ANDE - Earnings call transcript Q1 2022

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Operator

Good morning, ladies and gentlemen, and welcome to The Andersons 2022 First Quarter Earnings Conference Call. My name is Matthew and I will be your coordinator for today. At this time, all participants are in a listen-only mode. Later we will facilitate a question-and-answer session. [Operator Instructions].

conference recorded this replay reminder, a is for being purposes. As to hand today, the now your presentation I'd over host Mr. Mike Hoelter, Investor and Vice President, Corporate Controller Relations. proceed. Please

Mike Hoelter

joining first Good thank [Technical Matthew. everyone us for for Thanks, Difficulty]. The XXXX quarter morning, Andersons earnings call. you and

are the our These related the disclosure well If forward-looking andersonsinc.com supporting constitutes [Technical recording various commentary to disclaimers and viewing slides as the respect and is the in uncertainties. webcast forward-looking shortly. presentation X as and that sync. of Slide your risks on Difficulty] the conditions. in the events, statement statements be This Certain the this company's today attention statements Please being press discussed are future and via release you views with performance to presentation, to webcast, will recorded subject to direct information current and reflect statements. financial slides the forward-looking industry

Operator

we speaker conference. Pardon having you. me, ladies our are your It troubleshoot. ladies Please as Pardon Hoelter, to lines. appears issues me, Thank have Mr. proceed and please connection we and speaker we reconnected gentlemen; gentlemen. with standby it appears that that lines. our

Mike Hoelter

Thanks, for difficulty the Matt. I technical apologize experienced.

over start call. for first quarter just to the for XXXX going The are beginning. Thank you earnings from us We joining Andersons

provided have discussion. a We slide presentation today's that enhance will

in webcast, as being related be discussed that and forward-looking SEC. constitutes Actual of Slide the to the and commentary to at respect financial statements. the forward-looking to Certain company's press results performance slides will andersonsinc.com statements sync. the events, is subject industry release risks on file conditions. many page are on contain materially factors, comparable your via disclosure the result this to will company's the Reconciliations included shortly. attention supporting webcast non-GAAP as in these with the direct recorded presentation, review financial forward-looking and our to to If various the directly a Appendix within most well measure as investors' our disclaimers you could on current are statements This prepared measures. X reports uncertainties. remarks the today's the of are reflect presentation. recording of with These presentation you today information presentation non-GAAP the described statement website the views We GAAP available differ viewing are future in This and and measures encourage made this financial factors. and which of slides of be the Please

and our questions. are call the with remarks, Brian Chief me On to I'll the happy President Bowe, over turn Pat now take to and your Valentine, be Pat. call prepared Officer. Chief and Financial After today President Vice we'll Executive Executive Officer;

Pat Bowe

resulting prices team maintaining significantly prices, on I'm unfortunate conflict. call everyone. good while were supplies also Ukraine. these and morning the very and our for and from to family and Thank for which in impacted Ukraine. the impacted Global by We thoughts serving you, by morning, the saw remain images our conflict basis Thank values of run-up logistical lower. customers. who and price challenges, of tight an Ukraine, unprecedented Global joining war in first grain saddened managing drove by quarter the our remain extreme markets volatility review those first in through with Mike, proud focus the this the news our this to futures people our zone. have quarter with you And war in results. prayers further fertilizer Ag due coming up We're

in to soybean size. basis year, decline declined corn Group large the results and from Trade part due Our in last

values. positions and know that environment ownership XXXX expect of good in believe of on basis Growth will lower contributed While and to Ukraine we improve we to want year, has historically to This our reduced grain enter values. are in impact provide logistics. for moving solid this into position be allowed values well ownership results assets in international supply and Midwest and wheat market, supply to Last our accumulated this basis it new income our storage these our to these into chain positions the pricing mark us needed our we business the the inventories year as of teams forward. to war will remainder spite

and the year Our first prices quarter oil kept well in the board feed higher performed from improved were and high. Renewable ethanol commodity segment of corn quarter, margins last crush values

low of the as feedstocks, grow. that other XXXX business first CI quarter up merchandising co-products from to of and was renewable continues Third-party significantly

include Plant mark-to-market demand. meet of $X.X in the also now increase a most record all maintenance is to seasonal to our we're quarter. which first quarter. reverse million shutdowns expected driving the results hedge Nutrient Our in completed spring and in five ethanol an loss, facilities well-positioned We've reported our second of

Our reflect in market. rail to well-positioned much lower business. wanted a update brief of provide margins than most limited the and more Improved I priced repair volumes supply divestiture this also on strong offset results across our inventory high product lines.

