Good morning, and welcome to the Second Quarter 2013 Pilgrim's Pride Earnings Conference Call and Webcast. [Operator Instructions] At the company's request, this call is being recorded. Please note that the slides referenced during today's call are available for download from the Investor Relations section of the company's website at www.pilgrims.com. After today's presentation, there will be an opportunity for you to ask questions. I would now like to turn the conference call over to Ms. Rosemary Geelan, Investor Relations for Pilgrim's Pride. Please, go ahead.

Good morning, and thank you for joining us today as we review our operating and financial results for the quarter ended June 30, 2013. Yesterday afternoon, we issued a press release to provide an overview of our financial performance for the quarter, including a reconciliation of any non-GAAP measures we may discuss. A copy of the release is available in the Investor Relations section of our website, along with the slides we will reference during this call. These items have also been filed as 8-Ks and are available online at www.sec.gov. Presenting to you today are Bill Lovette, President and Chief Executive Officer; and Fabio Sandri, our Chief Financial Officer. Before we begin our prepared remarks, I would like to remind everyone of our Safe Harbor disclaimer. Today's call may contain certain forward-looking statements that represent our outlook and current expectations as of the day of this release. Other additional factors not anticipated by management may cause the actual results to differ materially from those projected in these forward-looking statements. Additional information concerning these factors have been provided in today's press release and many of our regular filings with the SEC. I'd like -- now like to turn the call over to Bill Lovette.

Thank you, and good morning. We appreciate your joining us this morning as we share our financial results for the second quarter of 2013. Our net sales were $2.2 billion, a 10.6% increase over the $2 billion we reported in the second quarter of 2012. EBITDA of $264.6 million reflected a 111% increase compared to the $125.1 million generated in 2012. Our EBITDA margin for the quarter was 12.1% compared to 6.3% in the second quarter of 2012. Net income was $190.7 million, a 175% improvement over the same period in 2012. We achieved earnings of $0.74 per share in 2013 compared with $0.27 per share at the second quarter of 2012. It is clear our strategy is working. We've demonstrated that we are a valuable partner to our key customers. And due to our track record of high quality and service, we have acquired additional business with key customers that has created profitable growth by improving our sales mix, most notably in strategic channels within broadline foodservice distributors, QSR and our case-ready Retail business. Over the past 18 months, we have worked with our key customers to fundamentally change our product pricing strategy, putting the company in a position to benefit from profitable supply and demand balance within the chicken industry. We are large enough to have breadth in our product offerings, but we're also very agile in adapting to rapidly changing market conditions to enable us to optimize mix and price impact. Our results also reflect the continuing impact of our relentless pursuit of operational excellence, especially in the areas of yield improvements and plant cost and efficiency gains. We are confident about where we are relative to achieving our improvement goal of $125 million this year. We continue to drive accountability and ownership deeper into the organization.…

Thank you, Bill, and good morning, everyone. Our net sales were $2.2 billion, with EBITDA of $264.6 million, for a margin of 12.1%. Net income was in $190.7 million, a 175% improvement over the same period in 2012. We achieved earnings of $0.74 per share during this quarter. We continued to deliver solid results even facing increasing feed ingredient cost. In Q2, feed ingredients were $75 million higher than in the same quarter 2012. The prospects for the new crop are outstanding, and we will bridge the gap between the old crop and the new crop during Q3. We've made a lot of progress in our performance as a company. And while we've had a good year thus far, we're not going to be satisfied until we are sure we capture every cost opportunity and revenue opportunity possible. We continue to optimize our working capital by reducing our inventories and optimizing our collections. Our CapEx this quarter was $23.2 million and continued to be directed towards projects with fast returns, all related to safety and quality. Mexico had outstanding results for the quarter, despite the challenge posed by the slightly lower volume of production due to the health environment. We continue to support the operations in Mexico with hatching eggs from our operation to help offset the breeder loss. As the Mexican industry resumes its normal production and as the consequence of the record high prices, we believe that the supply and demand balance in the region will return to more moderate levels. During the quarter, the strengthening in dollar when compared to the peso resulted in a $9.7 million exchange rate loss. We continue to invest in our people, quality and safety. We have been successful in our efforts to continue to reduce employee turnover in order to improve…

[Operator Instructions] And our first question comes from Bryan Hunt from Wells Fargo.

