Good afternoon, and welcome to the Archer Daniels Midland Company First Quarter 2013 Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Ms. Ruth Ann Wisener, Vice President, Investor Relations for Archer Daniels Midland Company. Ms. Wisener, you may begin.

Thank you. Good evening, and welcome to ADM's First Quarter Earnings Conference Call. Thank you, all, for understanding our decision to postpone our earnings announcement and call until after our announcement about GrainCorp. I want to note that we have just posted an updated earnings presentation, including slides related to our GrainCorp acquisition process. You can download that updated presentation at www.adm.com/webcast. During today's webcast, we will also discuss those GrainCorp slides, even though they will not appear on the webcast video. So please go to www.adm.com/webcast to download the updated slides for today's call. After we finish our call, we will also be posting a longer presentation regarding GrainCorp at the same address. A replay of today's presentation 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 our comments constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. The statements are based on many assumptions and factors that are subject to risks and uncertainties, including availability and prices of raw materials, market conditions, operating efficiencies, access to capital, actions of governments, the parties' ability to consummate the transaction described herein, the conditions to the completion of the transaction and receipt of any required regulatory approvals, including on terms or schedule different than anticipated. 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 statements as a result of new information or future events. Please turn to Slide 3. On today's call, our Chairman and Chief Executive Officer, Pat Woertz, will provide an overview of the quarter. Our Chief Financial Officer, Ray Young, will review financial highlights and corporate results. Our Chief Operating Officer, Juan Luciano, will review our operations. Then Pat will discuss our process to acquire GrainCorp. After that, Craig Huss, our Chief Risk Officer, will join Pat, Ray and Juan during the question-and-answer portion of the call. Please turn to Slide 4. I will now turn the call over to Pat.

Thank you, Ruth Ann, and welcome, everyone, to our first quarter conference call. This morning, we reported first quarter net earnings of $269 million or $0.41 per share on a diluted basis. Our adjusted EPS was $0.48 per share. Segment operating profit was $630 million. As expected, this was a challenging quarter, with Agricultural Services negatively impacted by the ongoing effects of last summer's U.S. drought. In Oilseeds, our earnings were reduced by the challenges in Brazil and also by depressed margins in cocoa. Our ethanol business improved as declining inventory supported overall industry margins, and we began to see positive results from the actions we've been taking to improve the profitability of that business. We continue to manage through tight U.S. stocks of oilseeds and grains until the North America harvest. Demand for our products remains solid, and we will continue to leverage our global origination and processing network to serve the needs of our customers worldwide. Earlier this afternoon, we announced that we completed our due diligence and intent to acquire GrainCorp. Following Ray and Juan's update on the quarter, I'll come back a few more -- with a few more details and provide some information on the process for that transaction. Now I'll turn the call over to Ray.

Okay. Thanks, Pat. Slide 5 provides some financial highlights for the quarter, which I'll run through briefly. Quarterly segment operating profit was $630 million, down from last year's strong $918 million. Our effective tax rate for the quarter was 28%, slightly down from our tax rate in the quarter last year. Earnings per share were $0.41 on a fully diluted basis compared to last year's $0.60. And our adjusted earnings were $0.48 per share compared to last year's $0.78 per share. In the appendix, you can see the reconciliation of reported earnings to adjusted earnings for the periods ending March 31. For this quarter, we had a LIFO inventory charge of $34 million or $0.03 per share. In addition, we established a reserve of $0.04 per share for the future settlement of the FCPA matter that we have previously disclosed in our 10-Qs and 10-Ks. Based upon discussions to date with various U.S. governmental regulators, we felt we had sufficient information to establish a reserve in this quarter. In our LIFO adjusted 4-quarter trailing return on invested capital of 5.1% was 30 basis points below our WACC of 5.4%. Excluding specified items, our adjusted 4-quarter trailing ROIC of 5.5% was above our WACC by about 10 basis points. Our spread of ROIC over WACC was lower this quarter compared to the prior quarter due to weaker earnings. Slide 6 provides an operating profit summary in the components of our corporate line. Juan will talk about the business segment results in his update. Let me touch on a few items of significance in the corporate line. I mentioned LIFO earlier, a charge of $34 million for the quarter due to the impact of increasing commodity prices during the quarter on our inventory valuation compared to a charge of $107 million a…

