Good day, ladies and gentlemen, and welcome to The Andersons, Inc. 2013 Third Quarter Earnings Conference Call. My name is [Kathleen] and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder this call is being recorded for replay purposes. I would like to turn the call over to Mr. Nick Conrad, Vice President, Finance and Treasury. Please proceed sir.

Good morning, everyone, and thank you for joining The Andersons, Inc.’s 2013 third quarter conference call. We have included a slide presentation that will enhance our talking points this morning. If you are listening and watching this presentation via our website, the slides and audio are in synch. For those listening via telephone and watching the webcast, you should follow directions sent to you in order to synch the slides and audio. This webcast is available through the Investors section of our website at www.andersonsinc.com. The webcast is being recorded and will be available on our website. Certain information discussed today constitutes forward-looking statements. Actual results could differ materially from those presented in the forward-looking statements as a result of many factors, including general economic conditions, weather, competitive conditions, conditions in the company’s industries both in the U.S. and internationally, and additional factors that are described in the company’s publicly filed documents, including its 34 Act filings and the prospectuses prepared in connection with the company’s offerings. Today’s call includes financial information for which the company’s independent auditors have not completed their review. Although, the company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be. On the call with me today are Mike Anderson, Chairman and Chief Executive Officer; Harold Reed, Chief Operating Officer; and John Granato, Chief Financial Officer. Mike, Hal, John and I will answer questions you have at the end of the prepared remarks. Now, I’ll turn the floor over to Mike for an opening comment.

Thank you, Nick. We are pleased to announce record third quarter results. The Ethanol Group had record results this quarter as they benefited from strong ethanol margins. The Rail Group also had strong results. They continue to optimize the railcar portfolio and lease rates. The Grain Group’s third quarter performance was good considering it was finishing the 2012 crop year which was significantly impacted by the drought. During the third quarter a few initiatives were finalized. At the end of July the Company and Lansing Trade Group formed a 50:50 joint venture and acquired Thompsons Limited, a grain and food-grade bean handler and agronomy input provider, headquartered in Blenheim, Ontario. Thompsons owns and operates 12 elevators which were integrated with 11 retail farm centers, two seed processing plants, five bean processing plants and a wheat processing plant. This acquisition provided additional geographic and climate diversification for the company and also provided an added presence in the edible bean market. In September the Rail Group acquired Mile Rail, LLC, a rail repair and cleaning provider headquartered in Kansas City, Missouri with two satellite locations in Nebraska and Indiana and mobile units in the Central Midwest. This acquisition raised the number of railcar repair locations the company has to 18 plus the mobile units. I also want to mention that on October 22 the company paid a cash dividend of $0.16 per share to shareholders of record on October 1, 2013. This was our 68th consecutive quarterly dividend. I will now turn this over to John who will provide details of the total company results.

Thanks, Mike, and good morning everyone. The company generated net income of $17.2 million in the third quarter or $0.91 per diluted share on revenues of $1.2 billion. In 2012 similar net income of $16.9 million was reported or $0.90 per diluted share on revenues of $1.1 billion. The gross profit for the quarter was down year-over-year by $5.2 million. Gross profit increased in the Grain Group by $5.8 million due to higher grain sales volume. However this was more than offset by $9.9 million decrease in Rail’s gross profit due to a significantly reduced railcar sales. Through the first nine months total net income stands at $59.3 million or $3.15 per diluted share. In 2012 net income through September was $64.5 million or $3.43 per diluted share. Total revenues of $4 billion for the first nine months of the year are $429 million higher than the prior year. The most significant year-to-year increase in revenue relates to our grain business as revenues have increased primarily due to greater sales volume. The higher volume has resulted from growth which includes the Anselmo train loading facility that opened in August of 2012, and the Green Plains Grain acquisition which was completed at the end of last year. Through September, gross profit was $255.6 million, which is a $11.2 million decrease from the same period of the prior year. Now to non-GAAP measure, EBITDA, earnings before interest, taxes, depreciation and amortization. The Company’s 2013 third quarter EBITDA was $46.3 million, an increase from the $44.3 million reported for the same three months period of 2012. Through September, the Company’s EBITDA totaled $154.4 million, which is comparable to the $152.7 million for the first nine months of 2012. Equity and earnings of affiliates, which excludes net income from non-controlling interest was up $16.2…