This is Kevin McClure standing in for Brian. Maybe you can -- Bill, can you just walk us through, or Fabio, or delineate for us how much of that profit improvement was related to market factors versus some of the plant level efficiencies you've seen.

This is Bill. Thanks for the question. As I've said in the prepared remarks, Kevin, it really relates back to our strategy that we implemented actually about 18 months ago, where we knew that we needed to improve our mix and then our cost of producing that mix in our supply chain. I think our team's done a great job of getting our sales mix in a position to take advantage of strong industry fundamentals. And as I've said, while on the one hand, we have a very broad portfolio of product offerings, we also have the ability to change our mix and put ourselves in a position to take advantage of pricing impacts, and we'll continue to do that. I think it's a credit to the quality of the products that we produce, our service and our team's focus on creating value with our customers that allowed us to do that. The other thing that I'll mention is if you remember, before 2012, before the beginning of 2012, we fundamentally changed our pricing strategy, and we no longer embrace the 12-month fixed price contract as we just took on far too much risk related to our input cost. And we worked with our customers. Our customers did a great job of cooperating with us and understanding how our business model needed to be changed for assured supply to them, and we created a portfolio in terms of pricing that allowed us to capture this value. So I would say it's more a strategy. And also the -- as I've said before on previous calls, the profitability in the chicken industry is correlated much more to the supply and demand for chicken as it is the cost of corn or soy. And I think this past quarter proves that, where we paid probably the most ever for our feed ingredient cost and at the same time, produced a very, very high margin. And again, I would tell you that we positioned our company in such a way that we're going to be able to take advantage of high markets, low markets. We're going to be that agile.

Okay. And following on with the change to your contract structure, given the forecast for declining corn and soy costs later in the year, what's the potential magnitude of pricing declines as you pass through those lower feed costs to your customers?

Well, as I just said, pricing as it relates to chicken has much more to do with the supply and demand of chicken as opposed to the cost of feed ingredients. And if you look at the data as it relates to both the chicks hatched and chicks placed and to a more forward-looking indicator of that being the size of our breeder flock and pullets placed, that takes you far into 2014 before we believe there could be a material increase in chicken production. The industry has been very disciplined in terms of average weight per head, and for sure, we don't have the breeder flock to significantly increase number of heads. So we feel fairly confident that we're going to see a restrained supply going into 2014.

Great. Okay, a couple more for us. So breast meat prices are up 30%. Supply is under control. Do you think the rally is largely over at this point? Or should we interpret your statement to say that there could be a little bit more runway left in breast meat pricing as we go through the rest of the year?

I believe, definitely, there could be more runway, or there is more runway in breast meat pricing. And if you look at seasonal patterns, typically, we do get a decline after the Fourth of July or actually, during June leading up to the Fourth of July. And then we typically see another increase as we get closer to Labor Day. I think this year will be no different. Especially the more heat that we get in the South that potentially could take weight off chickens, I think it's entirely possible and most likely probable that we will see breast meat prices go back up this year.

[Operator Instructions] Our next question comes from Farha Aslam from Stephens.

And then just looking to Mexico, could you just share with us how much you think production has been constrained in Mexico due to the avian influenza issue, how long do you anticipate that recovery to take and kind of the pace of the recovery in Mexico for yourselves and the industry?

Okay. If you go back to late February into March, we believe Mexico, as a country, lost between 10% and 15% of the breeder supply. What happened after that point is there were a lot of hatching eggs that were exported from not only the U.S. but other countries into Mexico to supplant some of that supply. It's hard to determine how much of the total chicken meat supply was constrained, but we do know that prices went up nearly 50%. So I think that's a great indication that supply was constrained. And at the same time, and this has been going on now for a few years and I expect it will continue, demand for chicken in Mexico continues to be very robust and very strong. Now there are seasonal patterns in Mexico just like there is here in the U.S., and typically, during this time of year, we do see prices decline, which we have seen. We believe that when the school-age kids get back into school in Mexico, those seasonal patterns will remain, and we'll see demand go up again and prices go up again in Mexico. So we're encouraged about what's happening in Mexico despite the disease challenges. Our biosecurity measures have absolutely worked, and our business model provides us a real advantage of being a large player in that country.