Thanks, Ray. Good evening to everyone on the call. Beginning on Slide 9, I will take you through the highlights of each of our business segments. Oilseeds operating profit in the first quarter was $313 million, down $229 million from the same period 1 year earlier. Year-ago results included net favorable mark-to-market timing effects of about $60 million, while this quarter, including minimal timing effects. Crushing and origination operating profit was $156 million, down $108 million from the year-ago quarter. In North America, softseed crushing results were down from last year's strong results as tight supplies affected seed basis and capacity utilization. North American soybean crushing results were strong in the quarter, but margins and production declined through the quarter amid weaker export meal demand and lower bean availability. In South America, higher trucking costs and reluctant farmer selling negatively impacted our results. European crushing and origination results improved from the year-ago quarter, aided by reduced imports of North and South American meal. Refining, packaging, biodiesel and other generated a profit of $108 million for the quarter, up $29 million, as U.S. biodiesel demand saw a modest recovery, offset by poor margin conditions in Europe. Results included about $20 million in biodiesel's blender's credits, retroactive to 2012 blending. Cocoa and other results decreased $181 million amid weaker press margins and the absence of last year's $72 million favorable mark-to-market timing effect. Press margins were negatively impacted by the addition of industry processing capacity, lower cocoa powder prices and customer inventory reductions. Oilseeds results in Asia for the quarter were up $31 million from the same period last year, principally reflecting our share of the improved results from Wilmar. Please turn to Slide 10. As you see, corn processing operating profit of $153 million represented an increase of $20 million from…

Thank you, Juan. Indeed, we are all very pleased and confident that we have driven to a very good place on this transaction. As we've said, the acquisition fits well with our growth strategy, it meets our financial objectives and it provides an excellent platform to serve growing global demand, particularly in the Middle East, Africa and Asia. Slide 13 provides an overview of the transaction. We have completed our due diligence, and we will make a cash offer of AUD 12.20, which the GrainCorp board has indicated it will recommend. You will recall, we acquired 19.8% of GrainCorp's outstanding shares in several tranches. That was at an average cost of AUD 11.24. So the total weighted acquisition cost to us would be about AUD 12 per share. GrainCorp, additionally, intends to pay its shareholders dividends out of current and retained earnings of AUD 1 per share. If regulatory conditions are not satisfied or waived by October 1 of this year, they will also pay an additional AUD 0.035 each month -- each full month beyond that date, subject to GrainCorp being profitable over that period. The acquisition implies an aggregate transaction value of AUD 3.4 billion, including ADM's existing ownership and GrainCorp's debt. Slide 14 outlines the key transaction metrics. Our weighted acquisition cost, excluding synergies, represents a multiple of about 8.5x the 2013 consensus EBITDA for GrainCorp. This multiple compares favorably with recent M&A transactions in the global ag space. We expect this acquisition to be earnings accretive to ADM in the first full year. We estimate run rate synergies of AUD 50 million to AUD 70 million by the end of year 2. Now we went into the confirmatory due diligence period with that estimate, and we were able to confirm and feel confident about that estimate,…

[Operator Instructions] And you have a question from Farha Aslam.

Congratulations on the GrainCorp transaction.

Thank you.

And Pat, just starting off with GrainCorp, could you provide us any greater detail in terms of the earnings accretion you do expect? I know it's supposed to be earnings accretive in year 1, but could you provide us any detail about the scale?

Well, as you know, we did some confirmatory due diligence. So I think the combination of what you have noted or what can be noted from the AUD 3.4 billion of the transaction value and what we have paid per share, we look at the EBITDA forecasted with their 2013. And looking forward to 2014, I think it's reasonable to expect the $0.20 to $0.30 per share that, that math would come out to. We, of course, haven't closed the deal yet. It's a long way off. We're looking forward to spending time on it in greater detail. But again, I think with accounting work to do and the closing ahead of us, I think that's a high-level number that's probably not out of line.

That's very helpful. And then in terms of the October close, are you at all concerned about the Chinese component? Or do you have any kind of carve-outs in case there's delays for that one portion of the transaction?

Well, we feel good that we've planned for this. So the filings and the work underway on the time chart to get filings in place for all of the transaction, our advisors have it in progress. I don't think we can speak to the specifics of Chinese approval at this time, and we look forward to making that happen as quickly and smoothly as possible.

Great. And just 2 quick questions on your base business. In terms of the improvement in ethanol, I think you've highlighted that going forward, margins are going to be volatile. But just kind of near term, for the second quarter, are margins materially better than what you've realized for the first quarter? It's just some near-term direction would be helpful.