August. I'll back data. expecting the strategic transaction Brian You things some our to leasing rail financial previously With will XXXX. it outlook Cathcart. cover in for business key last business turn close of Rail back may this to the finished, balance announced segment over I'm he's summer, to sale going discuss our the this When the be now sale Brian? to closing have of on from seen to announcement with our this larger exit finalize night to

Brian Valentine

quarter Slide first the of attributable of to now first This the $X.XX $X.X In share. XXXX, to from Thanks, share number $X.XX X. quarter and first income per continuing per or XXXX. Andersons turning of our $XX We're the quarter million everyone. diluted diluted operations million reported morning, compares The results company net good Pat or on to in

these million decline Group's year-over-year strong Trade As results by of Nutrient results. Pat mentioned, Renewables a the for the was $XX.X in of measures quarter taxes impact EBITDA and XXXX to of adjusted exclude and quarter quarter rate first of at treatment $XX.X had Plant mark-to-market of the offset an XXXX. first operations. We the of effective the in tax compared reflects for non-deductible interests. non-controlling the which recorded EBITDA losses first of XX.X% million, discontinued quarter Both

we and While rate quarter, XX% higher this this rate is between full-year effective a still tax are XX%. forecasting

related cash, of We timing in and and from of XXXX. working capital balance $X.X in to we working committed primary In tax the to Next refunds XXXX, liquidity of cash the extended short-term to billion. short-term in billion X borrowing deposits short-term to levels. to $XX cause the we'll increasing commodity inflation inventories of $XX order of before difference of million relates and of Futures flow The our March markets quarterly price discuss compared margin changes through debt. operations million XX credits. at generated move cash and $X.X marketable borrowing Slide debt with the agreements amended grain readily our The significant in majority capital is $XXX by $X.X billion prices, is and capacity manage supported rising million. these of

banks our and strong support have our from continue proactively We liquidity. monitor to

expect to the year, spending, which to a will disciplined million $XXX to half approach capital. expect also continue about of to take we which be we for maintenance capital roughly be million We related $XXX to

have our noted, previously last reduced X.Xx. we've and the remain EBITDA over than well debt million XX As less below long-term debt long-term over by of to we months $XXX stated target

in our to balance invest stronger well-positioned we core are sheet, the With businesses. agricultural

from on Now conflict South X. we'll XXXX. in $XX.X American dramatic each Ukraine commodity prices income run-up Slide on values, caused primarily Trade drop resulting of in of Trade of of in with pre-tax reported period pre-tax crop and smaller move $X.X compared a adjusted the significant million and income same corn businesses basis a of in to The the beginning soybeans. to in the review million our

basis the impacted basis While us quarter existing lower buy experienced new large domestic levels, positions to reductions, allowed basis at bushels results. which first values favorable

business. business of in to We a well. $X propane million continues perform merchandising That also decline experienced our approximately

However, Trades the of first of EBITDA adjusted cold of that million Texas impacted very the for allowed Midwest million $XX.X for XXXX, quarter extreme year. to was $XX.X the quarter of much strong first XXXX. quarter and the in in compared in last EBITDA February the returns of

pre-tax to company Moving attributable up Renewables the the quarter first to income quarter $X.X million was to $X.X of XXXX. first Slide X, of million, compared

While crush higher driving period. the first demand, winter the quarter experiences margins prior than board lower were

corn including high values, co-product feed, to distillers in contributed strong protein profit. see increased DDGs to gross that oil continue also We

feed, all the XX% recorded Ethanol quarter quarter. renewable more quarter in XXXX, the Group's which the from Third-party of merchandising $X.X losses of is double $XX.X increase an of results than second also mark-to-market in included to expected were XXXX million reverse The nearly of results quarter, last the and feedstock of of million ethanol, results. in year. first the first diesel EBITDA

to $XX.X Plant well-positioned ton business also liquid prices for million X, in the lines, our year, Ukraine. first from conflict the particular last Continuing Fertilizer first record rise from and in margin products. improved our recorded specialty the in inventory story pre-tax per in of continued have Slide of led $X.X to to in quarter income million Turning Nutrient the to due product quarter, agricultural up the XXXX.