And how long do you think it'll take to recover -- for the breeder supply to recover in Mexico?

Yes, well, that's a good question. And the timing of that event is interesting, because the primary breeder supply chain has been constrained now for a couple of years coming off the challenges that the industry had in 2006, 2008 and 2011. And the primary breeders just can't replenish that supply chain overnight. In some cases, if you start all the way back to the pedigreed birds, it could take as much as 150 to 175 weeks. So we're working with a constrained breeder flock supply chain, or primary breeder supply chain at the same time as we're trying to rebuild 10% to 15% of the breeder supply in Mexico. So it's hard to tell specifically, but I think it could be well into 2014 before that Mexican breeder supply gets replenished back to where it was before this past March.

Okay. And then just one quick follow-up. In terms of your debt restructuring, what do you anticipate interest expense and the tax rate to be for 2013 -- or interest expense?

We expect the interest expense to be, like I mentioned, around $19 million better than the interest expense this year.

So before, you were thinking of roughly $95 million. So now we can think of it kind of in that $75 million range or so?

It will also depend on if the cash generation continues to be strong during this next semester, which we think, so then our net debt will go down. So in comparable basis, it's $19 million, but if we use less of the line, will be even better.

Okay. And then your tax rate, because you did have taxes in Mexico?

Yes. The tax in Mexico is around 20%. That's what we expect to have. We continue to have the NOLs in the U.S., so we don't see the taxpayer in the next month -- next year.

Our next question comes from Brett Hundley from BB&T. Brett M. Hundley - BB&T Capital Markets, Research Division: I -- my first question was given what new crop prices are doing, what is your view or your opinion on the industry taking a longer hedge position as it relates to feed?

Well, you have to remember, Brett, we're still in an inverse market. And I think one should be very cautious about taking a large and long position in an inverse market. And with that said, we're going to recognize that and take opportunities to cover when we can, but we're staying fairly short now as we enter the end of the harvest, and I think we'll be able to take advantage of falling prices as we get further into harvest. Brett M. Hundley - BB&T Capital Markets, Research Division: Okay. And then secondly, just on domestic chicken demand. As you mentioned, given some of the changes across the competitive landscape in proteins, given some of the changes within your customer base, the expectation is that chicken demand remains incrementally higher than it had in recent years. And I was wondering if you can maybe lead us through a scenario or work that you may have done on how much of an increase in supply could be taken up by this increased demand level or rather, the scenario where demand stays consistently strong into 2014. If you can just kind of speak to that, that would be very helpful.

Sure. I think demand will stay very strong into 2014. As I mentioned, with beef and pork supplies being constrained at the same time and beef and pork prices being historically high, that again gives chicken an advantage in terms of price value. At the same time, we continue to see strong demand coming from export markets as developing economies add consumers into the middle class, Mexico is a great example of that, where chicken demand continues to grow. And if you look at chicken production around the globe, it's going to be, long term, North and South America that supply that protein for the rest of the globe, and the growth is going to be outside of, particularly, North America. So I think it's both strong U.S. demand, and I think that's going to continue into next year on the heels of constrained supply, as well as export demand. We saw a record, last year at 7.3 billion pounds exported. I believe we'll see another record at something 7.5 billion to more than that this year in export sales pounds, and I think all of that adds up to a strong pricing environment going through 2014.

Our next question comes from Ken Zaslow from BMO Capital Markets.

Just 2 questions, one is, just a point of clarification. Is the back half of the year going to be as good as the current quarter? I didn't understand what you said on that. And the second question, which is probably more important, is how much capital spending do you plan on focusing on the business over the next year or 2 and like what type of returns do you expect over the $125 million of cost savings? Because it seems like that would be -- there's a lot of room for improvement on the operational level, if you're still -- a ways to go, and your margins seem to be high and could be even going higher. So just trying to figure out, above the $125 million, how much room there is to go.

