vincent, it applies to all cars, our all vehicles, because they're substantially similar. It's just like the E10, that would go into the gasoline pool sort of unnoticed. So it would be not an implementation issue like we hear the implementation issues could be on E15.

But aren't there liability issues and there wouldn't be pump issues? I mean, are you saying that all that other stuff would be no problem with E11 or E12?

Well, I can't comment on all that others would do. And if there was a court challenge of some sort, there would be lengthier implementations and perhaps, some of the same. But in fact, it would be easier or it's assumed that would be easier, because of the substantially similar and all-carpark applicability, would be the statement.

What you're saying that the benefit of E11 or E12 would be that it could be for all the cars, rather than E15 would be for certain cars. And that's what would be better about it. But there wouldn't necessarily be any differences in the issues from a liability or from a pump perspective?

I don't know. I'm just saying that if it's substantially similar, your comment first, I would agree with. I can't comment on what others might react to. But certainly, when it's applicable to the entire carpark, it's flows through the system as E10 does today.

Your next question comes from the line of Alec Patterson with RMC (sic) [Dresdner RCM Global Investors].

Steve, I was wondering, the CapEx, the wind down, what are we looking at, maybe as a longer-term run rate, longer-term meaning in the next couple of years?

We don't have any Greenfield projects on the drawing board that are even close to the magnitude the once we've been completing. I'm sure we'll have some of the Cedar Rapids corn plant finish-up costs in 2011. And so 2011 will certainly be down from where we're at today. Historically, we've had a run rate of kind of normal recurring CapEx a maintenance et cetera in the $600 million or so, might tweak up just a tad. So we're seeing it go, but then the other aspect to that, Alec, is that we see a chunk of our growth coming through M&A and acquisitions, which are a lot harder to predict when they're going to come on. So it's one of the reasons we keep a strong balance sheet and that proverbial dry powder for those kinds of things.

But I might hearing something on the order of $600 million to $700 million of maintenance CapEx and a few hundred million on top of that, for tweaking facilities et cetera, for growth needs, and then whatever else falls to the M&A/capital structure pile?

I think, if I was looking at 2011, that wouldn't be too far off.

And 2012 similar?

Yes. Hard for me to see that far ahead. But based on where we see today, that's right.

Your next question comes from the line of Ken Zaslow with BMO Capital Markets.

You guys have been talking about acquisitions for some time now. Is there any updated timeline or anything that we can kind of hang our hat on that there might be a something in the -- just to give you an idea of what's happening, because it seems like we've been talking about acquisitions, because you guys are pretty cash flow positive for quite a while. Can you just give us a little bit of an update and maybe a timeline?

Well, it's hard to give you a timeline on those things, Ken. And the good news is that the market's quiet, so you're not hearing a lot of rumors about that. But we're working on them everyday, literally. And so it's really hard to put a timeline just because, of course, it takes two to get a deal done. So what I'll tell you is that we've got -- we're actively analyzing, reviewing and looking at transactions, as we speak.

Is anything like around the corner? As in like you guys are close, or are we still three to 24 months away?

I won't say that, because it could be -- you just can't say that.

And it's all about profitable growth and we'll share with you when we know and what we know and thanks for asking though. We have talked about it and I think, it is an integral part of our growth plans.

Ladies and gentlemen, this concludes the question-and-answer portion of the call. I'd now like to turn the call back over to Pat Woertz for closing remarks.

Well, thank you again for your time. We really appreciate your questions today. Slide 17 did show a couple of upcoming investor conferences. And we look forward to talking with you at our next call in August. Goodbye now.

Ladies and gentlemen, thank you so much for your participation in today's conference. This concludes our presentation and you may now disconnect. Have a wonderful day.