Thanks, John. Let’s start with the Grain Group, which reported operating income of $14.3 million this quarter versus $10.8 million a year ago. The Group benefited from a strong start to the harvest which resulted in higher gross profit on sales in comparison to the prior year. Space income was up for the quarter due to basis improvement. The Group also benefited this quarter from strong earnings from it’s investment in Lansing Trade Group. Grain Group revenues for the quarter were $766 million which is up from the $677 million reported in the prior year. This revenue increase is due to an increase in the number of bushels sold as the average price per bushel actually decreased. The Grain Group’s operating income through the first nine months of 2013 was $24.7 million on revenues of $2.5 billion. Comparatively the Group’s operating income through September of 2012 was $45.5 million on revenues of $2.1 billion. The year-to-date results were negatively impacted by the 2012 drought. Storage capacity at the Grain Group increased to 141 million bushels this quarter from $112.7 million bushels in the same quarter of the prior year due to growth. The Anselmo train loading facility was opened in August of 2012 and the assets acquired from the former Green Plains Grain Company in Iowa and Tennessee were added at the end of 2012. This growth has also led to an increase in bushels shipped in comparison to the prior year. The recent acquisition of Thompsons Limited did not increase reported capacity as it is an equity investment. According to the USDA report issued on the 4th of November corn harvest is 73% complete. In comparison corn harvest was 95% complete last year at the same time. Bushels handled this year are up primarily due to the size of…

Thanks, Hal. At the end of the third quarter net working capital was $232.9 million, a decrease of $20.5 million from the 2012 third quarter. Current assets totaled $895 million on September 30, a decrease of $294.9 million from the same period last year. This change was driven by $253.3 million decrease in inventories, which was primarily a result of lower grade of inventories and lower grade prices at the end of the third quarter. Cash and cash equivalents end of the third quarter at $134.4 million, an increase of $54.1 million year-over-year. Our current assets increased $185.8 billion, year-over-year driven principally by a $97 million increase in property, plant and equipment and a $72.6 million increase in equity method investments both as measured year-over-year. As a result, total assets on September 30 were $1.9 billion a decrease of a $109.1 million year-over-year. Current liabilities at the end of the third quarter were $662.6 million, a decrease of $274.5 million from the prior year. At the end of the third quarter the company had no borrowings under the short-term portion of the line of credit this is decrease of $275.5 million in the same quarter of 2012. the average interest rate for the third quarter 2013 period was 1.9% which is down from the previous years’ rate of 1.95%. Long-term debt ended the third quarter at $381 million, an increase of $600 -- I'm sorry, an increase $68.6 million from the prior years’ third quarter. At the end of the third quarter the company had no borrowings under the long-term portion of line of credit this is a decrease of $35 million in the same quarter of 2012. The average long-term interest rate for the third quarter 2013 was 4.5% which is down from the previous years’ rate of 4.9%. Total equity as of September 30 was $670.3 million, an increase of $67.9 million from the prior year. Our long-term debt to equity ratio was 0.57 to 1 on September 30. Total committed lines of credit under the company’s syndicated facility remained $850 million, of which $735 million are short-term and $150 million are long-term. Mike will now make a few comments before we take questions.

Thank you Nick. Today I’d like to provide an outlook for the last quarter of 2013. First, our Agricultural Group should benefit from the record corn crop that is currently being harvested. We continue to be pleased with the record results being seen in the Ethanol Group and are still seeing good margins. However, we are very aware that the ethanol market is volatile making future margins difficult to predict. We anticipate our Rail Group having a very good, but gains on sales are not expected to be material during the quarter for the other two groups we expect typical fourth quarter results. That concludes our prepared remarks. Hal, John, Nick, and I will now be happy to answer any questions you may have. So, Kathleen, we’ll turn it back to you.

Thank you. (Operator Instructions) It is from the line of Brett Hundley from BB&T Capital Markets. Please go ahead. Brett Hundley - BB&T Capital Markets: Hi, good morning gentlemen.

Good morning, Brett.

Hi Brett. Brett Hundley - BB&T Capital Markets: Just a quick detailed question, did you give the gains on non-performing leases realized in Q3?

Gains on.

No, we did not disclose that.

Kind of lease.

