Earnings call transcript Q4 2022

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Operator

Good morning. And welcome to The Andersons Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded today. I will now like to turn the conference over to Mike Hoelter, Vice President, Corporate Controller and Investor Relations. Please go ahead, sir.

Mike Hoelter

Joe. Thanks, and earnings joining call. everyone, Andersons for you quarter fourth thank morning, us for The Good

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

the be be website are and the is of recording you viewing our supporting presentation at on and our If slides the the will page this being recorded, shortly. commentary available sync. in webcast, will and This made webcast andersonsinc.com on slides Investors

as of uncertainties. attention Certain your statement the disclaimers are the release presentation press to performance to well constitutes information forward-looking statements. X risks direct Please statements the on related as statements respect with subject various and that events, disclosure views to the today forward-looking financial the conditions. in industry reflect forward-looking and Slide to current future company's discussed These

presentation Actual you materially comparable differ are SEC. in presentation. non-GAAP the many GAAP a with measures. appendix most Reconciliations review reports within of are of to financial measures We the contain these today's described of to directly this included result the results could the file This prepared on remarks and company's non-GAAP encourage financial measure factors which as factors.

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

Pat Bowe

record interest call. fourth you Thank the overall us. your We're kept results our everyone. in review joining which Andersons to operating morning, good quarter, for for And Mike. a excited and The Thanks for this year for

full team's release, XXXX. ended EBITDA We once earnings performance has continuing and $XXX yesterday's strong ag again earnings record in exceptional. million. our of in noted operations been from year adjusted fundamentals And we existed As with

for years goal of targets I'm to that exceeded say we $XXX aggressive pleased set of early. million EBITDA our And EBITDA three XXXX growth. to previously million we As $XXX

XXXX. The record Trade also updated record segment. targets quarter, this which a I'll call, for kept fourth a business the in Later discuss posted for year

improved with were our very results to results countries regions source values quarter from footprint were across ability performance and led with asset benefited and grain fourth for needs, and to basis attention Our our strong by and deficits. grain customer storage income. also Merchandising rising

Our record but not Renewables generate again business margins was crush to solid weakened. able last as profits, match industry quarter year's

with business continues reduced consumer positive feedstock carbon prices as contributions But grow especially segment. market sidelines also We did the major low Manufactured make good fertilizers. declined our renewables have lines Our engagement results on business. fall to impacted ag and buyers to Nutrient have experienced are application, by our on mixed for product demand. liquids

results. optimizing the fundamentals. an I'm early Brian? thrilled ag Brian XXXX. over of discuss very in to I'll to to cover and proud back now I'm their of team results very I'm ANDE second strong key outlook our performance When finished. consecutive our he's year be in financial to for results. of environment going with strong things some turn

Brian Valentine

year full increase $XX million share Trade. in and We're $X.XX of $XX of X. matched of continuing Adjusted diluted or to The Good pretax $XX the to or quarter XXXX, $X.XX performance of from share. on the This million, to company, per in results fourth to per of compares the our company to In per operations million adjusted of income operations the the income nearly to continuing XXXX. fourth of diluted quarter $X.XX net or prior and due attributable year quarter a attributable the net record net million Pat. diluted Andersons income reported fourth morning, everyone. fourth sizable turning quarter the from Thanks, $XX income share, attributable now slide company adjusted

to million, increased EBITDA billion. million, to was million, than profit record. compared $XXX For $XX $XXX adjusted EBITDA EBITDA quarter $XXX of of to Adjusted revenues more and XXXX full consecutive $XX.X the or better year, $XX than $XXX compared fourth almost was XXXX for a million up Full year gross XX% million on million, the the second XXXX. quarter in adjusted

of flows to million let's compared $XX Now, million to prior Full year in from of operations review year, the our operations X working which slide to tax move fourth capital XXXX, liquidity. from in before million XXXX. $XX quarter of is to $XXX cash comparable We generated and cash million included refunds. cash cash changes $XX

commodity Short our term while low seasonal a prices Our highest readily are our yearend debt continues in to Typically, harvest. on result outstanding to exceed occur as hand of term producer due compared borrowings inventories timing is the payments at our to short spring businesses. higher debt, XXXX, after marketable inventory down. are of seasonally

we liquidity volatility have banks, We key that ongoing from continue to and as play chain. ag amidst the the in adequate have supply role strong they understand support our

