Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Hormel Foods Fourth Quarter 2018 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded on Tuesday, November 20, 2018. I would like to turn the conference over to Nathan Annis, Director of Investor Relations. Please go ahead, Mr. Annis.

Good morning. Welcome to the Hormel Foods conference call for the fourth quarter of fiscal 2018. We released our results this morning before the market opened around 6:30 AM Eastern. If you did not receive a copy of the release, you can find it on our Web site at hormelfoods.com under the Investor section. On our call today is Jim Snee, Chairman of the Board, President and Chief Executive Officer and Jim Sheehan, Senior Vice President and Chief Financial Officer. Jim Snee will provide a review of each segment’s performance for the quarter and our outlook for 2019. Jim Sheehan will provide detailed financial results and further assumptions relating to our outlook. The line will be open for questions following Jim Sheehan’s remarks. As a courtesy to the other analysts, please limit yourself to one question with one follow-up. If you have additional questions, you are welcome to get back into the queue. An audio replay of this call will be available beginning at 11:00 AM today Central Standard time. The dial-in number is 888-254-3590 and the access code is 9962477. It will also be posted to our Web site and archived for one year. Before we get started, I need to reference the Safe Harbor statements. Some of the comments made today will be forward-looking and actual results may differ materially from those expressed in or implied by the statements we will be making. Please refer to pages 35 through 41 in the Company’s Form 10-Q for the quarter ended July 29, 2018 for more details. It can be accessed on our Web site. Additionally, please note the Company uses non-GAAP results to provide investors with a better understanding of the Company’s fourth quarter and full-year operating performance. These non-GAAP financial measures should not be considered a replacement for and should be read together with our GAAP results. Discussion on non-GAAP information in addition to reconciliations to GAAP results are detailed in our press release located on our Web site. We will refer to these non-GAAP results as organic net sales, organic volume, adjusted segment profit and adjusted earnings per share. I will now turn the call over to Jim Snee.

Thank you, Nathan. Good morning everyone. Throughout the year, we made significant progress towards our long-term vision as a global branded food company. With an emphasis on brand building, innovation, acquisitions and intentional balance, our long-term approach allowed us to manage through difficult situations, such as commodity market volatility, increased freight and global trade uncertainty. This year was marked by many milestones. We made the largest acquisition in our Company's history with the purchase of Columbus Craft Meats, and we also successfully integrated both Columbus and Fontanini into our supply chain. We reinvested a record amount of capital back into our company to increase capacity and improve the efficiency. Major capital projects in 2018 included the Dold foods, pre-cooked bacon expansion and a highly automated Holberg facility. We also delivered many innovative new items to the marketplace, items such as Herdez guacamole salsa, Natural Choice snacks, Applegate Naturals products in the retail space and Fire Braised Flank Steak for food service customers. On our financial perspective, we delivered record sales, earnings and cash flows. 2018 also represented the 90th consecutive year of paying a quarterly dividend. Our strong financial results and confidence in the business allowed us to announce our 10th consecutive double digit increase in the dividend for 2019, which will mark our 53rd consecutive year of dividend increases. By many measures, 2018 was a success. Refrigerated foods made impressive contributions to our performance with significant growth coming from value-added brands in retail, deli and food service. However, there are areas of the business that did not meet our expectations. Jennie-O Turkey store had another difficult year as they manage through continued oversupply in the Turkey industry. And CytoSport had a disappointing year with declines in powder and single serve ready to drink product lines. We are taking appropriate…

Thank you, Jim. Good morning, everyone. Fiscal 2018 was a record year for sales and earnings per share, operating cash flow and dividend. Our financial strategy is aligned with our vision for the Company. The balance sheet is strong and capital allocation decisions support the long term growth strategy. Volume for the fourth quarter was 1.3 billion pounds, a 1% decrease compared to 2017. For the full year, volume grew 1%. In the fourth quarter, sales were $2.5 billion, a 1% increase. Sales for 2018 were $9.5 billion, a 4% increase. Net earnings for the fourth quarter were $261 million, up 20% compared to last year. Full-year earnings were $1 billion, also a 20% increase. Adjusted earnings per share for the full year were $1.89, a 20% increase. In the quarter, we recognized non-cash impairment of $17 million or $0.03 per share associated with the CytoSport business. The impairment was recorded in the grocery product segment. For the full year, SG&A excluding advertising was 7.2% of sales compared to 6.8% last year. The impact of acquisitions drove the increase. In 2019, we expect SG&A as a percentage of sales to decline as the company continues to focus on funding efficiencies throughout the organization. For the year, advertising was $152 million compared to $136 million last year. We continue to shift investments between advertising and trade to attain the highest return. In 2019, we plan to use advertising to support such brands as SPAM, Hormel pepperoni, Hormel Natural Choice, Columbus and Jennie-O. General corporate expenses increased in 2018, primarily due to higher employee-related expenses, including the universal stock option grant for all employees. For the full year operating margins were 12.6%, 140 basis points lower than 2017. Higher freight in all segments and whole bird declines at Jennie-O contributed to the…