Okay, so I'll handle the first question. I'll let Fabio talk about CapEx. We believe that the back half, the second half of 2013, has a possibility to be even stronger from a profitability standpoint as the first half. And again, I'll go back to the constrained supply situation, the discipline that the industry has used, particularly in breeders. So we don't have the eggs to grow, and by extending the age of the breeder flock, the breeder flock itself is less productive. So that's why you've seen the cumulative level of chicks placed be as low as we've seen it since going back before 2007. So I think we've got a good story as it relates to supply. On the heels of that, we're going into a great quality corn and soybean crop. The crop looks great. The weather forecasts are supportive to trend line yields perhaps, and I think that would infer that we're going to see a fairly significant decline in feed ingredient costs the more we go into this year. And I think we'll begin to realize fully that advantage in our cost of goods sold in the fourth quarter. So you get a disciplined and strong pricing environment combined with a declining feed cost environment. And again, I think that has -- it gives us an opportunity to even expand margins for the back half of the year. Fabio?

In terms of CapEx, in 2012, we spent around $90 million in CapEx. This year, we expect to spend around $110 million. Going into the future, we expect to spend around $110 million to $130 million a year, which is right in line with our depreciation, so we are maintaining the value of our assets. We will continue to invest in projects with fast returns, or related to quality and safety. And the type of returns we expect is -- a return of less than a year is what we target for our investments.

Our next question comes from Sarkis Sherbetchyan from B. Riley & Co.

Two questions here. Can you remind us how many idled facilities you currently have? And can you share the company's plans for those remaining facilities?

Well, we have 4 idled facilities. We continue to hold them for strategic purposes. We don't intend to sell those facilities to any competitor or to any poultry company. We are holding them for a strategic purpose. We don't have any intention to put them online in the next year.

Okay. And my follow up is the NOLs you mentioned, you have a balance that can satisfy for the next year. Is that correct?

Yes.

Can you remind us what the balance is, like an absolute dollar value?

We started the year with $600 million in NOLs. So we'll consume some of the NOLs. So these NOLs are only in the U.S. We consumed all the NOLs we had in Mexico. That's why we're a taxpayer in Mexico. But we started the year with $600 million in NOLs.

Our next question comes from Carla Casella from JP Morgan. Carla Casella - JP Morgan Chase & Co, Research Division: Given the improved liquidity from your extending maturities, lowering interest rate, what is your view on the bonds that are outstanding? And would you consider calling those before the December 2014 call date? Are you interested in taking those out?

No, we can't call them before '14, but we set up the facility that we have today with the term loan that we are looking to that opportunity after December '14.

Christine McCracken with Cleveland Research.

On the food service contracts that are coming up for renewal, can you talk about what the -- the tone given that you've now gone through this period with kind of record high chicken prices, and foodservice is still a little flat? I'm just curious how they're approaching those. You talked about the shorter contract but generally, what kind of pricing you might be able to get this during this upcoming season.

Well, it depends on the segment within foodservice and even, in some cases, within that segment. Some of the operators have stronger demand than others. Quite frankly, Christine, we're seeing stronger demand building in foodservice. We've shifted our portfolio more to broadline foodservice distributor business and not as much in the chain account business, and we'll continue to do that. But I believe that we'll continue to see a stronger pricing environment coming in, in foodservice. And our strategy is going to remain the same, that we're going to share the pricing risk in that business, and I look for our demand to grow in the markets that we participate in foodservice.

So in terms of growth for the next year in foodservice, it had been a little cautious maybe the last couple of years. As you mentioned, there's some big supply constraints, I think, on beef and pork. And I'm curious, are you expecting, I don't know, 4% or 5% growth in foodservice this year? Or is it hard to pin it down to a number?

Yes, it's hard to pin it down to a number. Some operators are seeing same-store sales upwards of 10% that we've seen. But overall, I think foodservice will grow moderately, but I do think there will be growth in foodservice in the next 12 to 18 months.

Our next question comes from Hale Holden from Barclays.

Two quick ones. Fabio, can you just tell us, after the refinancing, how much will remain outstanding on the 9% B2 2014 term loan?

