Good morning and welcome to the Second Quarter 2019 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. [Operator Instructions]. I would now like to turn the conference over to Mr. Dunham Winoto, Director of 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 second quarter ended June 30, 2019. Yesterday afternoon, we issued a press release providing 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 with 8-Ks and are available online at www.sec.gov. Presenting to you today are Jayson Penn, President and Chief Executive Officer; and Fabio Sandri, Chief Financial Officer. Before we begin our prepared remarks, I'd 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 actual results to differ materially from those projected in these forward-looking statements. Further information concerning those factors has been provided in today's press release, our 10-K and our regular filings with the SEC. I'd now like to turn the call over to Jayson Penn.

Thank you, Dunham. Good morning, everyone, and thank you all for joining us today. For the second quarter of 2019, net revenues were $2.84 billion, unchanged from a year ago. Adjusted EBITDA increased to $349 million or a 12% margin, which is a 35% improvement versus $259 million a year ago or 9% margin. Adjusted net income was $171 million compared to $113 million in the same period in 2018, resulting in adjusted earnings of $0.69 per share compared to $0.45 in the year before or a 53% increase. We believe our well-balanced performance is a result of our vision to create opportunities for our team members to thrive and prosper. To support our vision, we are continuing our strategy to provide safe, high quality differentiated products, relentlessly pursue excellence in our operations, unlock value by focusing on key customers whose priorities for growth in innovation match our own and optimize our product and portfolio mix to produce consistent results. I truly believe that our results start with our people. As our team members thrive, so does our business. This year, we are on pace to promote more team members than in any year in our history. Our effort to provide competitive compensation, on-the-job training and development opportunities, a safe working environment that exceeds industry standards and opportunities for advancement in our organization are promoting the strength of our team members while providing more resilient, consistent results for Pilgrim's. We're thankful for our team members for the improvement of our operations as well as results during Q2 and for producing a solid first half 2019. Our performance, along with the markets, has continued to increase across all our global operations. In the U.S., we experienced a much better environment in our fresh business compared to a year ago, most notably…

Thank you, Jayson, and good morning, everyone. For the second quarter of 2019, net revenues were $2.84 billion with adjusted EBITDA of $349 million or up 12.3% margin. Adjusted net income of $171 million resulted in adjusted earnings of $0.69 per share. Operating margins were 9.8% in the U.S., 17.5% in Mexico and 4.5% in Europe, respectively. In the U.S., our EBIT was $187 million nearly double the results a year ago. Small bird and case-ready continue to be consistent markets as chicken has remained compelling to customers despite higher availability of other proteins. Large bird deboning significantly improved relative to Q2 of last year and also contribute to a sequential improvement in U.S. business as demand was much more in line with seasonality, despite higher supply of chicken in the specific segment. Prices were solid the entire quarter and demand was firm. Our U.S. Prepared Foods sales continue to improve. Revenue increased by 12% and volumes have grown 14% to last year. The investments we made in the past few years have begun to produce results, and we expect to continue to grow in this segment. As Jayson mentioned, we are bringing our successful Just BARE brand into the Prepared Foods segment and foodservice channels, supportive of our differentiated portfolio strategy. We have other initiatives in place to accelerate growth in this market, and we are expecting it to contribute a greater portion of our total sales in the next few years, while adding to the stability in consolidated margins. Our EBIT in Mexico substantially increased sequentially to $68 million from $10 million in Q1 and was also above last year, $62 million. Our results -- a return to much more normal growing conditions, along with the reduction in competing proteins, drove demand and prices higher. Our strong team…

[Operator Instructions]. The first question comes from Ben Theurer with Barclays.

First of all, congrats on the strong results. First question I have, and you've talked a little bit about it. Obviously, the volatility, corn, soy, what's going on with wheat in Europe, global supply and the weather issues? With that in mind, have you taken any positions, any derivatives, have you done any purchases, any futures positions to somehow mitigate maybe some of the volatility into the back half? And if so, could you share at what level you've locked in? That would be my first question.