[Operator Instructions] And we'll take our first question from Michael Lavery with Piper Jaffray. Please go ahead.

Can you clarify a little bit how we should think about the supply chain savings? You've talked about 75 million, but it doesn’t seem like it includes any bigger more restructuring type savings. Is that something that should likely down the road or what's the right way to think about that?

I think the best way to think about it Michael is we started-off the year saying the thing that we had to get right was the structure and the process, and making that we could indentify capture, validate and strategically reinvest the savings. So the team is thinking differently as we look to optimize procurement manufacturing and logistics. And certainly 2018 keen focus on labor, overhead, supply. Of course, let's not forget the fact that we put them in the middle of the freight increases and the Fremont divestiture. So they have a lot going on. 2019 we'll have some of the things. But I will tell you that they're also starting to pivot towards the bigger and more structural thing. So an example of that would be as the baseline for freight has probably shifted over the long-term is making sure that we have the most optimize network possible. And so what does that look like for a distribution center, how do we travel fewer miles over the long-term. So, yes we are getting to those bigger and more structural issues. But right now, it is a combination of some of the short-term and long-term things.

And your number for '19, could that have upside as you get into some of these projects later in the year or do you have a pretty good best amount of visibility and those will be further down the road?

Those will be a little further down the road. I mean for us what is realistic so that we know disciplined and thoughtful, and we'll know more as we get closer.

The other item I would add, Michael, is that $75 million we're talking about excludes any previously announced synergies that we have in our acquisitions.

And will take our next question from Robert Moskow with Credit Suisse. Please go ahead.

Couple of things on the guidance I was curious about. What is -- is that the sales guide is pretty lofty, especially in light of the fourth quarter numbers being below expectations, particularly on price. Can you give us a little more color on how you got there? And are you expecting some price recovery in the commodity markets in order to get there? And then secondly on the guide, you said that you thought hog prices would be up, but that the composite would be lower for '19, and how you've got that assumption as well?

As we've looked across the different segments, we look at the sales guidance as realistic. When we think about grocery products coming off a weaker Q4 and really the driver there was the fact that we did have some incremental sales in Q4 of '18 -- we didn’t have in 18 that we did have in '17, but we think we're set up really well because the baseline for our GP business are very healthy. So heading into 2019, we expect that business to show mid single digits growth. Refrigerated foods, it’s a lot more the same in terms of the value-added growth that we expect to see. We’re not expecting anything crazy and JOTS. I mean we've got low single digit increase there, which we believe is very achievable. And then our international growth on the top line is really in line with our historic expectations of high single-digit. So do believe the guide on the sales is very realistic and achievable, and maybe I'll ask give you little more color on your other question.

We expect the hog industry to be similar to the structural makeup of 2018, including the supply growth and the volatility based on the capacity coming online. Hog prices right now are low we expect them to be up in the low single-digits. Regarding the spread, we expect the higher supply, the beef that will be available because of the additional capacity coming online while lower the commodity prices, including we expect delis and trimmed hog to be down in 2019.

And have you put any assumptions for China's hog herd disease issues, and what that might mean for American exports? Is that a positive or negative or too soon to tell?

It's really too soon to tell. And I would tell you, Rob, we have limited African swine fever risk assumed in this plan, because of exactly what you said. It's a risk to the China business but potentially an opportunity for our pork export business. We do believe that if it is a risk to China that we'll be able to take some pricing in line with the rest of the market, but it s really too early to tell. But we're watching and it's certainly in our radar like I’m sure it is everyone else's.

And we will take our next question from Thomas Palmer with JPMorgan. Please go ahead.