Yeah we did not disclose that, this is Nick in the press release and I don’t – not sure if it will be in the Q or not. Brett Hundley - BB&T Capital Markets: Okay I mean, is on a relatively small compared to the gains on sales on railcars that?

I understand the context of your question and I better not mischaracterize at this moment but I would we can get back to you offline. Brett Hundley - BB&T Capital Markets: Okay.

Yeah. Brett Hundley - BB&T Capital Markets: Moving on you know reports of a wetter crop this year I’ve heard of some elevators initially offering free drying so they can get their hands on the crop given set of basis or trend, have you seen this continue at all I mean, normally a wet crop would probably mean better earnings for you in Q4, but I just wanted to get your take on what you’re saying?

Yeah thanks this is Hal. I would agree that we saw some highly competitive drying rates early on to get bushels accumulated to graining elevators. And some of that’s continued so what I would suggest is as empty as the pipeline was people really want to get their hands on the early bushels and so they were using drying rates and lot of cases to do that. so, the impact of that is as you suggest, yes. Brett Hundley - BB&T Capital Markets: Okay, okay and that’s continued somewhat.

Yes. Brett Hundley - BB&T Capital Markets: Okay, and then just kind of jumping around in Fertilize and Plant Nutrients, given what’s happened from a pricing standpoint I'm just wondered if you can address whether operators such as yourself would still want to work just in time or if you would switch may be to more buy and hold just curious on what that strategy looks like and may be what are your expectations on pricing moving forward end of the planting season?

Yeah I don’t think that our approach to the marketplace has changed a whole lot, I think if you go back a few years obviously everyone in this space is looks at risk mitigation for substantial moves and we’ve made some good improvements and what we’ve done there, but the rest of our balance between holding inventory in our inventory space and providing product at harvest are that planting time hasn’t really changed much. The declining prices in recent months or so or even across most of the year obviously have an impact and whether or not appreciation is earned on inventories held, but there is not much we can about that that’s been the – the way the market much of this year as far as declining prices. Yeah we’re still relatively cautious about our positions because of that. Brett Hundley - BB&T Capital Markets: Okay, appreciate that. And then, Hal I did have a question on rail, and then just one other quick on ethanol, but as it relates to rail and we’ve read about some design improvements that are being talked about for some of the tank cars and I understand the mixed dynamic as you move into 2014, but is there a concern at all for you guys related to the tank car market because of that?

This is Nick, I'm going to drop it real quick excuse me, Hal.

All right.

On the open slide deck for this call and on our investor presentation relatively you’ll be to find a slide that had to speak to the composition of the railcar fleet and specifically to the rail – to the number of cars or a tank cars and the number of tank cars we have are skated across three broad categories and so while I think you’re asking a good question it does not relate to all tank – tank category or tank car categories equally and you’ll see that our overall number of tank cars is I believe under 2800 cars out of that 22,000 that Hal referenced earlier.

Yeah and to go back to your specific question there is there – we don’t see anything significant relative to our fleet to the issue you raised. We are doing now entering into more repair work on railcars within our repair facility. So, in essence to some extent some of those things going on in railcars are, will be a benefit to our repair\ facility operating business. So, it’s actually a bit of a positive to us and not structurally very difficult for us to look forward to so. Brett Hundley - BB&T Capital Markets: Okay I appreciate that and then I just have a kind of two part question on ethanol. You look closed in late August but you look I get to know the impossible of lock-in on positive margin for October which clearly would have been below spot level so I just wanted to make sure that you guys had continued to stay on the spot market is that pretty much correct?

In general this year we’ve been in the spot market but there is always very interested that month-to-month. Brett Hundley - BB&T Capital Markets: Okay and then, Hal I know you’ll love this question, but you addressed that somewhat related to the potential EPA ruling and how that could affect you and your industry going forward I mean, there is some other potentially positive is out there you have may be mild picking up on lower gas prices people are talking about an increase in exports. So you talked about may be positive margins into 2014 but can you address the potential EPA ruling further and kind of what that means for the industry?