Ben, this is Jayson. So I would say this, nothing is different from what we've said in the previous calls. We monitor the market. We adjust our coverage to match the risks we see in those markets. As you know, the U.S. growing season didn't get off to a great start. We had record rainfalls and our hedge position during that time reflected our concern over that potential. And since the end of the planting season, we've seen a moderation in the U.S. weather, and the U.S. farmer likely planted more corn acres than we actually expected. So we've seen a significant decrease in the demand for U.S. corn from competing grades in countries, with ample supply. So the weather continues to remain the current pattern. We feel more confident about the U.S. corn supplies than we did in the start of the season but we'll continue to monitor the development and adjust that risk strategy if needed.

Okay, perfect. And then following up on -- and you have some nice charts in your presentation, a little bit on the pricing dynamics seen during the quarter and obviously, the implications for that. Could you share a little bit, what do you expect for the back half in the different categories on the cutout value? Obviously, this is a broad range, but just to get a little bit of a sense, would you have been seeing in terms of some of the future activity, particularly on the foodservice but also on the retail side? And for it to get a little bit as a sense, on how demand for year looks into -- into 3Q, which should be a little bit of a slowdown versus 2Q but just to get a little bit of the seasonality? And what do you expect pricing is going to look like into the back half?

Yes, sure. So let me just start with sort of what's the lay of the land. The jumbo cutout in Q2 was supported by wings, tenders and dark meat. That was the overall cutout was by 11% stronger than Q2 of last year. And so we're also seeing really heavy featuring of wings and tenders. We see a commensurate price response to that. The small bird cutouts, and let's say that small bird side of the business, which is actually a significant part of our portfolio, according to the USDA, the industry supply has been reduced for the small bird category and is down over 3% year-to-date, following a 9% decrease in supply in 2018. So our business, however at Pilgrim's, we maintained the industry-leading position in this space. We've not reduced our presence in this category. It's one really that has a lot less market volatility. And on the demand side of that, our key customer relationships in the chicken sandwich business has really continued to allow us to outpace the industry of growth overall in this category. So, when we talk about cutouts, we talk about pricing, we talk about markets, I really want you to get a bigger sense of the picture for us is that, we're not just about the parts and we're not just about jumbo breast meat. I'll hit that piece, but jumbo breast meat's trading currently at a near five year low, and we believe just for a couple of reasons. And the first, and this has been well advertised but the front side of the outdoor grilling season got off to a sluggish start due to the weather and colder-than-normal season [indiscernible]. We believe the featuring is there but the consumer was not activating those features at the market. Second is we…

The next question comes from Ben Bienvenu with Stephens Inc.

I wanted to ask about Mexico. I know typically, 2Q is the seasonal peak but it looks like the pricing momentum has sustained into 3Q. You talked about some of the benefit you got from tighter pork supply, a little bit higher pork prices. I would love to hear your thoughts on 3Q and back after the year, in light of the better supply/demand balance you mentioned, the removal of the pork tariff? And then also, is there any evidence so far that ASF isn't having any impact on Mexico market?

Okay. So I'll start. So I would say that the markets are now reverting back to more normalized conditions. The weather again is turning more favorable. We continue to have positive outlook on Mexico. We're confident in our team to deliver those consistent results. And just to recall, during Q1 in Mexico, we saw unusually better late Q4 '18 and Q1 '19 weather, that drove our improved growing conditions. And we also saw less of these pressures. So the more-than-normal seasonal supply caused some outstripping of the Q1 demand. In Q2, we saw that weather worsened for growing conditions but slowed the growth and decreasing ability, so prices doubled at the start of Q2. We had, as you saw, really fantastic Q2, which helped our bottom line improvements. I would say on the quarters, it's pretty interesting the dynamic there. As the roughly year-long 20% tariff has dropped in May, we've actually seen same, at the same time, an increase of import price by approximately 70% of the bone in hands which is actually the big item, so a net price increase of 50%. It's still early to see the full long-term effect of the tariff removal, but of course, anytime that market becomes more efficient, we're in favor of that, Ben.

And Ben, just as a note, Mexico was different than U.S. During the Q3, normally, there's schools on vacation. So there is a different pattern in terms of family eating. And we see a slower demand for chicken and for all the proteins. So we don't expect as strong as a performance in terms of prices in Q2. But like Jayson mentioned, our team in Mexico is really strong and whether is the market conditions good or bad, we can always beat our competition.