Yes, Farha, this is Juan here. I think margins continue to be good at this point in time. Obviously, when margins are good for a period of time, some of the capacity may come back, so that's why we are calling the volatility. But I think we've seen the market reaction that we predicted in the previous quarter. And now, at the moment, they are healthy margins.

Healthy margins. And then if you just -- on Oilseeds, you highlighted that part of the impact was from North America and part of it was from the Brazilian and South American farmer and congestion issues. If you had to break the two, could you just give us roughly how much of an impact each was?

I will describe that the biggest impact was probably South America. I think North America was a little bit down in softseeds but offset by the good performance in Europe. I think South America was the biggest impact. And in South America was probably 50-50 between the origination business, if you will, the farmer not selling and the trucking impact in the transportation of that. So part of that will not come back, which is the trucking extra costs. Part of that will come back when the sellers sell. So...

Your next question comes from Ryan Oksenhendler.

Juan, I just want to -- I had a question about ethanol, in terms -- where we stand in terms of RINs available for use this year. And how many do you think will get used in 2013? And then as we roll into 2014, if there's not that many RINs available for use, is the market pretty much in balance for the whole year, maybe makes it a more stable year in ethanol?

Yes. We share on your view there, Ryan. I think there are like 2 billion RINs available to carry into 2013. When we make the forecast for RINs available to carry into 2014, we get under 1 billion. So I think that -- we believe that E15, E85 will be needed to fulfill the mandate. So we are optimistic about our view of the '13, '14, '15 time frame for ethanol. We think that there's going to be a healthy supply-demand balance for the industry.

Okay. And then also, can you -- I guess, can you talk about some of the returns on the capital that you spent over the last 12 months? It's kind of hard to see, I guess, given the drought, it's probably masking a lot of the returns. But if the cycle does turn, the normalized earnings, are they higher than they have been historically? And, I guess, can you quantify, I guess, some of the numbers on a margin or profit basis?

Yes. I'm not sure I'm going to quantify it, Ryan. But I will say, yes, that they need to -- they're going to be higher. I think that we have expanded our earnings power through all the work that we have done in capital discipline and cost and cash. And you will see that when we have a normalized crop running through our asset base.

Your next question comes from David Driscoll.

I just like to kind of come back to the quarter and then the remaining outlook for 2013. Is it fair to say that the conditions will continue to worsen in the second and in the third quarters as U.S. crop supplies dwindle even further, which should just be an ongoing and significant negative impact to Oilseeds and Ag Services, kind of the 2 biggest pieces to the pie? Is that a fair statement?

David, Juan here. I think you've heard me say in the previous call that first quarter and second quarter will be progressively worse. And so you are correct in terms of Ag Services. Until we're going to have a new crop, we will struggle with the lack of volume. It's like a fixed cost business, if you will, in that sense. So in Oilseeds, we're going to see the shift to South America. And obviously, our footprint is bigger in North America than in South America. So from an earnings perspective, that also is an impact. So we expect second quarter to be a difficult quarter for us. Third quarter will depend on planting harvest and all that. So we are, though, very pleased with our -- the startup of our Paraguay plant. The plant performed very, very well in South America. And actually, from a profit perspective, although it's hidden in a lot of the moving parts, it actually performed above expectations in the first quarter. So we are pleased with our investments in that sense.

And just 1 follow-up. Is there enough corn, in your opinion, in the United States for this summer? I note that the United States cornstalks are at 17-year lows, given -- and given the planting delays, it doesn't look like there's any chance of an early harvest. So how does that impact your thought process in the summertime for your entire corn processing segment?

David, this is Craig. First of all, we've had a couple of things happen. With -- we've obviously ended the drought, and we're very wet, which is -- which has -- with the wet, we have much more opportunity going forward on a grain crop. We are delayed a couple of weeks. But as you know, where the corn will mature on degree days of temperature, so it's a time period, we will be very tight, we'll have to manage margins. But we've done an awful lot of work in that area, and we'll just have to let the markets play themselves out.

And your next question comes from Vincent Andrews.

Could you just give us your level of confidence in the 2013 GrainCorp earnings forecast? And, I guess, you're talking about going to '14. And just sort of how do you sort of bridge that with where earnings were in '11 and sort of -- we'd heard some scuttlebutt sort of throughout this process that maybe '12 was a better year than sort of was an above average year. So how do you think through that and have confidence and where things are there?