Well I think in general sense for 2014 we don’t see a substantial impact for that change. The supply and demand balance for what needs to be blended in 2014 what we expect to see in imports and exports change and what we also as you noted expect to see in just demand from driving miles looks pretty well balanced for 2014. So, and at the same point in time we’ve got relatively cheap ethanol production prices compared to gasoline prices substantially below gas prices so the blenders are making good money by blending all they can I think the current situation has like I said, there is plusses and minuses and I don’t think that the potential EPA change out ways the positives in the marketplace. Brett Hundley - BB&T Capital Markets: Okay, thanks for taking my questions guys.

Thanks.

Thank you Brett.

Thank you. The next question is from the line of Brent Rystrom from Feltl. Please go ahead.

Hi, good morning guys.

Hey, Brent.

Good morning.

I just got a couple of quick questions for you. From a broad thematic perspective probably Mike and Hal, do you see grain really as the big driver the Grain Group is the big driver for 2014?

This is Mike, grain should be a good driver for business in 2014. so, yes.

From a simplistic perspective looking at the same spot next year I'm trying to think what could be the greatest disruptor to the margin, is it potentially somewhere not – so much margin but margin in sales I would assume cycling again sharply lower potash and phosphate prices in the first half next year will present kind of a sales comparison issue, is that fair?

Sharp, you used the word sharply low I might not use that, but yes I would agree that will be lower and that will be a difference that we’ll need to compare in the first quarter or two next year.

Yeah you’ve got – likely we’ll see may be a little lower corn acre so you get a little volume you get a little lower price I guess may be a little lower volume that in the first half times a little lower price you get on revenue number that could be lower. And we’ll have to see what happens on the margin side, but if we do have dropping prices it certainly reduces the ability to get appreciation. Overall I mean if I had to look have to say it should be an okay fertilizer yield.

Yeah and that I would agree quick question I have is a follow-on to that then, how do you guys manage, how do you – manage your expectations for Fertilizer margins, do you try to identify here so much margin per ton we want to have or do you identify a margin rate wherein and just attached to a pricing?

Well we it’s a bit of a matrix I guess as you’d imagine because it’s the product mix as well there is certain manufactured products, certain micronutrient products and there is a whole variety of different things that we do but it’s on more than per ton by product basis that we look at and we look at it very specifically to our geographic areas and I believe that pretty stable and solid margins as we’ve noted even this year. So, that’s part of the management process we go through on the margins.

And that was going to be my next question Hal is, I've seen stronger nitrogen prices at my (indiscernible) of pricing surveys for dealers in the eastern corn belt and I would assume that’s your, your big, your strong, your early harvest coming off are you seeing a pretty good application for fall of nitrogen?

I would just I would say it’s normal or less than normal. There has been some good weed acres plant that but so we have some expectations but actual application and purchases for the fall have I would say been at best kind of in the middle of the range.

Great, and then the final set of question asked earlier about your green elevators. Are all of your green elevators are natural gas lines or do you have anybody exposed to propane for drying?

Yeah we do have a couple of propane places and that I'm certain of.

Most of gas.

Most of natural gas.

All right, and any issues with the propane suppliers at those facilities?

No, we went on.

Great, thanks guys.

Thanks.

Thank you. the next question comes from the line of Ken Zaslow [BMO Capital Markets]. Please go ahead.

Good morning this is Andrew Strelzik for Ken.

Hi Andrew.

Taking a step back if I look at your results versus the guidance you provided on the last call, your underlying grain and rail performance was much better than expected, can you just provide some color about what changed during the quarter since you provided that guidance?

Got it, you want to talk about the guidance first I mean.

Well we don’t give guidance but anyways thank you Hal.

Yeah that the grain one was I would say really twofold we’re at the end of the drought year of last year with some pretty low expectations as to what can happen in the marketplace since some high risks we did a nice job I think managing certain risks of the inverse to mitigate risk we had some good early harvest in some of our new southern assets in Tennessee and elsewhere that allowed us to take advantage of some early premiums a little bit better space income than we thought a few more sales than we thought and good results from Lansing. So that I mean that’s kind of combination of things in the grain business. The rail.

And I think rail in general I think the quarter went as expected we did highlight we got a couple of in the lee settlements that impacted results in the other income line and I think that was where we’re one the key drivers of the different.

Okay and bigger picture when I think about the corn crop you have a late harvest and slow farmers selling on one hand, and of the big crop and a nice carrier on the other hand, does that change the earnings potential in grains over the next 12 months or is it more of a timing impact and how should we think about the environment in the context of the $0.25 to $0.50 of which a range that you provided?