Understood. And then I'd like to follow-up on the feature demand activity that you mentioned. It sounded like you said, you had quite a bit better feature demand, particularly in breast meat, as you said, yet, breast meat prices have been under pressure. It sounds like, that's weather-driven, which makes a lot of sense. Grilling season has been hampered by that, and there is less follow-through from activation of features. Do you think, if we get a resumption or continuation of features into the fall, like it sounds like, we will, you'll get better activation of those features? And then, if you just talk a little bit more about your expectation for the fall on foodservice feature demand? And how that compares to what you've seen year-to-date?

Yes, yes. Ben, thanks. We believe that there are absolutely going to be more featuring of breast meat year-over-year. Again, in second half of Q2, we saw those activations starting to roll through, plus the features starting to come through. We believe that's going to continue into Q3 and potentially Q4. On the foodservice operator side, we also believe that there's going to be more chicken LTOs, there's going to be more sandwich features, and we believe that, that trend is going to continue to grow throughout Q3 and Q4 as well. Just like it did in Q1 and Q2 with that 20% increase.

And Ben, just in terms of competing proteins, we also see significant volatility in the pork prices. But for the year-to-date, pork prices are up 3% in the wholesale. And in addition to that, price of ground beef is up 3% during the year. So with that, the spread between pork and beef at the retail to boneless, especially increased significantly. And that is triggering some more featuring, especially on the regular boneless breast.

[Operator Instructions]. The next question comes from Jeremy Scott with Mizuho.

You talked about some of the chicken capacity coming online and that replacing Saturday work. What are your expectations for total industry production growth into 2020? And what about just the trade pack segment? Obviously, we're hearing very different things with this. We're looking at the chick, the egg size data and the chick placement data and it certainly wouldn't indicate that there's a huge ramp-up in production coming. So maybe just kind of give us your internal expectations? And how you're adjusting to that market?

Yes. Thanks. We agree. We're in line, Jeremy, with the USDA expectations of 1% to 2%. That's holding true on the front end. We know that there's a pullet placements in Q4, will be hitting the market at about a 2.4% range. So we did expect to see a higher second semester, than the first semester of productions. But that's relatively in line with our own expectations, as well as the USDA. We know that there's 1 or 2 tray pack plants coming on towards the end of the year. We recognize that it most likely will be a medium to slow startup. We also know that food at home is growing over foodservice. So we also believe that, that new production will be used through the supply chain based on our demand expectations.

Jeremy, just on adding all the plant increased capacity for next 3 years, if all plants are online and expecting under the expected time and considering the ramp-up, and given that they have people to run the plants, we will be between, what Jayson said, 2% and 3% over the next years. We believe that their increase in supply is very great to the increase in demand, given the growth in exports and the growth in domestic service and the retail. We're also seeing that the significant expansion of both beef and pork since 2018 are slowing down. And we are even seeing a reduction in production beef in 2020. So in total, protein availability, I think, is going to be a great year for chicken. And just going back to the tray pack, I think it's important to mention that we have a differentiated business model, when you compare to the branded competitors and the spot market competitors. We have partnerships with our key customers. And we help them grow their brands, while offering a full range of products from tailor natural, to higher order attributes like the organic production. We don't have these annual contract negotiations, because our prices don't follow the volatility of the commodity markets in that segment. And just as a reference, our volumes in that segment increased 4%, with prices a little higher than same period last year.

Yes, I guess that was my follow-up question, which is this, it seems like in the first half and certainly this quarter, there has been an acceleration in foodservice volume growth versus that at retail. And then within foodservice, it seems like QSR is certainly well below -- well above the full service segment. And so I'm just trying to understand, how your Prepared Foods division or how the volume growth in your Prepared Foods will outperform that of your more commoditized products? Is that your expectation for the back half?

Yes, we've been growing that business. We're investing in that business, Jeremy, and we're absolutely putting our resources there to grow our Prepared Foods business. So our expectation is to continue to outperform the growth in the market, as we have in the first semester of this year, and we'll continue to take that through. I'll hit your -- I'll hit the retail side of this as well. I can't speak for others, but our partnerships, and Fabio briefly hint on this, our partnerships with our key customers in this space have allowed us to grow with them and then to grow with us. And we've actually been short to tight in that case-ready retail segments. So we are supporting our customers, and they're growing with us, and we're growing with them. And I think there is -- might be a little slack in the industry there. But our business is flush, and our relationship with our key customers are flourishing today.