Plant difficulties, Nutrient's to the inflation back comments XXXX by in about business for over EBITDA XXXX. the from continues was in Specialty million, first that, turn with some Our constraints. first of our raw I'll supply materials, $XX.X Turf and quarter for an challenged labor million $XX to increase outlook. Pat And quarter and things chain be

Pat Bowe

Thanks, Brian.

commodity Sea overall wet XXXX performance into While this quarter we It's expect and in American not get prices fields We week. as as elevated And of our agricultural low to worldwide stay But stocks. country average. the anticipating our that slowly region, continue South to crop, were the business strong. farmers five-year beyond. for demand high smaller the to did anxious with soon is to we across relatively Planting the into remains first a outlook across national and some believe Midwest their do our are the XXXX, started can. behind in they week been Black the strong that financial currently due is know disruptions the meet time, results we

will primary positive. accumulate tight all returned crops. expectations Worldwide at worldwide We up to but with values. wheat. opportunity expect on are the demand to quickly harvest impact able wheat to And activities them our the the with income supplies pleased supply projected fall from to in we're inventories good And be very strong continue remain when foreseeable not ownership into grain reduce to of Storage our future. Fundamentals business possible. has reduced we're positions U.S. Ukraine. large the eliminate for ramp

focused very the conditions we're With these this year, markets, planting monitoring and of progress at and the harvest in impact U.S. Safrinha the and on Brazil of time the growing in

fairly ethanol grain we're season, values support to for As margins co-products customers the levels. In improved ethanol with the third decline U.S. not our second The strong year. on always, has seasonal favorably support demand marketing demand. expected export margins. a this are gasoline crush spring yet returned but moved of has continues and stocks and to to quarters demand overall the working to Board but recently remain farmer high domestic good for have our shutdown despite pre-pandemic growing plans. and

their merchandising very completed marketing our spring adding results. our are are lines diesel All them In ready of renewable customers. successfully and of product Two meet a driving array to wide of and business and low ethanol successful summer high demand. CI the operating five to feed feedstock well our shutdown facilities is have plants performing our now increased to protein addition,

continue market American Ag continue about perform high and We've a opportunities. more safely good planting expect position income. effectively. We high quarter. by our to very commodity inventories to and for period remain seen positive North particularly and we're margins supply in fertilizer outlook from our a committed our of by spring an than increased it's operating offset sustainable in prices. to strong market supported value in support first through in We been spring farmer have the Nutrients and season fundamentals, tight reduction nearby for prices growth, the With prospects to Plant customers, managing for adding We the in ongoing excited season. and well for application But received suppliers volumes risk

diesel adjacent as refresh include on well supply Dairy projects, Ag past from on strategy like this I'd extension and role our within Feed supply again Commodities Africa includes the Middle renewable grain in and mentioning working our The our a the focus to and our growth growing to Capstone to that to the we're turn and which business, are both on recently Recent are Ag to as continuing refreshed copy in farm a fork. our chain supply our thesis. is both year purchase the Review, key servicing We'd U.S. and potential chain, XX, growth play about Slide recently investment current our attention pipeline, website. acquisitions business customers fertilizer in of organic grain to year examples projects. Now introduced East. draw We're from your Sustainability feedstock chain. published which XXXX our We today to position to last the as of supply our Andersons like this

trees focus, exciting to flow, to grow continue to or strategic we'll questions. two With the symbolized this able firmly this strategic that, be to With verticals, to entrenched Ag are balance Ag focus back paper, sheet, of in in our sustainable be see supply cash stronger on call we and to hand We to chain piece entertain I'd economy. opportunities your expect on grow. Matt able profitably our tighter and like many U.S. and

Operator

you. Thank

with [Operator We And from come the first Bienvenu our will ahead. question Instructions]. question-and-answer will Please now session. go Ben begin Stephens.