The B2 -- go ahead, sorry.

I was just going to say does that come totally out? Or does that stay outstanding until maturity?

No, our strategy to not to pay the make whole [ph] we'll maintain the B2 till its maturity, but we're going to have the cash flow sweep next year. At the end of the first quarter, we will probably take the B2 completely out. So it will stay outstanding as of today, but we will probably pay it down without any penalty with the cash flow sweep at the end of the next -- of the first quarter of 2014.

On the -- the second question is I was curious or intrigued by the new export brand that you talked about in the script. Maybe you could kind of elaborate on where you want that to take you longer term and what kind of the opportunities are for that.

Well, just like in our U.S. business, we compete and participate in many different segments in our export markets. And we position Pilgrim's brand as our premium product. But we also compete in other segments that require a value brand or a lower cost price point brand, and we developed the Savoro brand to compete in that value category. We did an extensive amount of research and testing with this brand and its concept with consumers. And we believe we've got a winner and have a strong strategy, and we're about to roll this out in the next 30 days.

Our next question comes from Ian Kessler [ph] from Sigma Capital [ph].

So the first -- one's a question, one's sort of a statement. And the first thing is I see some of these notes this morning, and I know I've talked to you about it for a long time. And a lot of people are saying, "Oh, normalized, it's really 5%, et cetera, going back through history." And it just -- to me, it doesn't do justice to you guys or to anybody else to think that it's the same company it was. And especially with all the work you've been doing, all the work Jason's [ph] been doing and all the work Fabio's been doing. And I think maybe for these guys, you need to spell it out a little bit clearer, unfortunately, that looking at it, that history is not an indicator of what the company is today. And what you're doing on the export side, how you have the market growing in Mexico and the situation you have there, the improvements you've made to your facilities in North America and how your run rate normalized margins, so to speak, is not what it was previously and how the management team is completely different.

Well, thanks for the commentary, Ian, and I agree with you that this is a different company. It's a new company in many ways, with a new management team. And I'll remind everyone that we implemented a new strategy focusing on creating more value with our key customers, relentless pursuit of operational excellence in growing our value-added exports. And again, I give the credit for the margin improvement, not only in 2012 but into this year, and I think in future years, that's going to be the reason that our margin structure fundamentally has changed and has improved. And I think what you said is true. We have great assets, quality assets. We'll continue to invest in those assets in areas where we can get a strong return. And we'll continue to also take advantage of growing our business outside the U.S., where we believe, in the next 10 years, 80-plus percent of the chicken consumption growth will occur. I also would tell you that we're extremely proud of the entire team at Pilgrim's. Our team members that work in our plant operations, our growers, our management team members, our salespeople. It's a people business. Every company has virtually the same equipment. Every company has the bricks and mortar just like we have, but the difference is truly in our people, our approach, our hungry nature and our discipline. So we're definitely focused on our team and our people and growing our company with our team.

Got you. All right, great. Now just a couple of questions on business. First things first is how are you handling the situation regarding bases here, with as much color as you can give? From my understanding is we should see or have seen a significant drop-off. Are you hedged on bases right now? Are you looking to take advantage of this, especially as the new crop comes in, how are you guys just thinking on that a little bit? Also just talking about bird weights, with the heat, just looking at my temperatures in the Carolinas and throughout and whatnot, and it's looking pretty warm, what you're seeing in terms of yields there. And then the last two questions would be on Mexico. I think there's a lot of confusion by a lot of parties as to what the issue really is. But there's something I think I know, which is that they don't have eggs, and I don't know where they're going to get eggs. My understanding is Cobb's all out of eggs. So could this situation potentially last a lot longer than most people think simply just because of that situation? And then the last question I have is -- sorry for so many, but I was told I can only ask one -- is wings. And regarding wings, what do you kind of see shaping up here? There's a lot of people think who think that wing prices can't kind of go up again. Again, a lot of people mistakenly think that the S&D is correlated to corn, where we both know it's not true. But there's some rumblings of a large QSR potentially doing a wing promotion, and I'm just wondering what your outlook -- as far as I know, there's still only 2 wings per bird -- would be on wings going into the peak season here.