Got it. If I could just squeeze in 1 more on Europe. Wonder if you could unpack the volume moves in the quarter. Everything we're hearing from QSR operators seems to suggest good news on the foodservice side. So wondering, if there's an issue in the retail business or are you choosing your customers more selectively post the passing through of the feed wheat? Or is there something else we should be thinking about on the volume side?

No, I think that's absolutely correct. By mentioning our key customer partnership methodology and strategy in Europe, and we are selecting the key customers that we want to participate. We are providing a much better service than all the other suppliers in Europe through our innovation, through our commercial teams. And we believe that, with the key customer partnership, we can grow with them, while selecting better our partners. We cannot do everything to everyone. We dedicated our resources to our true key customers.

To follow on, which is exactly what we've executed in the U.S. and Mexico and we're in process of doing that in the U.K. and those volumes are a result of that.

The next question comes from Heather Jones with Heather Jones Research LLC.

I'm going to say ahead of time that I have got -- joined the call very late, so I may be asking questions that have already been asked. So I apologize in advance, if I do. As far as Mexico, they recently removed tariffs on U.S. pork and so exports there, over the last few weeks have accelerated, significantly. But from what I understand, some producers in Mexico are exporting more pork than normal, due to what's going on with different trade flows. So I was wondering, if you are seeing a looser protein supply/demand backdrop in Mexico the cause of more U.S. pork coming in? Or is it still pretty tight?

Yes, we actually haven't seen that, Heather. Again, this 20% tariff was just dropped. But in turn, the bone in hand, which is the big item into Mexico, we've seen an increase in price by approximately 70%. That's just recent -- very recent numbers so, really have a net price increase of 50%. We're really not seeing really anything there. I'll tell you just on the back story of Mexico. Brazil has increased their exports into China, which also competes with exports into Mexico. So that -- we should see that starting to diminish in terms of the breast meat that was flowing into Mexico, we should start to see that flow down a little bit to relieve some pressure there, which actually there isn't any pressure, but it'll take some meat, that would have gone into Mexico off that market.

And so the U.S. is exporting -- it's chicken, poultry exports into Mexico right now. Have we seen an increase in breast meat exports out of the U.S., given what you just said about Brazil? Or is it still vast majority dark meat?

It's the vast majority -- it's dark meat, but there's absolutely white meat going into Mexico. The Brazilian situation is very recent. So that'll just stop the increase of orders coming into Mexico, but it won't affect anything current.

To your point, Heather, the exports of Brazil to Mexico are typically breast meat. And as of today, because of everything that Jayson said on the exports are Brazil, breast meat more into China. U.S. breast meat is more competitive than Brazil breast meat into Mexico. Not to mention that our product is fresh and Brazilian product will be frozen.

The U.S. will be fresh and Brazil will be frozen?

Yes.

Yes.

Is that what you just said?

Yes.

Okay. And then, in your press release, you had mentioned, strong -- I can't remember how your phrased it, but basically strong retail demand. And from what I understand, from what I remember is your key customers, your pricing doesn't fluctuate as much as maybe some of your peers do. So when we're thinking about strong retail demand and proven results for Pilgrim's, is that just more that, it's taking product off of those spot markets because good volumes are flowing through retail? Is that -- am I understanding that correctly?

That's right, and I'll speak -- I'm not speaking on behalf of the industry here, but I will tell you from our standpoint, our view. We've been tight to short on case-ready retail supply and demand. So our key customer strategy is absolutely working. Again, it's a partnership with our key customers who are supporting their business to grow their business. And as a company, our business has been short to tight on production capacity.

And you're right, Heather. We -- our prices don't follow the volatility of the commodity markets because of the partnership we have with the key customers. Then our volumes in their case-ready segment are up 4% compared to last year and prices are a little bit higher than last year.

[Operator Instructions]. The next question comes from Bryan Hunt with Wells Fargo.

Recently, if you look at pricing data for boneless leg quarters, they're seating skinless, boneless, breast and there's talk of an evolution to the next breed of bird to be less breast meat-oriented and more leg quarter-oriented. I was wondering, 1, what are you doing to potentially capitalize on this trend? And then 2, given that U.S. exports more dark meat than white meat, do you believe that the export trends could potentially continue to fuel the better pricing on dark meat versus white on a go-forward basis?