Ben Bienvenu

want the on start, I Trade to first business. question So my

market. had sharply obviously, rising So a we

some the basis basis quarter. about -- numbers talked You positions your that of value hit that the changes first in

into have You next putting position quarters. a good yourselves gone as characterize that heading to relative where several in prices the

similar making the in to have you model of power the reaction and you have it from severe news a from couple outside the last some this it lost sense all today, and like might we relative what Can to the like us you would've position business the difficult the you the of up help changed earnings track first quarter? maybe in inherently has. help year, our a the think seat. about through first for deliver to underperformance place the positions of stock make think just quarters in to maybe is expected seem what versus to think quarter the maybe that you doesn't is I Do results sense of make us in really sudden, pretty that has next

quarter us? the grain in dynamics same to and we through so I'm And the markets and curious, for we some associated the could next there thinking with just sharp in should Are what try were you dimensionalize track short-term on several about move the move quarters? first be as we

Pat Bowe

very to a that's question, a and of Ben, lot Sure, there. good unpack pieces

like quite that quarter, you price grain, grain a all, good First profitable where about in a inventories quarter that. thing to what ethanol, accumulated in record own, That's quite morning we've industry. take the million but ethanol. of And lower because and see million, it's mark. normal that have bad can have fertilizer it's of high And yes, business, do well you to done when where surprised We are and $XX action as weaken. the price, spike $X with reduce had levels this had have the mark-to-market, to we values. basis that, quarter historically maybe buying at in we I'm flat a a strong And in others basis the you our probably levels good commodities market very in didn't quarter a very you in

in and this to levels demand market So discounted later of like you ship business then we that rising the have we're basis our year. basis and traders benefit can is a them elevate buy

companies basis this also depreciation, good you a want timing than to about or commented thing. it their differences, other is industry call if So public the

an prices and on buying this get value. opportunity to is in So we're when spike like basis and futures farmers sell That's ownership the weakens. better a

that see sign strategic in back we year. that will very So positive come that for a later as this us

an demand, happen? that And very ownership feel going very be good No, about us think can us it's we Now, in and be domestic month time to the position will year. and solid demand later that's I that a date to solid that's with historically puts that export but and and strong for going in guarantee that. the good

just to of think some last lapping is we year. thing about the Another had

XXXX -- XX had was in year performance and our Trade. strong some best in we we So years really

was still Last good very a One selling spike of not year. quarter about last the last had a them propane. winter year, very the but had high business, first than $X $X prices we're million we probably to and had in lower it profitable, what million

we We are We announced to Rail just we positive rail And tough that we meet where behind of position in XXXX. all of we sale from completed very transaction Bottom the have industry. match in a the our shops. So final our about that in tailwinds was us the like segments. the line, segment.

good of good very very in in position, So and feel us. strong balance about sheet, what's front

So just commodity sensitivity I because this with markets. morning some think maybe overreaction of

Ben Bienvenu

Yes.

stock as job Okay. follow-up, job run It's and the is worth. to times cash That The is our think trading done try maximize -- stock now Maybe public now which value, know peers the Recession, what flow good the makes the book to it's sense. -- business book trading Great only in your the a during are I about it's of and and your the COVID peers business. during really stock at start value. at is two to

a You program. share have repurchase

rank think and But working how repurchase on share when plenty short-term. fits the know you generating think spending, You're the you have? demand opportunities within do there's set about where allegation ordering that capital about capital of cash. business I you of capital

Brian Valentine

we've it correct. ourselves And question. this about morning, won't surprise been Good Brian. something is you're talking this that Ben, so Yes. you,

windows able and is program And periods we're closed that we obviously when purchase and we're to when a periods place. not able to. have then have in We

So closely. continue would of our evaluate it within and one will toolkit say, something is I we levers certainly the to that

Ben Bienvenu

question margins, you secure me. positioning kind of industry heading of margins? your lock the Have business Ethanol into second any helpful? the on sell margins us in ability to color Just could Okay. last around for done and give be ethanol have Do And ethanol your would you quarter. improved materially have any that? forward you