Yeah good question it’s the largest piece of that is the basis of appreciation piece and the timing of when that begins and how much moves in December versus January or fourth quarter versus first quarter is always just – it’s kind of crapshoot literally it’s the current expectations are for the harvest to be virtually done here soon whether it’s been in conduces or much of it will be undercover here in the next week or so. But the basis appreciation piece is just in determinant as are the sales that we make going forward for next year as well. So, it’s not likely something that we or anybody else in the market knows very well until you get well into December.

And I’d just add a little bit to that. Just confirm what Hal is saying. There is a timing element that seem to have in almost every year on is it December or January that sales occurred into basis appreciation so that can be a flip from year-to-year but in the crop year it’s a no consequence. I would add that also encourage you look at the future spreads versus history and we are again inverses in soybeans would suggest no care, no suggest anything no carrying. And there is I call somewhat average carrying charges in the wheat market in the corn market but not full carrying and not carry so on addition to basis appreciation within that range we gave you there that the spread portion of it from corn and wheat is average like.

Okay, great.

And well below the huge years we had wheat that we talked about in the past that we said, especially the one year is kind of get that out your comparable – comp thinking. So it’s okay.

Okay, great. I appreciate the color.

Yeah.

Thank you. The next question comes from the line of Farha Aslam from Stephens, Inc. please go ahead.

Hi, good morning.

Hi Farha.

Hi Farha.

I had this question starting with the Grain Group your equity income line was significantly higher, could you talk what if that was constant at all of if that was really ramping Trade Group what grows that in case of Lansing and how sustainable that is?

We broke out that trade? We haven’t broken out these specifics. Are you – yeah.

For our….

May be of course she was asking about grain.

Correct, yeah.

Yeah.

Correct.

Which is not the all our season there is a few different pieces in the grain one and I think we commented that the performance year-to-year in Lansing for that period of time was much improved so that will have a big impact on what is specifically in that line.

And how that well kind of what drove that in improvement at Lansing?

Lansing is the opportunistic that’s the reason why we’re there and what they do well and there is a chance for the opportunistic inverse merchandise the grain when it’s out of market regions and need to be put brought together that’s what they do well, transportation and arbitrage opportunity. So, there was some big inverses that were taken care of in that quarter plus actually some of their other businesses did quite well also, they executed well on a number of fronts.

And so would you say that we should expect that going forward for next quarter as well. Is that – are those conditions continue…

Farha, we - you’ve got the benefit of I mean Lansing is done well and there has been variability in the quarter-to-quarter results. We’d expect them to do well, we’d expect them to continue to be variable.

And then going into the ethanol division, clearly on the pre-tax line, your ethanol division did really well because of equity income, you’ve definitely noted some variability on the gross profit line where sequentially store gross profit in ethanol was down versus the second quarter, where you’d expect that to be up given your pre-tax. So I was just wondering the disconnect between your gross profit line and your pre-tax line. Is that the Denison plant, is that plant running well?

Actually I think it’s the combination is what you’re looking at because the Denison plant is not included in the normal gross profit line because it’s consolidated. So there is a little bit of difference back and forth there, I think we probably need to spend a little time, we could spend a little time with you to explain not right here, we have to go back to those details. But some of that does have to do with the fact that the Denison plant is consolidated and not part of that LLC equity line. So we could probably talk with you about some of those specifics a little bit off-line.

Right. It is consolidated that’s why I’m wondering is why they dropped sequentially from the June quarter to the September quarter in the ethanol profit.

Yeah.

Usually that should have been a positive because of….

Yeah. There was one adjustment in our corn pricing that is I guess account for what you see in there that is a quarter-to-quarter adjustment and how the corn pricing flow through the Denison plant so yes there was that adjustment, negative adjustment into third.

It was a negative in the third quarter.

So when we look at the fourth quarter and year, how should we think about Denison impacting gross profit just overall your gross profit on and how variable we should think about that ethanol gross profit line, historically it’s been very consistent because that came out today with fee income line..

That’s just fee income from Denison.

No, it…

Fee income from ethanol facility…

Oh, yes.

Before Denison.

Yeah before Denison, yeah.