X, to to slide a disciplined capital continue Moving capital. of related year, for spending to which maintenance $XXX to about approach were which investments, half we and the take million

target Our X.Xx. debt-to-EBITDA less well long remains term below of our stated than

Farm the spending, to are performing we integration quarter, Service and Plant is closed on addition the during mentioned two Agri Trade Bridge bolt-on in acquisitions previously well Nutrient. and capital In separate underway. Mote Both

evaluate in to M&A additional our including opportunities. projects growth We pipeline, continue

sheet support our balance meet for investments that growth that a have those financial We and strategic will criteria.

our share total is utilize over the repurchase cash executing of this $X to million to date repurchases $XX program share quarter. through million continue We The in program for January. used over

$XX on of XXXX million beginning $XX adjusted Now the slide to of pretax on income and fourth dollars in fire quarter we'll X. million compared same reported move to Trade inventory of asset adjusted businesses approximately in of review Trade each damaged resulting the in XXXX of charges income from XXXX. of our income $XX an of a million pretax quarter million income of $XX pretax adjusted Fourth impairment. period and excluded pretax with insured

for markets, doubling also of fourth from improved Increased XXXX. compared adjusted of significantly grain assets quarter fourth nearly $XX income our EBITDA $XX year. quarter well adjusted continue prior margins XXXX. XX% the teams and the to EBITDA with dynamic the up merchandising of and profit quarter had in elevation Our million in million adjusted from pretax the these of to Trade increasing execute gross

XXXX, For Trade adjusted $XXX had the record full to XX% of which EBITDA in year $XXX million, than more up XXXX. compared was million

in highs the company the fourth were crush $XX to Moving Renewable quarter, X, to substantially Ethanol quarter $XX of margins extreme to slide lower XXXX. of XXXX. attributable especially during reported pretax in compared income quarter segment fourth million, million the to the the compared

in by merchandising Renewables feedstock of lower $XX the Continued ethanol helped the fourth of team to strength quarter $XX diesel fourth and margins. our corn crush oil values offset compared XXXX. EBITDA quarter execution of had renewable in the million XXXX, and million

the generated For Renewables of year, EBITDA $XXX record million, full XXXX. in to compared million $XXX

lower in XXXX. our during the continued million, in fertilizer Plant The quarter the of generated pretax slide quarter during margins experienced of high, the decrease liquids fertilizer agriculture $X income supported specialty prices Nutrient a as to products, of quarter. business the higher XX, record million fourth $XX products. income to which reported remains our fourth margins Turning business Farmer drop from dramatically in tight markets

However, volumes in fertilizer were further prices. lower in of declines anticipation

$XX us. the products demand from experienced the quarter we in lawn Plant quarter some EBITDA was a which of business $XX inventory million, for additional slower now and Nutrient’s believe million XXXX. write-downs also decrease manufactured behind fourth Our are

the EBITDA million, XXXX. was to $XX Nutrient which year, Plant For full had comparable of

And our about with that, over outlook. I'll for to things Pat back turn some comments

Pat Bowe

execute about remain second off favorable. record Coming a excited this we in Brian. consecutive our positioned year, Ag to remain fundamentals well environment. Thanks for XXXX. prospects We're

volatility is markets of continue good to will challenges business We Corn positive fall. from we for the corn all continue the dynamic to our XXXX ongoing segments. expect At markets Yield which grain time, in the harvest will into this merchandising plantings, US higher well in influence expect western provide Belt opportunities.