Pat Bowe

have positions have done quarter always create as to energy value, been second on when year, early hedging we we We've for find some Sure. this as done well some corn. opportunities the

in driving. have market a the We this Will a in good of finish. to about of for the to a nice position. Like, starting fourth as ethanol happens is the we're be position a think what like look good quarter year? It as fourth the to is it's This all like going year more that the optimistic. are So exports was balance in of to the be quarter strong We're factor. of condition going XXXX? and feels be

So and blending into ethanol can value ethanol is lower help gasoline. economy by cost low the

time So year. really, this ethanol here we for think is this really a good to shine

we're well-positioned. So

their corn strong. are all co-product been and from and shutdowns both very up have plants oil feed Our values

in good we position. ethanol think a So is

Operator

Our go will with next of question Please come from Montreal. Ken Zaslow Bank ahead.

Ken Zaslow

on to back quarter to to clarify just want quarters go horse. were when the to exclude the were ago, in kind of first One outlook Not you things. is, and if dead to this think based I provided you would beat two different months any the would sort quarter three what next happened three for -- quarter? XXXX, some you of be you

Pat Bowe

market. they're the I don't the because Maybe carries and we ownership some of Ken. grain so, of think a better wheat have little the into coming No, bit

and is this I could -- of because the bit. up we're -- this, this planted haven't the we an that in corn such It's pick a year So ground little hate to U.S. what the we crop all harvest pretty positions be. But for general, feel we're in would in fall time the time the good at where of market. our about important guess and

think little I yes, are a say, would I So higher. levels those

Ken Zaslow

continue And Okay. just this. then on

I to I implying is Is or your mark-to-market. the -- misunderstanding talk companies item? to happened out other said because a impacted want item that about And were I that You -- it compared what cash there think between this yourself it non-cash you and am just or you peers? a you

Pat Bowe

Yes.

all as the Just -- you grain merchants, levels adjust basis moves.

basis down then month, at So hedged, once level. locked the the month basis bring as the in lower to that you're futures on end we and goes new of a you're

And and other releases and look So lower and We it public Unfortunately, up to elevation mark then businesses the it I up, mentioned ship soybean timing then actually market that's that we talk accumulate the but own, thing. a that elevate and month their companies times businesses. back related this grain we differences is normal that we happens, goes it timing crush that issue very had when it's good to when other good about we down levels. it shouldn't for about back it. weakens mark can We at And in basis grain where or you futures causes thing. a spike, the think a basis companies,

Ken Zaslow

item, is mark-to-market comparing not it Is sure you're a it? I'm understanding that the I or cash the but guess making crush margins. basis, it the But to non-cash on that, so

Pat Bowe

we're basis And And out the on in soybean the your higher you're we products don't that marking results. but bring as have those a inventory, later. so levels it's that month. at ship business, crush -- back each will come we it's we to out a different And just the basis quarterly level we Correct. not margin, feel

Ken Zaslow

-- then of And Okay. terms in

Brian Valentine

that Just reduce. non-cash a Ken expect that of on Ken on one, the positions to ethanol on point your is -- those and the -- to mark-to-market the we

Pat Bowe

is sorry. Yes, ethanol separate. Yes, I'm

Ken Zaslow

Yes.

this and quarter, about it it power navigate results? last didn't. to have it earnings? it for year a the the elevate next my your benefit that the you two years, how think transitory happened? And question want of things tragedy bad is, and level more is things obviously, Ukraine cycle, I when in play you these Ag this? Or obviously, your if could think part of through of I you from But Russia and you potentially of sustainable more to out, don't earnings how then it that about good ever extends as Or do that does And out and from do more Okay.

Pat Bowe

it level I about So of it, extended time probably of is anything, a think earnings a it's sustainable it's issue.

we we better disruption, Mother any and back next without next And a year, have political before one could crop come in have have to So gotten could two you crop S&D. Brazil a maybe in year. normal has in Nature to balance better years,

supply Now, extend balance, global of and the and to to out tight as demand and likely very is of grains crop years.