Well, one thing I can say, Vincent, is that when we modeled and looked at this opportunity, we really took into account the long range and the over multiple year crop conditions and earnings forecast. We realized they've had strong years and less than strong years. And actually, there was the outlook going forward by many analysts. So the consensus is that, that would come down over time. They also have some improvements planned. So I think it's more about what we can do together once we have closed on the deal. We feel confident that they can reach their earnings to pay out their dividend or they feel confident about that. That's the indication from their board. And I think it's about going forward in 2014 once we have the opportunity to reach the synergies, to assess more in detail, more than a week's worth of due diligence but assess in detail what every thing it is we can do.

Okay. And then a separate question. Last week, the MLP Parity Act was reintroduced into Congress to make all sort of renewable energy assets, MLP-able. And when I saw that, I couldn't help but think of your ethanol assets and wondering whether turning those into an MLP at some point in time would be something you would be interested in.

It's Ray here. We've been studying this thing in the past. In the past, the ethanol assets weren't eligible specifically for an MLP, but I guess we're going to, again, look at studying it and look at the opportunities to see whether it makes sense.

And you have a question from Ken Zaslow.

A couple of questions. One is -- in terms of the ethanol side, I have 2 questions. One is, are you guys running your ethanol plant at full capacity? And would -- did you run on that full capacity during the quarter?

Ken, Juan here. How are you doing? We are back at 100% capacity.

Did you run it at full capacity during the last quarter?

Not the full quarter, no. We brought it back during the quarter.

Okay. And then in terms of 2014, on ethanol, how quickly do -- does the United States need to get the E15 pump to be able to actually meet the mandate? Can you just like -- how does that work? Because I feel like the RINs are going to run out and then the E15 and the E85 pumps are really not popping up as quickly. How do the bridge work to get to the mandate?

I don't remember exactly the math, but it's not a huge number. We believe that with E85 and maybe 15%, 20% or something like that of penetration of E15, we think. But don't quote, I may have to get back to you on that. It's quoting from memory. I don't remember exactly the math.

I don't usually ask a cocoa question, but how sustainable is the -- or how long will the performance of cocoa last at this somewhat subaverage level? Is it something that gets corrected immediately? Does it turn around over a year? Can you just talk about that? It's not huge, but it's probably about a $0.05 to a $0.10 relative to expectations.

Yes. During January and March period, the grindings exceeded consumption. And -- so if you look at the overall world, we were coming from a period in which we couldn't produce enough powder to satisfy growing demand. And there was a slowdown to that. And with the change in price direction, everybody is starting a destocking. So I would say, underlying demand is recovering, although it's an early recovery. But it's mostly a slowdown and destocking of the industry. So we think it's probably going to be impacted for this quarter and the next in that sense, until we will resume the more tight supply-demand balance.

My last question for Ray is repurchasing stock. Could you talk about that? You said your liquidity is about $8 billion, transaction is AUD 3.5 billion, AUD 3.4 billion. Could you talk about -- will you start repurchasing stock? How does that all play out? Can you talk about the sequential share repurchase opportunities?

Yes, Ken. Again, we're committed towards mitigating the impact of the remaining dilution on these equity units, about 14 million more shares we need to repurchase. The timing, we're working through it. As you know, in terms of our -- some of our credit metrics, especially the debt-to-EBITDA metrics, due to just weaker earnings, we've got -- we had some weaker metrics. The GrainCorp transaction, we believe we can easily finance the transaction. But we do need to kind of work through the next couple of quarters in terms of getting the earnings power up and our metrics up. But again, we feel confident that we will mitigate this impact, maybe not by the end of this calendar year, but over the next couple of years, we will mitigate that impact.

Your next question comes from Ann Gurkin with Davenport & Company.

Congratulations on your GrainCorp news, first of all.

Thank you.

I had a question related to GrainCorp. I'm just curious what the strategy for developing your exposure and business in the Australasia region. Have you tempered expectations at all? There's been a lot of news, discussion about maybe there's been global overproduction of grains and proteins. Is there any reason to temper kind of expectations for growth rate in that area of the world?

I don't think so. I'm not sure I'm reading the same thing you are because we're seeing expansion. Maybe if you expand what you think is Australasia to North Africa to where some of the grains go even farther West from just North of Australia, there's been some significant -- there's been growth year-on-year. Going forward, I think we have thoughts about integration in some of our already positioned imports into Asia, imports to China and so forth. And that's probably part of what we kind of talked about in that overall strategy.

Okay, great. And then the gap between adjusted ROIC and WACC narrowed in the quarter, which you explained, how should we think about that relationship as the year unfolds?