Fee income, now its fee income plus the Denison operating profit and so that adjustment that was made in the third quarter negative adjustment to third quarter is over and done with. So that gross profit from the Denison plant for Q4 will be more aligned with just what the margins are in the marketplace for Q4 on top of our fee income as a company that we would receive.

And just a color on Thompson going forward, when – is there any seasonality to Thompson as we think about that business contributing to earnings that we should think about?

The seasonality in Thompson isn’t a lot different than our other businesses. We have a good segment of the company is a grain business which obviously will handle volume in the fall and had time for wheat and there will be spaced learning just like our grain business, there is a Plant Nutrient business, that will have a spring planting season just like our Plant Nutrient business here. The one thing that is a lot less or is not as volatile, there is a good segment of that coming into that, that’s the edible food bean business and that’s more of a balanced set of numbers across the timeframe of the year. But the majority of the business is a lot like our grain and fertilizer business and does have the seasonality.

Great. Thank you very much.

Yep.

Thank you. The next question is from the line of Christine Healy from Scotia Bank. Please go ahead, Christine.

Thanks. Hi guys.

Hi, Christine.

Hi there. I just want to first add on to what Farha asked regarding Thompson. So the acquisition closed in late July. So you would have had two months of results in the third quarter. So can you give us like some sense of how the business is performing in its early days with the company and then also second just confirm that any contribution from Thompson is being recorded in that earnings from equity affiliates and the Grain Group?

Yes, you are correct, that’s where it is being recorded. We did have about two months worth of performance in there, we also had all the expenses of closing the deal and those the transitions, all those transitions going forward in that same period of time as well. So..

So we were just below breakeven on our portion of that in the two months of the second quarter. We’d expect to be accretive for the year in the fourth quarter.

Yeah, yeah.

And how is the integration going, is everything going as planned there?

Actually it’s going quite well. We’ve got some really good work going on, they integrate all kinds of things from both of the company, The Andersons and Lansing Trade Group with the team up at Thompsons, we’re all quite happy with how that’s going.

Okay, great. And then I just – turning to free cash flow, I just want to get a sense for your free cash flow, I know for the last two quarters your inventory has been a couple of 100 million below the prior year. But if we look to Q4, Q1 grain prices are low but you should have much higher volumes. Can you give us a sense for how we should expect your working capital to trend here over the next couple of quarters?

Christine, are you asking on a net basis between current assets or liabilities, could you just..

Yeah absolutely yeah Nick I’m just trying to get a sense for your free cash flow that’s going to be coming through, should we expect that same trend to continue or your inventory will be lower or that be little lower grain prices, will that be offset by the higher volume?

We do have the seasonal phenomenon which you see again of September balance sheet of having a substantial green payables at this time of the year and that will continue to build between now and the end of the year, of course those payables will need to be funded in the first quarter and that’s a normal kind of pattern. I would say that the levels are read today, should be the levels that we are in, roughly in the range that you see in the first quarter and second quarter from a GAAP reported working capital perspective, again I’m speaking range not target.

Okay. That’s helpful. Thank you. And then just last question I’m sorry if I missed this from your opening comments. I just wanted to get an idea, there is $6.3 million in cost in the other segment, is that related to the Thompsons acquisition and fees there. Can you give us a sense for that?

Yeah.

Is in that other corporate segment if…

Yeah, yeah.

John will handle that.

There was – some of that is really just timing. We have some benefits, charges that we hold at corporate that haven’t been distributed yet. There were some adjustments really about a good portion of that really is just timing I think in there in addition because of the years some of the incentive comp, accruals are up a little bit and also our [IT Refresh] project, our ERP project is starting to flow through that line as well and those are the big ones.

Okay. That’s helpful. Thanks guys.

Thanks.

Thank you.

Thank you. The next question is from the line of Eric Larson from CL King. Please go ahead.

Hey good morning everyone. Congrats on a great quarter. I want to pursue the basis issue, just a little bit more, given that you’ve got some early harvest in some of your new Southern assets. Were you able to pull – did you pull some fourth quarter basis income on a mark-to-market calculation into the third quarter from Q4?

I would say that it’s not likely or not significant.

Okay. It’s just hard to tell from a timing of how it all work.

Right.