And so this in in Ag for driven let's good is plant. places demand longer at because happening short farmers Very of call for rally farmers, markets globally incentives being world. rally to that's of continue other the prices to U.S. likely supplies the

volumes interest we So still with higher food rates, products, where can it should demand. even the economy, with demand for and And have companies ship. global food Ag is is that strong

continue this to unfortunately, to And going more because longer fundamental sector. in we impact that So have an people year it's of the extend Ukraine, a basis crisis, season. should that one or than good have over the very one linger maybe Ag but will across

Ken Zaslow

Great.

up. this sorry not right, position set were forced it, understand positions, you my not of go around just you or your sell back to trying and maybe to Just you head, your grain out kicks on just anything did were look I'm grain point,

Pat Bowe

time. First

Ken Zaslow

just I guys. make to it Okay, appreciate Thank I you. sure want

Pat Bowe

futures we're really that. the us fundamentally opportunity levels. lower it to do a good bases grain at thing time market time, pleased really to first gives this prices effect. rise That's the when had At No, to inventories on accumulate do. a in And we've

last have for to thing for take We which well-positioned and positions good good that rallies, a the forward. advantage from wheat market us we is that We're thing buying we're our year, bought good of going farmers grain them. a when

like we position we're in. the So

Operator

next Our Klieve question from will Street Markets. with Capital go ahead. come Please Ben Lake

Ben Klieve

thanks right, for my questions. All taking

ending just Pat, you volume a on quick on the break guys comments Trade follow-up you're position, the position quarter? especially basis on the making down the Group, the just can inventory in a the First, inventory

Pat Bowe

understand question. our I not sure I'm But we have your --

Ben Klieve

The mean. I storage, tons and

Pat Bowe

Yes.

was is So opportunity that point. this the And basis our ownership at we're of and around to year inventories. last time. own good is purchases marking can us. turn year, back volume time for that higher later. same we have is of to point that we time previous than able It's that a than grain down, But good elevate levels That's that the better

Ben Klieve

it. Got it. got Okay,

when another -- characterize within the of quarter versus the the the the kind the of the in, the you the on you you of would I of curious elaborate -- the how that what of Group question could if kind set been first the Trade extreme that versus kind first think really volatility half within performance quarter, the quarter the can mid-February Group, and mean business part ended trajectory have performance that in second quarter? Okay, Group in

Pat Bowe

able system not on get but of and back when starting our work a a trading had the to end Also, little shock a to at shipments grain particularly and down all, spiked of got improves And Sure, kind or not, out normalized, and so going sort were started it's wheat to how to to I logistically. the a we're that bit. margins once we of kind think a out, calm at were the little to markets to bit it's initially, when improves those normal profits as water so things broke then out alignment. the there's of the quarter war normal we

at providing volatility Ukraine, So why we it challenges that buy levels, in actually discounted seen like is and we war those gives we'd in and wouldn't I is to commodity to able to been otherwise. markets. us it's back the And navigate in due basis chance getting that something the industry others have a to values that that the mentioned

quarter in outlook Renewables the quarter. So a business. into come record That that million good our fertilizer, mark-to-market thing $X.X for our ethanol back next in other an with Again and businesses. a in Strong record in that through to good quarter should fertilizer. And that's right our EBITDA flows very business. included

about So we're outlook. optimistic very our

Ben Klieve

related to of by diesel to ability kind of a that And co-products, the mean, other performance in with you lot nature. that an most outlook that strength much degree in versus expanded quarter that and internal one strong optimism organic here. the renewable just two optimism your what of and state versus of the ethanol optimism on I about I talked of the segment. the the recent to efforts is that in potentially And market into that high in is kind it. the one I'm of going optimism are kind the things call, in on repeat communicating clearly Earlier mean, current characterize the of side, with last Got ethanol. market general your if comment fourth you the margins There's can for you kind wondering capacity? And fueled capabilities? environment, how of buckets. greater a value me kind

Pat Bowe

But point EBITDA so, say there. we're going the record to quarter. a Yes. for good out we again setting had -- Very

into Our start driving improved than demand. And up you to QX better for summer crush QX QX, margins ramp were previous spring margins the and year. have as

to for demand is in So stocks a this shutdown to coming off as help. corn to Biden's year. the export The to with value help. a you'd But going to there ethanol, actions market, help. going higher But perform demand are like High than values blend now EXX the And for them and the like as looks is absolute is and feed that's help oil a are it that's is usage strong, going homerun that's a Export little to of season. values going to and good well that's help gasoline business. see help. going are not encourage

the positive lot ethanol fourth general very was in high out XXXX pointing quarter in of tailwinds had there's the industry. of margins. I So a just

the those think be in we lap XXXX. to earning might nice high and to the of for the So bar year have fourth improve clear. quarter a period balance will ethanol a But margins that