One way to think about it is, clearly, the impact of the drought is having an impact on our earnings for the purposes of the ratio there. As Juan indicated, we'll probably have more pressure going through the second quarter. But I'm pretty confident that as we kind of move through the rest of the calendar year, assuming we got a normal harvest in the United States, we should see our earnings power being restored. We're actually doing a very, very good job on our invested capital base. By the way, when you take a look at our invested capital base at the end of March compared to the end of December, we're actually lower. So we continue to do a good job on both the cost, the cash and the capital side. We'll continue to work through that over the next quarters. And so when we start having earnings recovery associated with getting to more normal U.S. crop conditions, as well as seeing the full benefit of recovery in terms of the ethanol margins, I'm confident that our spread of ROIC over WACC will improve.

Okay, great. And then just 1 more question on South America. Going into the quarter, we were expecting some logistical issues, and you all were preparing for that. What was the biggest difference versus your preparation efforts for logistics in South America? Was it the trucking industry and expenses there? Or was there something else?

Yes, Ann, I think the trucking is the most difficult. We couldn't hedge that. And I think that there were a couple of issues in the environment that may be -- that were difficult to anticipate. I think the corn export were longer and extended into February and, to a certain degree, collided also with the soybeans exports. I think that there was a new truck legislation in South America that restricted daily trucker work journey. And the thing with that transport companies, we're able to pass those cost increases in terms of higher tariffs. So the situation is getting a little bit better, but it still continues. And I think we will continue into June, July at this point.

Your next question comes from Ann Duignan with JPMorgan.

[indiscernible] filling in for Ann. I was wondering if you could maybe first give us a brief overview. You had mentioned you would be able to meet your return goals within 3 years after you close GrainCorp. I was wondering if you can give us, Ray, some color as to what exactly those return goals are.

Yes. As you know, we've stated that our return objectives for this company is to earn 200 basis points over our weighted average cost of capital. As we look at this transaction, look at our estimates of earnings and as we look at the role of the synergies over the next 3 years, that's how we're estimating that we will achieve a return objectives by year 3.

Great. And secondly, can you guys give us your latest view on some of the changes to ethanol and if they are currently being discussed in Washington D.C. and at the state level as well?

What changes in ethanol that you're talking about?

For example, the RFS Reform Act or other efforts by some of the politicians in various states to change ethanol mandates going forward.

Maybe I'll take that, Mike. The -- first of all, I don't believe the RFS will be repealed. And while there is a lot of noise around this and many other subjects in Washington, if you kind of peer through it, it is a federal law. It would take agreement between House, Senate, President to change or repeal the law. We continue to feel confident about informing and educating lawmakers about the many benefits and the impacts of continued and enhanced ethanol use. So I think it stayed the course, and that's how I see it in Washington.

Your next question comes from Tim Tiberio with Miller Tabak.

Just wanted to go back to the GrainCorp transaction. When you look across the various segments within the business, is there any rethinking about the strategic fit as far as the mulching business? Are you still kind of early in that process? Can you provide us with any color?

Sure. This is Juan. The mulching business appeared to be a very well-run global business at GrainCorp. And if you see the earning generation and the cash flow has been very steady. So we would like to really get to know the business better over the future months. As I said, we have a weak exposure to this company. And, again, this looks like a very well-run global business. So we will take a look at it.

Okay. And then on the European oilseed business, you suggested that it was slightly better as well. Is there anything going on within that segment that we should be aware of? And should we expect that, that can continue into Q2 and Q3 of this year?

Yes. It is better mostly because of delays in South American export in meals. So I think they have less competition in that sense. So I think that eventually, it's going to catch up and North -- South America will normalize the export of meals, and then it will revert back a little bit. But at this point, it was a good quarter for Europe oilseeds, especially soybean.

[Operator Instructions] Your next question comes from Diane Geissler with Credit Agricole.

Can you just talk a little bit about maybe the GrainCorp acquisition, just in terms of what you expect with the rest of your capital spending program. And, in particular, if you could address additional investments in South America, Brazil, in specific.

Well, I'll take that one, Diane. If you think about our $1 billion that we were planning to spend in 2013, we've talked about it being 50% -- over 50% outside the U.S. and, particularly, in Ag Services and Oilseeds, which GrainCorp fits, but we did not include large acquisitions like this in that number. In the same token, if you think about it, since this is mostly in our Ag Services and Oilseeds area, we're taking even a further look at the pipeline of those investments. We're happy with what we've done, both last year and up through this year. But that team is going to think forward around integration and the good opportunities that come with the acquisition. So there may be a little bit of scaling back in the next opportunity in those 2 areas. But I think we can stick under that $1 billion and still find some great opportunity and returns within the GrainCorp acquisition.