Yes. Thanks. So yes, there's an absolute trend, there's more deboning of dark meat and most of that is for domestic use. Regarding the breed, I won't go into the -- too deep into the detail. But in order for it to really work, you have to have a complex that debones close to 100% of that mix, because that dark meat, if it stays on the bone, it's $0.25 versus call it $1 on breast meat or $0.40 on the dollar. So they have to have the right specific mix to make that breed change work. But we actually -- we're doing some research, we have some -- and trials in our 1 of our test farms in Texas. And I will tell you if the cutout works and the economics make sense, then we'll absolutely look at moving some breeds in certain complexes, where we do more dark meat deboning than in some other locations. Regarding...

No, go ahead. I was going to switch gears but keep going.

So regarding the mix, relative to retail dark meat, white meat, we don't know if there's substitution of white meat for dark meat at the retail case. We do know that, and this is really a testament to what we've been doing here in the last 8 years, we've been working with more dark meat into Prepared Foods. We've been working more dark meat with our customers, increasing our customer mix, increasing our product mix, our portfolio. So we've been doing much more retail into -- sorry, dark meat into retail. But if you think about the growth, and we know that, that dark meat or retail is growing by about 10% year-over-year. But if you think about it, the big absolute numbers, the delta between retail dark and retail white is a 6x. So there's 6x more white meat sold at retail than dark meat. So although, there is growth at the retail level of dark meat, it's still at fairly small numbers, but absolutely growing.

Great. And then Fabio, you mentioned that, it feels good about the capital structure, which you had the flexibility to potentially optimize the capital structure. I'm wondering, if I heard that correctly, I mean, where do you feel like optimal cap structure is? And what are the actions you will take to optimize it further from where you are today?

Yes, Bryan, thank you. Our common objective is to create shareholder value, right? And within that, we want to grow the company. And we're looking to opportunities for M&A, and we have two strategic fronts, the chicken track and the prepared food track. We continue to see targets or options on both tracks and we execute the strategy and believe we can create proper value. Just like we demonstrate with the Mexican acquisition, the GNP and the Moy Park. We will continue to invest in our operations, increase the operational efficiencies and further differentiating our portfolio. And we will consider and evaluate all the other revenues and capital strategies like dividends and share buybacks. We already mentioned that our optimal capital structure is between 2x and 3x levered and we are in the 2x. So we have ample capacity in our balance sheet to promote our growth strategy.

Yes. Just to follow on, just from an M&A perspective, we have a proven track record of integrating assets that are accretive to our legacy business. We look really for 3 things: geography or brands that we don't have a business, that we can significantly improve and one that we can acquire and quickly be accretive. So it's really those 3 things hit our targets for growth.

The next question comes from Rebecca Scheuneman with Morningstar.

So Jayson, you're talking a lot about shifting to more prepared food and value-added type products. I was wondering, if you could give me an example of what you're talking about. And I'm wondering, if these products, how they'll be priced, if they'll be still kind of formulaic based on, I believe, most of your products formulaic-based on different feed inputs? Or if it will be priced more like a traditional packaged food with list price?

Yes, it's a more traditional, that's the idea when we speak about brands and more Prepared Foods. It's really going to stay away from the primary aspects of our business and move towards, call it, I hate to use this term as CPG pricing. But it's those brands will absolutely -- will extract value and create value from the sales of these brands. And example is our Just BARE brands and even in foodservice, going to the K-12 markets, we're absolutely excited about that be creating a clean label, a product that consumers several meat consumers need. And again, we are separating the primary aspects of our business from our Prepared Foods business, as we our grow brands there.

And Rebecca, the objective is to create higher, more stable margins, right? So the Prepared Foods acts has as a great hedge to our exposure to the commodity market.

Right, right. Yes, I definitely understand the appeal. So are you saying your Just BARE brand, even though it's technically -- it's not prepared, right? It's just a pure organic or no-antibiotics-ever, has those qualities, but it would still -- it would command list pricing?

Absolutely. We're actually moving that into Prepared Foods retail and foodservice. So yes, pricing commit.

My last question then, still related is, can you just kind of disclose, what percentage of your current product or revenues are at this list, price? And where do you think that could get to over time?