Ben Klieve

Got it.

my leave get helpful for to I'll Thanks commentary. think Okay, taking that's And a that's good in it. all queue. me place I questions. back for

Pat Bowe

you. Thank

Operator

Instructions]. [Operator

Seaport Our with ahead. Larson will Research Partners. from Please Eric next question come go

Eric Larson

morning, Yes, good my Thanks for taking questions. everyone.

American South about about, know soybean production. bit little the a in talked you Pat, we shortfall So

growing the growing know bit. about are focused or see the U.S. not to come sharply some which reason And even to down by prices could that pretty corn better higher. we're of the looks American last go don't in Central Now and really that be country. investments us little I could hear in little offset that at Brazilian But part starting think of the South Safrinha if And in actually give talk on will kind crop areas, two the people maybe so a this point. conditions starting like week to bit crop southern Safrinha

So that? are thoughts what on your

Pat Bowe

Brazilian Yes, Grosso, as good that Central The can you Goiás especially and closely Uberlândia and the that out Mato those farmer. pointed plant you at drier as cause a know we've Eric. seen watch Minas area, conditions, I shift I a area. conditions out there. point I this in Lavinia region period and mean is is a Lavinia operated particularly dry which what warmer,

get a don't And just people drought, as enough Safrinha Safrinha. second but quite know, to little small which is finish maybe used softer total to harvest. we little Now to that harvest, the be the not a

big as as just the full harvest. it's Now

So it's really production. important Brazilian for

corn corn little could soybean exports bodes U.S. is that a for well So and stemmed mentioned. you be And prices and as bit. that

farmers can get American As little recover are week week. we know amazing behind the by was wet you as you report On plant a we'd maybe much not be XX% wet and normal, because will behind it's this rains with the bit really Eric, probably to week crop well Midwest. a recent the they across to fast. XX% But also we're next Monday, corn know

we'll It -- So a as hit for panic we would as dry be get to good the corn see in too That's to get it's corn field patch. early nice likely planting. soon the button. we progress

I now. think key that that's for the a market is thing looking

favorable get it's you to we that, in good U.S. So ground and a just now the need crop the production. make said as and to the U.S.

Eric Larson

values that are little minimal. demand you million cash is crops. it are seeing the something? you seems be bit demand seems demand for seen any little $XX seeing It $XX any bird few So Are like flu we're issues a you bushels for values, we've global in weakness? demand huge about not increase -- but a mean, but future there's floor me seeing, a And I a the of to things signs pretty obviously to talk maybe million, minor, only or flu, yet?

Pat Bowe

disruption Sea, the the No, right. for think big I ready Black is a lot

parts of normally top high traffic would we're that PNW countries in that of also changed. seeing is some when have cases But other on the go So freight patterns. or be And remember, away would already. right to wheat getting ocean from these world shipments of to that's go the to, Ukraine normally coming from Russia, even out different paths

inflation, we are there. beef, chicken unfortunately, But So off North the solid markets Africa. on do food by what then margins global haven't see prices, especially Ethanol And consumers America. is in are demand. to markets, are strong. is in still very going planet the turned demand protein margins people Because poorest be paying your are we pork, Crush good. the

good. milling and So wheat in North American demand the is for very I for was quarter. up processing mean, feeding the still X%

good add it, here. disrupting there's these now of exports. fulfill, And normal that that's shipping demand, consistent of of the you patterns Ukraine shortfall top So on would normally pockets domestically China's been very And the China significant here part U.S. going off quiet a little of being see still to in take a buyer commodities. but is U.S. that. we late, bit

Eric Larson

just So demand more one question.

kind lot prices people last. higher substantially summer that And a strong high? so, this gas domestic the it would going travel, be type I Do of into that heavy ethanol fuel usage actually if gas there's this summer? have to some of vehicles. know obviously for side export really versus maybe think And softness offset transitioned You gasoline you that too of travel, prices RV -- are if to soften had summer enough demand demand could