Trade to Eastern to margins of well be for Ethanol perform corn and plantings continue execute opportunities. storage expect low should wheat, higher positive Return been to assets. on to year. start have the these spring and income crush We

a maintenance into yield positively increases in carbon from low diesel corn the intensive distillers a strong plants shutdowns to to benefit in input oil that to miles spring making values. and our improve believe driving second of the of in renewable we the However, also oil, continue number both and influence quarter. quality We're industry. three we may investments And

continue renewable on well and production that prior up, fieldwork diesel positioned liquid agreements our farmer demand plantings As and expected has especially products. our drive On buyers supply numerous believe for to in are the we're ramps to this period to feedstocks. kept prices plants We declining on to sidelines. increased corn through support fertilizer income various

see the peak. margins more nutrient plant last in volumes season. higher see than to But likely as spring approach planting expect we'll lower year's we We normalized

advantage. key an in With crop the Grain production areas is near these have in delays an eastern purchasing product available Belt

risk closely our in fertilizer We but further specialty lines. fertilizer, core monitor anticipate products. continue declined, in customers prices need We market be liquid when industrial our to must growth ready to they serve and also have product positions our our as

our on slide revisit strategy we'll XX. growth Next, as described

and areas reduction include strategy global fertilizer food, Our grow. verticals, carbon grow for expected and These feed demand remains to as sustainable our fuel to within adjacent core and is opportunities. grain to and

As many in our pipeline. earnings projects have undervaluation mentioned our release, we in

company. projects, while to but our have discipline new We proven our execute ability also exercise growing

bring to our innovative We ability to focus expect these unique verticals. to across we remain markets these and as continue nimble on

feedstock Our suited our to growth, and renewable excited own is processes. diesel provide strategy. to delivering feedstocks, our focused We're production as renewable we're to about enhancing third market leadership oil inputs party with well on balance corn and strong and merchandising sheet opportunities, particularly services remains our refiners, fund capacity the against

innovative including for organic to row products and beyond growers fertilizer traditional addition biologicals we're developing In crops our specialty crops, of offerings, expanding consumers micronutrients. and new

including We products. within product extensions our footprint strength, within will for manufactured farm our and areas of line also centers our consider M&A fertilizer core

established update we that $XXX XXXX. We approximately million by our to time, EBITDA are goals. XX, ‘XX million was we an want goal million progress In slide to EBITDA EBITDA and target result. now to provide XXXX, $XXX late XXXX, of by regarding XXXX increased our to million which $XXX by turning $XXX our million double to an $X against Since

past over now our these we've performance two schedule. of well years, Given ahead strong exceeded the goals

million, $XXX revising XXXX from annual to to growth $XXX which such, EBITDA rate up almost will our we are million XX% of compound As XXXX. a represent target XXXX

in discipline on goal business XX. prospects. ratio capital volatility With XXXX. I'll new Because to we more EBITDA each we we to you a excited and provide about bit to-EBITDA ROIC segment, long And maintain slide may historical keep debt- to fundamentals our than portfolio. continue growth target, And be expect On toward less little by our X.Xx you $XXX our and as where remain detail expect to to chart, continuing in while improve term this optimize in approach positive. our segment markets, see this this growth not million our the move ag of linear, overall can in our we're grow but investment,

to team continue will exceptional and customers, returns. support providing strong decisions make Our growth service is to shareholder and our committed that steady to

I'll we'll now Joe, be to take happy to call and moderator, the turn back over our questions. your

Operator

[Operator Instructions]

here come first with Stephens. question Ben will And Bienvenu from our

Ben Bienvenu

Hey, thanks. ask with bit evolve guys about and to, little could, talked the respect things spots this of quarter. renewables. expect to on Good I little you I if a think a the to Pat, morning, about you how year bit you you balance through in want talked congrats

the you Can EBITDA nutrient. be might plant versus opportunity. And cadence as little through earnings most about your of this blind about year? least spots you talked move a full and you where feel maybe as where the talk we bit about year You think confident

Pat Bowe

Sure, Ben, yes, good question.

commodity moderate think this peak I in I the soured as ‘XX. past think going our we, prices off mentioned, are earnings with I the year some to coming So overall, really earnings of