I just wanted to ask about the first quarter set up. In the past, you provide some commentary and the queues around the call and how you’re seeing margins or EBIT overall trend across the different segments. I was hoping you could provide that here again on that first quarter set up?

Yes, so we haven’t really done so much by quarter. Last year, we talked a little bit about JOTS just because of the very unique situation we were in and the recovery was heavily skewed to Q2. I would tell you or I would guide you to the couple of things that we have called out for Q1 that will impact the business as we did have the benefit last year of a mega tax credit and then you heard in Jim Sheehan's comments the fact that we will have some Fremont closing expenses in Q1. So obviously, we're going to have that as a headwind early in the year.

And then just to follow-up on that on the Muscle Milk side, you mentioned meaningful contribution for the year. Is that both top and bottom? And can you maybe talk about what you're already seeing in that business in terms of its inflection?

So that would imply top and bottom line growth from the Muscle Milk business. And again we've talked about several different components the part of the business that has grown throughout the year and continues to show growth is really the take home or the multi-pack Tetra business. You've seen that in more food drug and mass as they expand out their sports nutrition category, that business has been healthy and will continue to be in 2019. We've seen recovery in the ready to joint space. So we saw growth in the back half of the year like we had said we would, and we expect that to continue in 2019. The area of the business that continues to be under pressure now is the powder business, and really the driver there is just that shift from the traditional brick-and-mortar specialty channel into more online business, and we have spent time and effort and resources building-up that muscle for that digital competency that supports the e-commerce business.

And we'll take our next question from Akshay Jagdale with Jefferies. Please go ahead.

I wanted to ask about the Turkey business. Obviously, there has been some headwinds from the industry and the commodity pricing a little bit. Can you -- as you’ve gone through this cycle, which has been quite long. Can you talk about what -- maybe helps us dimensionalize the company specific issues cost wise that you think you can address going into next year. I mean when you go through a down cycle, I'm sure you tighten the belt a little bit more. But there was also some specific cost issues in your grow out division. So can you help us put into context where we are in turkey, genuine turkey margins and how much of the -- underperformance is industry versus company specific high-level?

I think the key driver in JOTS is that we need better fundamentals in the industry. I mean that really is what is going to get us where we need the business to be. And so we've seen some of that happening, but we're still disappointed in the pace. And so we're looking into 2019, we are just projecting a modest growth. But in that modest growth, we know that we'll continue to outperform the industry. And so in some of the areas that Jim mentioned, Akshay, we continue to have a keen focus on security for our facilities to make sure we can avoid another avian influenza outbreak. We had talked about the work that we’re doing in the raise without antibiotics initiatives. And our team continues to make progress and they are making it more efficient and cost-effective. Clearly, they're impacted as much as anyone on the freight side of the business, and so that's not unique to them. And that’s really a companywide initiative on how can we find those mutually agreeable solutions with consumers, while still working in the long term to optimize our network. The other part is we see it as a business that continues to be on trend. We invested in the brands this year. We'll be reinvesting in the brand again in 2019, as we know, Turkey is on trend. And so we have to continue to outperform the industry, and we think the things we've done put us in a position to be point to accelerate our performance, our outperformance versus the industry.

Akshay, one item that I would add is that we’re very excited about the new Melrose plant coming online in the spring. That’s a state-of-the-art plant that will really take our efficiencies to a new level. So that will, as Jim said, the business has outperformed the industry for a long time. This is going to allow us to increase that outperformance.

And just one follow-up on what Rob was asking about, but maybe in a different way. Looking through your segments, your business is so unique with the exposure to commodity meat prices that it's hard to really tell what's happening with full price. So can you at high level give us sense what you’re seeing pricing wise as it relates to freight cost being up and overall food industry inflation has picked up. And so we feel like all the companies are talking about taking pricing. But what's your take on where we are in that cycle? Are you finding more success now than six months ago? Or how would you characterize the environment?

I think we’re no different than anybody else in that. We’re looking at all of these macro factors. So whether it's African swine fever, freight, tariffs, exports. It's clearly a dynamic situation. And we continue to look at it really on a category-by-category basis. And so refrigerated foods and JOTS are more market based, closer to the market. And so you do have pricing that will move a bit more frequently. GP pricing really is less market driven and impacted by the macro issues that we're talking about. And we took pricing obviously late '17 early '18, and we are looking at only categories by category basis. And we don’t just look at pricing. We’re taking that holistic view of each of our brands in each of our categories understands the levers in regards to trade, other revenue growth management initiatives, and obviously making sure we understand the corresponding projected elasticity. And I guess I would really look the fact that pricing has never easy, never has been so think it ever will be. But the fact that we have number one and number two brands also puts us in a very solid position to make sure that we are taking those leadership roles.