Okay, I'll use the LIFO method to answer your portfolio of questions there. So wings, we did see wings stabilize at the $1.30 range or so, and we've seen wings move up to something over the mid $1.50s now. We're seeing a strong wing demand building for the upcoming football season and on into basketball. So I don't really know if wings will surpass the $2 mark like they did this past year. I think there's a chance that they will given the supply discipline in terms of number of head, but I think we'll have another strong wing season. The one difference this year versus last year is we have a little more inventory than we had last year in wings -- not we but the industry and customers. But I think some promotions that you mentioned should take that inventory out. And again, I think we'll see a relatively strong wing season. On the egg supply in Mexico, as I addressed previously, it's going to take -- from the time that this event occurred beginning in late February, early March, I think it's going to take at least a year for Mexico to repopulate the breeder supply down there. And I don't see anything that -- in the nearby horizon that's going to change that. I think you asked about our mix and the weight of our birds. Like I said, we're agile. We've converted some of our plants to smaller birds in the last 12 months. But at the same time, we've converted other plants to large birds for deboning, and we continue to grow in that segment. We believe we're the largest big bird debone operation today. We're continuing to convert some of our facilities into that segment, especially more toward the western U.S., as we see that as an opportunity. We've converted 2 plants in Texas just in the last 12 months to large bird deboning, and we're seeing great results in East Texas, where we've done that. On bases, we have a great team of managers that do a great job of purchasing our feed ingredients and managing our risk. I'll remind you that early this year, we hired Aaron Wiegand. He was running the corn product line in Geneva, Switzerland for Bunge. And we've been just very impressed with Aaron and his expertise, particularly around his knowledge of U.S. origins and bases management there but also, his global experience in understanding origins across the globe as well. So we're very confident that we'll have an advantage in procurement of ingredients and managing our risk there.

Our next question comes from Akshay Jagdale from KeyBanc.

A tough person to follow, I think. And I don't have any thunder, usually, but if I had any, Ian's stolen it at all, so I'll try my best to ask an educated question after that. So just to follow up on Ian's question, basically, can you give us a new normal range for this company? I know you've stayed away from that given all the changes you've been making, but certainly, yes, we do need to be pointed into the right direction more so than some others. So can you give us a sense of what you think is an achievable margin for the company through a cycle. So clearly, the 9.1% margin you had in the U.S. business outstanding, so great quarter, but it's at a time when margins for the industry are peaking, so spot margins at twice that. So I'm just trying to get a sense of, okay, you've made all these changes. You're a better company, clearly. Are you comfortable enough to now give us a range like some of your peers have?

A couple of things that I would comment on. I'm not sure that I would necessarily agree with the profitability peaking part of your comment. As I've said, I think there's a possibility that the second half of '13 can be more profitable even than the first half. I would tell you, Akshay, that what we consider normal at Pilgrim's going forward is we're much better than the average operator. And we're approaching being an operator that is going to consistently be in the top third to top quartile of our industry, and we're not going to relent in getting there. I've said before and I'll continue to maintain this is going to be more of a spread business, a spread between chicken prices and feed ingredient prices, and that's how we're going to continue to manage this company. We think we have a competitive advantage in the breadth of our product line but at the same time, in how our management team manages our mix and keeps our portfolio fresh in terms of staying current to the market and managing in that way. So again, I don't know exactly where feed ingredient prices are going, although I think they're going to be lower. I don't know exactly what chicken prices are going to be doing, but I think they're going to continue to be strong. And I can tell you that we're going to be a better company next year than we are today.

That's helpful. And just -- I understand your argument on things haven't peaked. I meant to say they've peaked so far, right? They could get better. So to that end, can you help us understand, if you were to buy corn and soy today at where the future's price is, let's say for December, how much lower would your feed cost be on a per-pound basis than what you reported this quarter?

Well, it all depends on when we would need that feed delivered. As I said earlier, there's a significant premium in terms of bases in the market today as we transition from the old crop to the new crop. Now as I'll remind you, we're continuing to bring in South American corn, especially in the southeast, to bridge or mitigate some of that high bases cost. But until farmers see that new crop coming at them and needing that storage space, we're going to have those premiums still in the market. So that's a really hard question to answer, but I would tell you that there's probably something between $0.02 per live pound and $0.06 per live pound possible as we go forward.