List pricing? I think we mentioned, we have a very broad portfolio of pricing. So it depends on the segment. On the spot market or a big bird, there's a lot of prices that are connected to contracts. On the tray pack, we have the three partnerships, where we have discussion about, how can we help our customers to grow. So the pricing there is more of negotiated. In the small bird segment, there is some components of cost plus and comps and components of grade markets. So -- on the prepared food, just like we mentioned and Jayson mentioned, they are more CPG type or mixed price. So I think, what we try to do in our portfolio, not only in products, but also in prices is to mitigate any risk in any specific segment.

The next question comes from Ken Zaslow with Bank of Montreal.

I know a lot of questions have been asked. I just want to ask 1 kind of bigger-picture question, I guess. In the press release, you talked about European operations, how you expect the momentum to continue into the second half. Can you give us that type of outlook for Mexico as well as the U.S.? I know we did threw a lot of questions around it. I was just curious, if there's some sort of parameters to which you could do the same thing, that you did with the European operation?

Sure, Ken. I think it depends on the business model that we have in each region, right? Mexico is a more volatile market. There's a lot of volatility in the live markets and in the chicken markets in Mexico. In Europe, we have a lot of our products and a lot of our partnerships in a cost plus type. So it's much easier to give some indication on what's coming on the next quarters. Again, Mexico, we have our Q1 that was really below our expectations and we have a really strong Q2. The guidance we gave on Mexico is that we -- regardless of the market conditions, because of the differentiated products and our strong management would be better than the competitors. I think it's -- it depends a lot on the type and structure of the markets that we have. In the U.S., we can give a better view in some segments. But on the big bird deboning, for example, I think the market would dictate a lot of profitability. We've been trying to differentiate our products and Jayson mentioned the even in the big bird segments. But that is still a more volatile segment. And again, that's what we are trying to build our portfolio. In Europe, we are more stable. In Mexico, we are more volatile but we can capture the upside in the market and in the U.S., we have a more well-rounded portfolio.

My last question, Jayson, the key customer relations project that you're doing and doing for 7, 8 years, can you talk about what the runway left is? And can you add -- can you start moving certain customers from like, for a lack of a better word, the bottom rung to the middle rung and the middle rung to the top rung? How does that process work? And where are you in the stage, because again, it seems like this strategy is working phenomenally. So I just kind of wanted to see what the runway is, where it's going in the next 1 to 3 years?

Yes, Ken. Thanks for the question. It's a strategy that continues to evolve. Again, we started this strategy. We implement this, and we are trying to do everything for everybody and really determine that we needed to put our resources into several key customers. We are growing extremely well with those key customers. That's based on the premise of service, quality, trust, scale, scope, growth and profitability for both partners. And there's much more runway left. Again, the key customer starts with trust with us and we must deliver that. And we're continuing to expand on our key customers and it is an evolving process, Ken. But there's lots of runway to go there.

Are you going to be able to progress the -- is there room to progress? And again, I don't know, if you call them Platinum, Gold and Silver or high, low, medium, whatever, but is there a way to progress the customers through the ranks? And -- or have you gotten everybody into that top rank and you have to add new customers like, what is the evolution? And I don't know, just if there's any color to that and then I'll leave it there. I really appreciate it.

Yes. Sure, Ken. Really, we have priority customers, we got customers within each business units that are critically important to our business. And it is our absolute goal to make those priority customers key customers. But again, if there's 5 filters that we run through and our customer runs through as well. They look at us as key suppliers. And if we can work out those big picture details, then we are absolutely moving and continuing to move our priority customers into the key customer status.

This concludes our question-and-answer session. I would like to turn the conference back over to Jayson Penn for closing remarks.

Thank you. We are encouraged by our results in the first half of 2019 and believe the outlook for global chicken consumption will remain positive as consumers around the world continue to view chicken as a compelling healthy alternative. Our diverse portfolio of differentiated products, tailored to support our key customers strategy, in conjunction with our geographic footprint, will continue to generate consistent performance and minimize margin volatility in challenging market conditions relative to peers. We will continue to identify new opportunities, including Europe, for both organic and acquisition growth, refine our portfolio and offer differentiated, customized high-quality products to support our key customers needs through constant innovation. Our team members are our competitive strength. We will continue to invest in our people to drive our results by providing them greater opportunities to contribute to our success. We would like to thank everyone in the Pilgrim's family, including our family farm partners, suppliers and our customers who make our business possible. As always, we appreciate your interest in our company. Thank you for joining us today.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.