Archer-Daniels Midland Company Earnings Call Insights: Ethanol Operations and Sourcing Corn
Archer-Daniels Midland Company (NYSE:ADM) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.
Kenneth Zaslow – Bank of Montreal: I had a couple of questions. My first question is, you pointed out in a couple of the cases, where you’re actually taking actions throughout the organization. Can you talk a little bit more specifically about what you did in Europe, how you’re treating your ethanol operations and what you did on the transportation and origination and how much of that’s going to be able to push in numbers going forward?
Juan R. Luciano – EVP and COO: Sure Ken, this is Juan. In Europe, we made several changes after last year’s disappointing performance. We made changes in our organization, we made changes in some of our processes and the way we handle the year, if you will and the season. So we’re happy to see those results showing up this year. In corn, we’ve been actively managing these. We’ve been unhappy obviously with the results and the margins in corn for the last year, but I will say, we have a rough December. We sat down with the business and we have a deep review of every aspects of our operation. We have restructured a little bit, our leadership team, we have looked at our commercial operations and what we do there. We continue to drive cost improvements. We made the decision – we thought the timing was right for us to reduce capacity. We have a slowdown, in two of our dry mills. So we have a set of actions that makes us believe that we will manage the business even better going forward in this tough environment. In Ag Services, it was slightly different, was a matter of anticipation. We knew we were going to be dealing with a small corp. We didn’t know the magnitude of the Mississippi River issues and that was more like improvisation and saw really good teamwork from the business, but in Ag Services which is – and I think I mentioned before, we’ve been trying to reduce our breakeven point, make sure that we make impacts in our cost position to handle less throughput. I think that that came through the quarter. So, all-in-all very happy the way we’ve been reacting and also anticipating the problem.
Kenneth Zaslow – Bank of Montreal: Then just my follow-up, on the ethanol side, you said that you kind of reduced capacity. Are you looking at slightly better results from last quarter? Are you looking at breakeven margin? Can you just talk about what you’re seeing in the ethanol markets now and how you kind of see that going forward?