That's helpful. And then looking into '14, I think you guys did a really good job in your presentation laying out sort of the supply constraints. So I just wanted to ask you about that, again, clarification more so than anything else. So the breeder flock, I think you mentioned it's like 51.6 million or 51.7 million now. If I'm doing the math correctly based on sort of the rate of lay, et cetera, that would imply that next year, on average, we could have about 206 million egg sets. Is that roughly correct? I mean, that would be an increase of 3% year-over-year, roughly. And if hatchability rates are down again, production, actually, in pounds would probably be a little -- up a little less than 3%. Is that the net-net of that analysis as we're looking at a year -- next year for production could be up roughly 2% to 3% from everything you've sort of analyzed and laid out for us?

Well, I'm not sure I can get there in terms of the total amount of growth because of a couple of things. One, the increase in the absolute number of breeders that we've seen this year is all about the age of the flock and not because we placed more pullets, and I really don't see that changing based on the dialogue that I've had with the primary breeders until sometime late in 2014. So that really says that we're not going to be able to increase significantly or materially the number of breeders that are in production. And as long as we continue holding the flock to the age that we've been holding, I don't see a significant improvement in the rate of hatchability either. I think that the one thing that could change as Mexico rebuilds their breeder flock, we may not see as many hatching eggs going from the U.S. to Mexico. That is the one thing that potentially could change. So I'm not sure I can get to as many hatching eggs as perhaps you're talking about.

And so -- okay. So -- but even if production is up, let's say -- I get what you're saying, and I agree with some of the things you said. First question, how many eggs in total do you think we are going to end up shipping to Mexico? And how many did we ship last year, hatching eggs? Do we know that number?

I don't have that number on top of my head.

Yes. I'll follow up. But the more important question is if production increases let's say by 2% next year, what's the worst sort of pricing scenario you can envision, just order of magnitude? Are we talking maybe a 5% decrease in prices? Or even that seems too much for you?

Well, it's hard to quantify, but I would tell you that I believe, through 2014, from a historical point of view, we'll see chicken pricing remain extremely strong. And again, I think you'd have to look at the competing meats available to retailers and foodservice operators. I think that gives us -- that gives us some confidence. And as our economy improves into next year, which I believe it will, I think we'll see more consumption demand.

And our next question comes from Kevin McClure from Wells Fargo. And we have Bryan Hunt from Wells Fargo.

I'm just trying to get a sense of what you're going to do with all the cash you're going to generate in the back half of the year. Fabio, can you confirm for me what your RP basket is? I'm calculating something like negative $20 million to $30 million.

As far as what we're going to do with the cash, I think we're looking through the strategic options that we have. So we still have the senior notes that we need to take it out to, so we'll look into what we're going to do during 2014.

Okay. So as I understand, you have a $400 million new term loan. You're keeping the term loan B2 outstanding, at least until March of next year. You're going to generate about $400 million, or you could generate $400 million of EBITDA in the back half of the year and pay out $60 million in CapEx. It doesn't sound like you're looking to solicit consents to take out your bonds early. So is the cash going to accumulate on the balance sheet? Is that what we should expect?

As far as now, yes. We have a restricted payment that we can do based on the covenant that we have on the senior notes. So we're looking to our strategic options as of this moment.

Okay. What -- do you see anything in the acquisition environment that looks appealing to you right now?

As Bill mentioned, we want to grow our business, and we are looking to opportunities, both domestic and international.

And everyone, at this time, I am showing no additional questions. I would like to turn the conference call back over for closing remarks.

Well, thank you. We're very pleased with and appreciate the agility shown by our team members and their dedication in ensuring that we adapt quickly to take full advantage of changing market conditions. Our strategy is working, and we feel confident that it will continue to provide the benefits going forward. Thank you all for joining us this morning.

Ladies and gentlemen, that concludes today's conference call. We do thank you for attending. You may now disconnect your telephone lines.