As know, the are war. prices down XX% fertilizer Ukraine almost time from peak, you XX%, the in for well

we said $XXX EBITDA, put that have pretty had the to the still million So high which that, about had we felt we year. that. last commodities on felt forward pressure $XXX million Having for original we about we was XXXX, environment confident we inflationary don't good targets with a

it's I part the weakness is ethanol the think of in early the cycle.

know, well has board been So good and have Corn good, values soft. bit, off we pretty little a base feed and quarter, you this have oil values. as margins crush come first

we're we that reversed than And we're little see year. could in see would liked. starting turnaround we the to softer, ethanol, So have but optimistic a a later out in maybe

quite the The other of sidelines we're mentioned, farmer, as have with be degrees point at a on at the today. fertilizer We're markets down here would time right in XX the come markets in bit. prices. fertilizer as sat weakness that is we year now, right The

So to some it made get and engaged for hasn't by can prepare active decisions hopefully, growers really start the because to application get we season, to spring wholesalers yet.

a little increase we good in we're volume, we planting, of, volume bit normally increase we'll in So optimistic we're fertilizer expected be, on think of where with production. behind a see acres corn an

So that's good stronger little area volume the but that ethanol a or we like weaker, in an start was have finished year. may a out later think then to

assets. crop, wheat eastern On COVID acres. side, that, again, I is more, restrictions got years. as still being we market a seen as lifted. And But up haven't they've come the Having higher good with the for as said we're good grain But we've storage a to expect our expected income, suffered little see we've Chinese wheat it's corn the big which their that. remaining think previous opened did economy big in to

there's us to So well year, a probably in trading year. that the I slower the a be out opportunities have hopefully we'll think to play going can stronger start, finish later and for

Ben Bienvenu

about has sourcing, origination. things the growth expectation that this move prices diesel price look volume of bit for renewables your little your ratification see production business see you talk capabilities is I bit And And we trading, maybe as come business investment makes how that Okay, year and been of Can know year, for been start feedstocks might renewable would be we it versus a why on any your sense. forward around have your and to firm to area we through online? much dependent? dependent softer? thoughts and we that little a that incremental start as oil

Pat Bowe

a Yes, point, Ben. very good

de it's So an the we've a we a set desk, a couple area grow. in renewable own ago, diesel we'd corn originating like still couple our in points our at there. addition trading We've looked feedstocks successful there. production, to manufacturers, years One acquisitions up been to is for couple oil

behind. we'll as look area anything done some we opportunities as time. But haven't for in mentioned, still it's We continue on the to as be think bit a big that we going think an Because of are merchandiser us this go plant And at startups, little you that good area. to I forward. a

demand. startups to question are the it's a the of when RD So relative feedstock

some a bit will feedstocks. which couple So I behind think we are it. coming online, on a But little ones of there's as put drive maybe big those it's pressure for which demand backup

bit a or and maybe little diesel journey it's -- the important on do very that on strong the So and breath next maybe after end really growth, year this to renewable into at see this demand demand. our RD of year expect we for taken a year that the

optimistic about still segment. very we're So that

Ben Bienvenu

bit a Okay, and you about in participate as want up guys sustainable which you a aviation goals little you'll extent maybe think industry firm the new of you great. fuel. considering you do likelihood talk sort of any, opportunity with But longer you theoretically to meaningful I I term what financial that, partnership want in as nice provide The interested and about might future? your want expect to think and the be longer that about to I S&D if offtake that laid out here. to you to ask term

Pat Bowe

it's anything excited. we're an point. to but question, quite good another it's this We don't About. have Yes, area at that announce

or the to it's to that And cleaner I seen. with technologies industry happen, and those at, partners industry, years. for tech the with that a and industry. and aviation partnership participating We think as our to to area for that both that's to be looking in be the business, an to players at personally, the the in. time. supplied this specific look many focus aviation from government both remain be for see thing for Sometimes say be have be edge, when be announcements We and Petroleum, very ourselves fast It's probably for to least for the at Marathon follower, good name general. aligned that's we benefited on a is technologies, will upstanding going our exact been we've big think segments opportunities, are timing don't optimistically a we to this and at oil for future, going We the bleeding fuels look partnerships our renewables industry, just key SAF ethanol agriculture the going we I in with any industry, new industry exact sometimes and I scenario, want like at in industry. But in

be through years, or the aviation processors of will in been the ethanol opportunity a now the many involved business. over benefit and it's diesel, for be we years of days And in think to So fuel. for of a that few we've that the in days beginning new ag beginning same I renewable sustainable ethanol true these, the was nice can whether for ago, a nice participate

a it's future. things on So build of you to to that its and just going last couple continuing in that announcements be played things lots stay the tuned, lot been out of of are years, hear segment still a we're lots of have in and out still