And you got into a little bit of a discussion or Mike certainly did, that right now your corn carry is only about average it is, it’s good to have positive carry but other than the inverse. But if we do, do have a 14 billion bushel crop and when we were in that kind of that 50% to 60% harvest completion period. I’m really surprised that we didn’t get a better carry opportunity. What might be going on is if – people’s inventory so depleted from the drought that some of the stuff just isn’t coming to market or what is maybe an explanation of the carry issue?

Yeah, I think you hit it and that’s the largest piece of it. The pipeline was so empty from all the way from the farm beans through the barge fleet on the river system to the export elevator into the processors it was so empty that the first part of harvest in virtually all locations disappeared into that pipeline at a rate that was pretty alarming I think to everybody it was, that’s just a phenomenon that occurred it was badly needed and it filled the pipeline and filled the space and disappeared quickly at the beginning so that kept it from getting to the point you suggested could have been a very large basis move down.

I get that you have the bean dynamic which is, beans just are coming in and going out nobody is lodging those in the space so its not taken up space because the market need the beans now. And we are seeing the impact which we will feel for sometime of the expansion of grain storage base in the last four years. We’ve seen this episodic thing occur where you get a bunch of space and it takes a while for supply demand and product to catch up with it but we also what we don’t know yet its early November and just the last several days we’ve been pleased continue to be pleased with the flow of grain, corn in particular that continues to come in the basis levels that are still relatively low but there is a lot of space out there and so at least we’re able to still be accumulating corn at decent levels. We’ll see where she goes from here. That play helped me, I don’t know what the numbers but let’s just use a number a billion bushels o corn and beans that consumed by the supply chain really kind of hit the front end of harvest even encouraged somebody mentioned cheaper drying, no drying rates early. It just came and left, it was gone it didn’t lodge anywhere and so that pressure disappeared on the system. So I would say its okay well thank goodness we’re recharging the system that a good thing for us as we point to the future but as you said Eric probably be so much average in the carry we are in this year.

Yeah it clearly has surprised me a little bit. You mentioned Mike I don’t want top beat this point to dust but. There has been a lot of building of storage but it isn’t only just commercial it isn’t the ADMs and stuff of the world it’s also the farmers have built a lot of storage…

Absolutely, absolutely.

Two to three year estimate as to what the incremental storage, you probably know the commercial number you have to make a guess on, on farm storage numbers but do you have any sort of rough estimate of what storage increase has taken place in the industry in the last year and a half two years?

No, we wouldn’t hazard a guess at the number. It’s obviously been substantial you can tell that from a lot of different anecdotal evidence but we wouldn’t hazard a guess at the number.

Yeah well you can tell from the basis, you can tell it right now, is that coupled with you’ve got to the drought, so it’s just hard to kind of get a feel for it but.

Yeah.

It’s a big increase.

But the only work we do know the way its setting up it is we’re going to have roughly between – we’re going to have roughly call 1.5 billion more bushels in storage going into next year’s harvest.

Yeah, that makes sense I mean, I quite frankly was expecting with this harvest would see cash prices dip below, you don’t have a three handle on it and we haven’t really seen that but. The final question then is the one area well there is a couple of small areas where the harvest was suspect and obviously Iowa was part of Iowa was one of them. What is under your Denison plant, what do you guys, what are your farmers saying about what their yields are, are supplies good, so what are you seeing in Iowa specifically with Denison?

Yeah well whether it Denison or all of our Iowa facilities I think what we found during the harvest is that the harvest yields have been better than we thought they were going to be when we are sitting here in Labor Day worried about the dry weather surprisingly so.

Yes, I would agree with that. Okay, well thanks for the confirmation. Thank you very one.

Yes.

Thank you, Eric.

Thank you. I would now like to turn the call over to Mike Anderson, CEO and Chairman.

Thank you very much. I want to thank you for joining us this morning. Also want to mention for those that are interrupted. There are seven appendix slides to this presentation available on the andersonsinc.com website at the Investors tab under the third quarter earnings call replay. Our next conference call is scheduled for Wednesday, February 12th at 11:00 a.m. Eastern Time to review our full year 2013 results. We hope you’re able to join us again at that time and until then, have a great day. Thanks.

Thank you.

Thank you for joining in today’s conference. This concludes the presentation. You may now disconnect and have a good day.