Given the timing, the expectation that it closes in October, do you expect your CapEx in '14 and '15 will be low -- will be below the $1 billion rate?

We will be going through an updated planning process. As we move into the fall, we will incorporate GrainCorp into the planning process. And based upon that, we will come up with an updated assessment as to what our capital spending plan will be going forward.

All right. And you mentioned that fructose supply was tighter and that demand was strong. Can you talk about where your contracting is for the full year in terms of the pricing?

Yes, Diane. This is Juan. We're mostly done with our contracting, and we expect that from that perspective, our resulting margins will be in line with 2012.

Okay. And then just 1 further question on the corn processing group, in specific on ethanol. You did talk about the fact that you had slowed some of your plants and you were back online. But you mentioned in your press release some things you've done internally to drive the margins. Is that referring to scaling back production? Or were there other things that you did within your manufacturing base that improved your margin structure and that's something that will continue through the -- over the next few years?

The business did a very thorough review in December. And we continue with our energy efficiency, and we continue to improve our operations from a cost perspective. But that continues to accrue every quarter. We look at things like terminals. We look at the logistics. So it was an overall review of the business, inclusive of turning down some of the capacity. So I would say, a part of that was market recovery, and part of that, we have gotten better. And you will see that incorporated in 2013 results going forward.

Is there any way to quantify what the cost saving is from maybe some of the things you've done internally to improve the efficiency of your operations?

I'd rather don't.

[Operator Instructions] You have a question from Rob Moskow with Crédit Suisse.

Two questions on corn processing. The first, I think, Ray, you mentioned a $43 million open position on corn hedging. What does that mean for the rest of the year? Does it influence your margins for the rest of the year? Or was this just kind of a onetime thing? And then secondly, on ethanol, I wanted to know if there's any like -- if there's a disincentive for competitors of yours to chase production this summer just because perhaps, there's not a lot of capacity available on freight lines just to move ethanol around. I thought I picked that up somewhere and wanted to know, if there's not a lot a of railcar capacity available, do you think that will slow competition from chasing after margins?

Rob, let me take the first one, and Juan will take the second one. Just to be clear on the $44 million, this is actually related to an accounting hedge ineffectiveness. And so just for background, Rob, if you recall back in '10 and '11, we saw a lot of volatility in our sweeteners and starches line related on hedging. And so we changed the approach towards hedging by actually designating the hedges in order to obtain cash flow hedge accounting treatment. So in effect, by matching up our hedges to our corn requirements for the different sweetener contracts, we're able to defer gains and losses on these hedges and match it up with the actual contracts. There are situations when the cash and the futures prices diverge or, stated another way, the basis moves. And when that occurs, the accounting treatment actually requires that when ineffectiveness occurs, then you have to recognize this gain or loss in the current period income. So one way to think about this, Rob, is the fact that this $44 million charge really represents an acceleration of some impacts from the future into current period. And this will reverse itself out in the future, either through the hedge becoming effective again or through just economically, we'll be purchasing corn at a more advantageous price relative to where we thought. So stated another way, we should see this impact reverse itself out over the course of the rest of the calendar year.

Rob, on the second part of your question -- this is Craig. I would say that as we talked about earlier on the grain, we are going to add dislocations, as we have a little bit later harvest. We consider that problem a core competency of ADM. We have the railcars. We have contracts with all the major railroads. It will be difficult for people to perform in that environment, but we did it in '05, we did it last year and we'll do it again this summer and fall.

And your competition, you don't think they'll have that same access? Or is there plenty of capacity available during the summer to move corn around?

There is capacity, I'd say, but we have the asset base. I mean, when it comes to railcars and barges, and -- it's a core competency. We've made huge investments in them. And where those may be -- we can pull them from 1 area and put them in another. As I say, we've done that in every other inverse, and we've certainly got plans in place, both barge- and rail-wise to monitor and handle that situation.

And we have no further questions. I would now like to turn the call back to Patricia Woertz for closing remarks.

All right, good. Well, thank you, all, for joining us today, particularly at this late hour. Slide 18 does list our upcoming investor events. And as always, feel free to follow up with Ruth Ann if you have any questions. I really thank you for your time and continued interest in ADM. Bye now.

Thank you for participating. This concludes today's call. You may now disconnect.