Ben Bienvenu

for profit which growth, guys are budget, could enough. we this in And about investments I ramp of to some CapEx associated operating the reasonable to the Brian, year? those from a start see out help fair should ask is what extent bucket can spending the if your CapEx, then Okay, you in projects? on the spending you timeframe

Brian Valentine

characterize million $XXX would And we time. to Yes, of the past; expect capital in been would maintenance would pipeline bucket in half a we coming the our I have of of $XXX range for ballpark million. our I in I how to growth. say, that to would XXXX, have sure, have rest and about be would over expect I of I similar in the kind Ben. spend projects that and category the online CapEx number backlog

So year layering latter years. positive and then had the you I that as those, about the a ones in into starting as get modeling and toward similar to way in to would think the you half we've contributing in previous of those XXXX, say see

Pat Bowe

the to conference baseball CapEx If being in and about singles a add growth of to that, use and on Ben, previous smaller can talked you analogy acquisitions. I midsize I And call doubles. we those asked about

to we our ingredients on is this in is business One past Farm center west. Indiana want two quarter. a the food in out well in pet farm a closed in spot as highlight Just Ohio Agri, Mote border, which as Bridge service Service, here sweet

As company you purchased remember previously, the the markets. dairy in we Ingredients southwest Capstone

are doubles immediately that these integrated been So providing the already singles these accretive, away. become acquisitions have have cash and and right

we're And this So make for a coming in lot others in sense bolt-on some of is us. with be pipeline the optimistic able close to this kind that of we'll those on that year. of

Brian Valentine

any And and $XXX and beyond million. bolt-on these be million similar $XXX would the to Ben, to clarify to acquisitions just above

million So top be our can million on then for be M&A capital to would and our the CapEx $XXX of investments $XXX facilities, that. and in maintenance capital growth up

Ben Bienvenu

laid which new markets dependent you continuation for in you out. thinking great. of to financial on And just of all to participate? Last is then how about SMB that level much Okay, around much EBITDA? one How of me, spend the that have type it a do to these get you goals

Brian Valentine

regard. they growth investments, internal just I our say of modeling of number be would kind so organic a side lead it balanced on cap also say and of and in that we out growth to kind reference it CapEx, as would mix at that the about we're those which business I now kind those the doubles. Yes, whether of of is thinking way in are look you we a singles and depending right could

our We we investments. maintaining our det-to-EBITDA to X.Xx existing fund have and of be in within plenty long our to balance capacity continue or able on to we stay to the term growth focused capital believe sheet structure, below

Pat Bowe

XX:XX. we things lumpy. estimate at want are comes like, our opportunities And debt deal capacity if the for to we would regard, current of and us. new as we verticals years, in lot But of capital in and you ethanol our But to right around, a plants bigger those something it core fertilizer elevators as a as But growth. call see keep know, it just the we're comes. or next grain for our Ben, make core ratio what's if strengthen of you called said, plants, when do And us. opportunity areas And it sense lines that that we to to our couple geographies businesses, we a mix, to make putting to want between have makes our balanced growth as over new as product sense and for that well that's said, Brian X.Xx

Operator

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

Eric Larson

Yes, guys. thanks, quarter Congratulations and year, well on a earned. fantastic

So congrats.

you just So just don't basis, for better guide of Pat, a question, second kind us, first know cadence not flavor, give I'm first quarterly. even bit guys can half that. little But my a I half. on the asking you

on back You had came us prices, end that first half, of you don't numbers think advantage we were it's again? good onset last later and a a half? board loaded loaded of able we contracts more Just because -- on the all how should in less give to in little be Or to us Would quickly know war little maybe year, in give increase the take modeling really fruition? Ukrainian some year. front how we for massive should a actually how help locked you how, end second the those