And just one last housekeeping one, the guidance for next year order of magnitude in terms of the profits that will be gone as a result of the three months deal. Is it roughly still -- I forget. But did you say $10 million? I mean, I know the costs are 12, but what's the profit contribution roughly that you are assuming will not be in the P&L next year?

We discussed in the script that commodity profits would be down 40% from this year, and a major portion of that is the three Fremont plants, the sale of the Fremont plant but we also expect that those -- the margins on those or the spread on those hogs are going to decrease during the year. So I think it's a combination of both.

And we'll take our next question from Eric Larson with Buckingham Research Group. Please go ahead.

I think I know the answer to this, just want to make sure -- little follow-up on the guidance question but the expenses that you outlined, which will probably come in Q1, if the sales of Fremont happens in December. How much of those expenses are included in your guidance or not excluding, so you are -- that's a GAAP. I'm assuming it's a GAAP number. Is that a fair assumption?

That's a fair assumption, Eric.

And then the second question, which I wanted to follow-up on here is, we saw the impairment charge for CytoSport in the quarter. I think Jim talked a little bit about the issue of sales moving more toward the e-commerce side of the business. But is this a business that you're still putting a fair amount of advertising support behind it? Is that the only fix that you need? Or what else in the powder side and I think it's also still widely competitive. But what else needs to happen for CytoSport to get back on track?

One of the things, Eric, that I called out was as those sales have shifted, we were behind the curve in terms of having the digital infrastructure that we needed. And so that has a big initiative for us and we feel like we're in a position now where we have the appropriate content and sales infrastructure that we need. From an advertising perspective, the team that we have in place has reallocated some of those advertising dollars into slightly different messaging, which we're finding to be highly effective. And so I think those were really two of the bigger things that we had to get done and we're well-positioned for 2019.

And we'll take our next question from Adam Samuelson with Goldman Sachs. Please go ahead.

I guess the first question in Jennie-O. I think you talked about modest profit improvement for fiscal '19. Can talk about the pass through a couple of here? I mean it would look like some of the market indicators are moving in the right direction in terms of breast meat pricing being above $2 in terms of pulp placements being down, competitor potentially shutting down early in the new year. And I guess still only calling for modest profit improvement. Can you help us think about the path to getting back to those mid-teens margins this business did pre-avian flu?

I think you touched on this. It's really the fundamentals are moving in the right direction. I think the biggest issue there is really the disappointment in the pace. And so even though the trend in the last quarter was down for full placements, if you look at October, it was actually up a little bit. So I think we've got to stay on track with those fundamentals and see them accelerate. You're correct in regards to breast meat pricing. We see that as a positive. We see inventory levels coming down certainly as a positive but again, still at historically high level. So we need to see that accelerate. We will continue -- as we said several times, we will continue to outperform the industry and the things that we're doing behind the scenes really help us be in place to accelerate the outperformance, but to get back to truly more normalized levels, we need to see the fundamentals accelerate.

And then my second question is over in refrigerated foods, the organic volumes in the quarter were down 2%, you attributed that to lower hog harvest levels. At what point does the organic volume trajectory in refrigerated disconnect from hog harvest. And just trying to think about layering in Columbus and Fontanini's as a glare into organic through the first -- through or after the first quarter. I mean at some point you should need to be growing this on the volume side the new capacity that you put in. I mean did that happen sooner or just help us think about the past actually started grow the volumes here organically?

I think 2019 is the year that you will see that where it will be the investments that we've made in those businesses that are driving volume, sales and earnings growth. We see that across the board. We've been very intentional in terms of the investment to support value added business and 2019 is a year that you will see that really connect.

And we will take our next question from Benjamin Theurer with Barclays. Please go ahead.

Now a question on the deli business and you've mentioned you're going to move what you basically had within the Jennie-O Turkey up into the refrigerated foods segment. And you have nicely associated the sale volume, as well as the profitability. Now the question is for the whole restructuring and bringing that together. Are there any additional costs we should be aware of that you're going to encourage us by consolidating that business? And if you could share what is the size of the business if it's at some stage you would consider to actually spin it off from the refrigerated food segment and reported on a standalone basis just to get a little more magnitude of this business that would be my first question?