Pat Bowe

than Yes, and Australia probably take the trip I that's will an someone It's or we don't million question to RV chip the flying something. that mean, across cheaper country? dollar know.

that's over in driving the of those because is back to recreational So have commuting. road going it work the would And can road the biggest travel start full concerns COVID going People more source up in pick usages the demand levels, improvement to numbers is ease, you -- to levels. is, travel that have -- shown question time been offices. pre-pandemic as returned to

see return aviation we'll the travel, recreational So in fuel, summer, a travel. we you're think seeing

So should this driving could demand on On exports, good. higher the gas that We're see be we will of strong Unless side just year. pretty a your on question be prices again, should ethanol see demand. planet. from really pretty, demand, meet pretty go lowest oxygenates miles. we the that up good back really But price

We et as and depending industry. how good that much up will countries some those ethanol an on have with opportunities to think be freight, demand and what of we be happens And again, ocean export exports cetera. will

So for about as all be good. quarter, be really pretty would ethanol will we happy. it very great the we as fourth got peaked I I to be And bar, much if like looks high margins how cautioned said, there, a but in be that would

Eric Larson

Okay, thanks Pat.

future you upside to sense have you on -- to makes market how today, great of in opportunities do aggressive putting mean what with positions bring seeing opportunities in guys were your a saw balance I market quarter out final values could much of make balance the look can is sheet, me, When much the your really to grain question up you terms have trading I'm pull of of pretty you other in actually sense further Brian, that you so in advantage I first sheet? what your business. basis take which So your lot how if you short-term, does for

Brian Valentine

have Well, and I the million liquidity of in as saw mean about extended as you we we $X.X agreements today, our credit and we sit available amended first quarter.

really group understand role from your in relationships. Because, North really that strong the our that marketable have to plays candidly, margin and And so We bank lot and readily Eric, inventories, back they whole American is, supply the be point, Ag key can Andersons chain. to timing calls, continue our key function The and support that those to a the differences. of that temporary on some and point of

as peak to it'll start also first closer taper you to to sort know, we tend borrowing I see second think our get quarters, then harvest. we and of in

capitalize So I our on opportunities feel they would say we as presented. position good about to

Pat Bowe

really just positioned feel having borrowing, about that deal on. growth but short-term for balance good working real also projects sheet not we're with to We the strong being our

in only the have. of Board at the trading as happened days corn XX The in think the Eric, long back if you happened and And history was you've And I been remember when during it's severe all of I numerous the trading think you'll of drought XXs, around time I about it's last middle as there traded under year. in July, about when of Xth around $X, long $X.XX. futures it was move a Trade. that it above a But didn't corn a started loan, dime XXXX, times.

So for growers, global our U.S. this for a is there for shortfalls time. in It's industry. long unprecedented to We're have and great our prices these good market. to the as period these supply elevated of

good what do. time show its and really a we U.S. is this So for can kind spread wings agriculture to of

a industry. our it's for So time great

are is really prices high, good and this volatile a it's Although thing.

Eric Larson

prices prices ago. long bucks corn three just corn well captured, you've couple Yes, or not too

prices too. some the years about So couple $X.XX, talked corn in a weak we've you of pretty had last

volatile very it is So stuff?

Pat Bowe

Currently in that'll planted you Wisconsin, make Eric, Minnesota, get crops happy. us in your

Eric Larson

put haven't in We yet. a the seed ground

So thanks, guys.

Pat Bowe

Thank you, Eric.

Operator

session. would to to conference remarks. any Mr. question-and-answer turn back the This Hoelter like over for concludes our I Mike closing

Mike Hoelter

want for to all We this Matthew. us Thanks, you thank morning. joining

call Our results. we Xrd, next AM Wednesday, at scheduled conference earnings Time, quarter August our for XXXX when Eastern review will is XX Daylight second

you speaking with forward interest The in you look to thank always, and Andersons for we As again soon. your

Operator

you for is conference presentation. The today's attending Thank concluded. now

disconnect. You now may

The Andersons, Inc. (ANDE) 4 May 222022 Q1 Earnings call transcript