Andersons Inc Q4 2007 Earnings Conference Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Heather Jones - BB&T Capital Market - Analyst : I have a few questions. One going back to Plant Nutrient, I thought your comments implied some forward buying by farmers. And I was wearing if that was significantly greater than what you have seen in previous years?

Question: Heather Jones - BB&T Capital Market - Analyst : Okay. As far as your comments about your view on corn planting, I believe on Q3 call, I want to say -- I can't remember exactly, but I want to say you said in the 5 million to 6 million decline. Given what corn prices have done over the last couple of months have you modified that view?

Question: Heather Jones - BB&T Capital Market - Analyst : Okay, because (inaudible) country?

Question: Heather Jones - BB&T Capital Market - Analyst : Okay. Speaking of wheat, was there any wheat that you own outright, i.e., fixed-price where you could sell at current prices and reap a windfall? Do you own any grain outright like that or is it all on hedged or live contracts?

Question: Heather Jones - BB&T Capital Market - Analyst : Okay. And did you increase your position in Lansing this year?

Question: Heather Jones - BB&T Capital Market - Analyst : And I cannot remember how much your able to add a year, but are you going to go over majority ownership this year?

Question: Heather Jones - BB&T Capital Market - Analyst : Probably not? Okay, well my final question is, on DDGs do you hedge any of those?

Question: Heather Jones - BB&T Capital Market - Analyst : So the point being that DDGs have gone to call it 170 to 188 a ton. We should assume you're going to see the 170, 180 a ton, and you did not lock in at some lower priced?

Question: Farha Aslam - Stephens - Analyst : Congratulations on a great year. Starting with your Plant Nutrient, volume this year were up 40%. Mike, could you give us some color as to what you think volumes will do in 2008?

Question: Farha Aslam - Stephens - Analyst : So do you think the advantage would be as much as you saw in (multiple speakers)

Question: Farha Aslam - Stephens - Analyst : And then moving on to your grain business, you have changed the way you purchased grain for your elevators, given the current commodity cycle. Could you share with us how that might impact sales or profitability of that business?

Question: Farha Aslam - Stephens - Analyst : And, Mike, you often give us color on the basis. It currently it looks like corn is average but soy and wheat might be low basis compared to historicals. Can you give us income opportunities in the various crops right now?

Question: Farha Aslam - Stephens - Analyst : Okay my final question and I will pass it on. Can you give us some color on your Greenville plant in terms of your hedging opportunities there, and how much you are able to sell forward?

Question: Brian Milburg - Piper Jaffray - Analyst : Great quarter and year guys. I got to move myself up higher in the call. All the good questions have been asked. I guess one thing I would like to talk about is you mentioned this market share issue with the fertilizer. Can you tell me a little bit about that? How you achieved that? Is that just in the Southeastern portion there or the Ohio, Tennessee area or --? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies.

Question: Brian Milburg - Piper Jaffray - Analyst : Okay, and then one last question. Because of the severe weather in the Tennessee, Kentucky, Southern Ohio area is that were you see most of the corn shifting or -- what is your thought about that?

Question: Brian Milburg - Piper Jaffray - Analyst : Yes over to soybeans or to even cotton maybe.

Question: Charlie Rentschler - Wall Street Access - Analyst : Mike and Gary, with the planting attention for corn down, but demand expected to rise, especially given 50 or 60 new ethanol plants coming online this year in the United States that might require another 2.2 billion bushels I'm going to guess, and as you say some carryover at the end of the last fall, what is your expectation for corn prices this year? And how does higher corn prices flow through and affect the Andersons in different ways?

Question: Charlie Rentschler - Wall Street Access - Analyst : But what about the impact on your ethanol business? I mean I don't see any alternative but corn prices to just keep going higher and higher. I mean maybe they will go to $6.00 or $6.50, or heaven knows where they can go. But what if along with that you have gasoline prices drifting down because of recession covering more and more of the country, and where does this leave the ethanol guys, including yourself?

Question: Charlie Rentschler - Wall Street Access - Analyst : Yes, but I think with -- where did we go, 13.2 billion bushels of corn last year, and the carryover was 1 billion something or 1.5 billion. But you have got these ethanol refineries coming online this year that will produce I think 4.8 billion gallons of ethanol. That takes about 2.2 billion bushels of corn. So against last year's production you're talking 15, 16% increase just to feed the incremental ethanol plants coming onstream. And certainly yields are not going to jump of like that year-over-year. There is no way possible. But anyway, well I guess --.

Question: Brian Milburg - Piper Jaffray - Analyst : I just wanted to cover the retail briefly. First of all, I think that your store year-over-year was actually pretty good considering the retail sector right now. So even though it was slightly negative, I think that is a pretty good accomplishment guys. But I was curious how the food business is doing at your food market?

Question: Brian Milburg - Piper Jaffray - Analyst : And then can you give us a little more color on this impairment, how much of that was related to the food market and the stores?

Question: Farha Aslam - Stephens - Analyst : Could you share with us some color on rail in terms of where rail lease rates are going today, and kind of your outlook for capacity utilization going into next year?

Question: Farha Aslam - Stephens - Analyst : Great. And you did not sell any rail cars during the quarter, just to confirm?

Question: Farha Aslam - Stephens - Analyst : And so going into next year would you anticipate being able to deliver at least flat earnings, given that you will have higher number of railcars?