In regards to the deli business, we don't have any other expenses that we're expecting in 2019 and beyond as we've consolidated this business. For us the bigger issues most of the work was done in 2018 really bringing all of these businesses together and integrating them behind the scenes, there was a lot of work that took place. And so as we've set-off into fiscal 2019 really being able to stand-up this organization and have them ready to go is exciting. In regards to the last part of your question, we've said it's about $1 billion business, and haven't really given any thought into splitting it and operating like that, because it is still closely linked and tied to refrigerated food. It makes perfect sense to have it there. And really the focus now is achieving and doing what we said we were going to do and making sure that it's A, our next growth engine and really helping retailers create the deli of the future and to capitalize on that opportunity.

So basically $1 billion that's what the $300 million that comes in from Jennie-O. Correct?

Yes.

And then last on the international part, I mean clearly, their sales was -- strong driven. Could you give a little bit update on how the Brazil acquisition is doing, the Ceratti brand, how you’ve being doing, how the competitive environment has been doing? Because what I've seen is that at least in some of the prepared food side business, we've seen major competitors being relatively aggressive on increasing pricing. So wanted to get your exposure there and how you were able to benefit from that environment? Thanks.

So the Ceratti acquisition has met all of our expectations. And as we said, it's really given us a great entry point into the Brazilian market. In 2018, we did take some pricing down there as I think there’re some macro issues around inflation but we've been able to successfully pass along pricing, a reminder that the brand is a premium value-added brand very well recognized by Brazilian consumers. And so it mirrors a lot of what we have here in the United States in terms of being a premium authentic high quality artisanal brand that resonates with consumers. And so business is meeting all expectations. We're in the midst of continuing to make sure we're innovating, adding capacity to capitalize on the growth opportunities that are down there.

And we'll take our next question from Jeremy Scott with Mizuho. Please go ahead.

So just wanted to clarify on refrigerated foods guidance being up next year so just want clarify, this includes the $15 million to $20 million in closing costs, which I think is what you estimated last quarter. It includes the estimated $10 million decline in commodity profits but it doesn't include the reconciliation of let's say $35 million, $40 million in JOTS business being reclassified into refrigerate food. So is your guidance implying that there's something in the range of $65 million to $75 million in organic operational improvements in fiscal 19?

I think it's fair to say everything that you've talked about is included in the growth that we're looking for in 2019. I think the $12 million is going to be in general corporate, but it's reflected in our overall number. But I think the other the other elements that you’re talking about really are reflected in refrigerated foods, and it will be another strong year for them. Jeremy, I guess if there's any more specific detail that you need certainly Nathan can be available to give you those answers.

But just want to make sure the Jennie-O reclassification is or isn’t included in your guidance, so refrigerate would've being up next year?

So that is now -- the Jennie O business has shifted into our deli organization, which is now included in refrigerated foods. So we are essentially rebasing refrigerated foods to reflect that.

And probably if you could expand on the pre-Fremont post-Fremont dynamic in refrigerate. I think you said commodity products would be done, hog harvest will be down but you’re getting your contract there would be no impact on volumes. So can you clarify what percentage of the tonnage that you will be buying from WholeStone under contract that will effectively be passed through, or in other words the profit that you don’t turn into value-added, the green hands and their equivalents? Could you just quantify that if possible? And then within that, are there products that you're going to be entirely passing through and will there be products that you don’t necessary add value on but you'll earn a spread, because you're locked into contract with a customer and you're getting capability there?

So we will take all of the meat coming off of Fremont line. Some of that meat will go into our value-added products. Some would be sold as fresh pork. We retain all margins on fresh pork sales. So we’re purchasing the meat at the USDA composite carcass value. So the spread between the carcass value and the sale and either the retail or the provisions market belongs to Hormel. So we’re taking down our harvest by 30% and as we see it, this is with the additional capacity coming online, this is exactly why we made the move to sell Fremont and de-risk the refrigerated foods business and that is the structure.

And then just maybe lastly on the 12% dividend hike into your provided guidance, so a solid acceleration in the payout ratio does not entirely off trend given what you've done in the past decade. But just curious what was the rationale for leaning into the payout in 2019? And should we be interpreting that as a recalibration, however, slight -- how you're thinking about M&A opportunities that maybe at your doorstep?

I think the biggest driver, obviously, is the strong cash flows of our business, strong cash flows and clearly our balance sheet remains strong for the organization. This is consistent with what we've done over the last decade, so the strong cash flows but the optimism that we have in our business going forward. So as we head off into 2019 and beyond, clearly the dividend is one of the levers when we think about capital allocation but we are in a very, very strong position to make any acquisition that we think is appropriate and strategic for us.

And we'll take our next question from Heather Jones with Vertical Group. Please go ahead.

A real quick on your comments on freight, so some of your -- some of the other companies in the industry are talking about not lower freight in '19 but honestly, more benign commentary on the outlook than what you articulated. So I was wondering if you could -- are you envisioning inflation similar to what you saw in '18 on the freight side.

I think it's going to be a little lower than we saw in fiscal year 2018. We believe that there is still pressure but there's a bit more balance in the marketplace now that the freight lines have had time to work on, and certainly we've spent time working on it. So I guess I don’t want to overstate it but certainly it's a headwind in 2019. And again, it really goes back to this longer-term solution that our supply chain team is working on and what is the right network optimization for us.

And then on advertising, so you guys had talked about 20% increase for '18, it came in below that and I think you made some comment about shifting it into other types of promotion that you found more effective. Could you help us -- give us the sense of what you're thinking about advertising dollars in '19 as far as year-on-year increase?

So at the end of the first-quarter, what I've said was that we would increase our advertising and promotional spending in the neighborhood of 20%. And as you know, we were always working to find the highest ROI between all methods of brand support. And while advertising was significantly ahead of last year, good strong double-digit increase, it was below that 20% but we did see our trained dollars come in above plan by an equal amount. So we hit the number that we thought we would, and it does ebb and flow in terms of how we spend those dollars across brands and dollars. The real message here is that we're dynamically managing this brand support for the highest ROI, and we do a lot of time -- spend a lot of time around revenue growth management, pricing, trade, advertising all of those things. So we feel good with what we've said and what we ended up spending. And then we're going to have a fine increase in 2019. And in Jim Sheehan's comments, he talked about some of the brands where we'll be spending those dollars. We'll continue to support the SPAM brand who just -- they're coming off their fourth consecutive record year, and it's a brand that we know will respond well to advertising. We've spent a lot of time and effort and dollars under our Umbrella brand, Natural Choice, and of course the reinvestment in Jennie-O Turkey store business. So feel like our investments are giving us the returns that we need whether they're advertising or trade.

And we will take our final question from Robert Moskow with Credit Suisse. Please go ahead.

Just s couple things to clear up. Frank, can you give us a sense of what the dollar inflation was in fiscal '18, just to get a sense of the headwinds just all in all. Second bellies, belly prices I think started pretty low in the quarter and were rising. Were you hedged on belly, did you get a really strong bacon margin in the quarter? And do you expect that to ease off in first quarter, just because of the slope of the curve going higher. Maybe give us a little more clarity on what those bacon margins look like?

The freight was $0.06 to $0.08 in 2018, belly markets as I said, we think that we will see volatility and we have seen volatility this year in bellies. We do not have a hedge on bellies right now. We still believe that they're going to be lower over the year. And I'll let Jim talk a little bit about the margins on the bacon.

Our bacon business was very strong, and it ties into to my previous answer in terms of really where is the biggest ROI in terms of pricing or trade. And so we navigate through that. But I would tell you that we’re very pleased with bacon performance for the year, for the quarter, both top line and bottom line.

Last question, corporate expense it was like $60 million this year. I think it's twice as high as the year before. Should we expect it to be similar in fiscal '19? I didn’t catch that.

Well, we'll have the $12 million from the closing of the Fremont sale in corporate expenses, so it won't be -- that will put pressure on increasing the corporate expenses.

So something in the mid-70s then, Jim.

No, we don’t see them that high.

And there are no further phone questions, at this time. I would now like to turn the call back over to Jim Snee for any additional or closing remarks.

Great, thank you. On behalf of the team here at Hormel Foods, thank you to all of you for joining us today. To our team members listening in, thank you for all your tireless work that allows our company to be so successful in the marketplace. Your focus on delivering our key results and maintaining our culture of accountability will continue to make this company uncommon in the marketplace. Have a safe and happy Thanksgiving.

And this concludes today's call. Thank you for your participation. You may now disconnect.