Pat Bowe

was mean, out right. when war ago, one year I Sure. it the February think I I about We're of coming broke the it. No, Essentially, XXth, exactly. up. think

talked very And just of so know this cetera. I really you this really concern well, year So has Eric engagement positions, But lot fertilizer as and fertilizer with markets about got about not grain weak a markets remember, Ethanol you initially, the it was earlier. weak. far. been et opposite we the situation crush we rocketing think quite have

So the is disappoint. first going quarter to

where going I think we'd behind to be. we're like be to

start I'll slow. out So

Second quarter, I'm quite optimistic.

So see good and plant And for opportunities I that I miles, shutdowns driving engagement grain with trade increase think the business. see ethanol margins fertilizer think we on there's we'll could hopefully turnaround.

didn't have with looked that We we Eric, carries know, -- wheat you are good. come as again, we have

a big have wheat We crop.

as we the talk harvest the summer, us we So be going third opportunities quarter, about in get cash there's And good into be will wheat good second, still I inverted think East. for merchandising when to grain. markets in

to we'll then start and quarter. first improvement weak get we second, another So quarter whole quarter, then Fourth see third an a right. crop

wait time we be good ago, like got we year, we thought that'd a the we back million So number. we on pace said I to years feel $XXX said million, But $XXX and said couple be can see. before still this great a

that really ethanol be on big lines like we'll take not last along change, a to or that to year, think would an peak at do I pace of pace So the fundamental make something of happen. just that that something

Eric Larson

good. Okay,

So diving that. into further a little

So the have one corn again the Belt. thing is this new that crop don't We you're any in going fall. have harvested the western positive Corn till to

great Belt can give help Good Are you continue? you that that? is a you there. basis And little harvest, of It's the us you've numbers Will feed are, Corn had lots? the some charts. to pretty just in amazing. off the Are West a these on Where year. the last western You to you got eastern corn Corn shipping Belt getting in the corn? corn being year

Pat Bowe

Yes, sure. Absolutely.

markets and One is points of active we're lines then expect surplus and to of a trucks and so a Eastern years, to further to lot our call deficit, business into of for last the of big these Kansas, the business what's from Nebraska Truck a us, product continue. business that's points a moving been that and but we That's good couple shortfalls. the a across areas grain us this we Texas very Oklahoma feedlot Midwest moving very Midwest for

are run located the Also, from the east corn rate operating our in good the well well, plants we've positioned ethanol So side. bases. positive that's perspective. on are on And plants with side, big a been positive

plant plants, there, have Colwich because that's western been the high know, levels as struggled Our difficult. really basis has you Kansas we newer of

some there. originally And been just of premiums California for those market haven't we the anticipated

also So well corn bad as Iowa quite difficult us, as it's but been not as has a basis, had Kansas. bit that's Denison for higher little as

of some opportunities have although that, with we Kansas smaller trading up for made we a has in have So plant, side negative our grain. had of that the

So that's as a profit our business, merchandising place for continue good ‘XX. far active to be we us and center that an to see in Midwest to be as

Eric Larson

Okay, next question.

fall conditions So conditions, some water the export really exports. difficult think bunch on we really restricted had a dry Mississippi last of low I levels, it

warming seen that come we we're up. all get Now China, in snowfall, here haven't we're to but China to Mississippi pretty going it's had replenished expecting back quickly. We've a lot of

and We rain up of yesterday. have half an here inch

of do the that think or Do barges? in out our you kind before help of corn back that next back comes see to you month we run – going more water Do that's that end. little the to a getting for Brazil the going to Mississippi Mississippi better to is to this level Or need the exports So think two?

Pat Bowe

a good No, point, you make Eric.

the get water normal we'll poor time I service think I challenges Mississippi. navigation year had At we year. really back last the major of more the the things. with to mean, from is upset those railroads pretty low kind mid last remember on same Miss

logistics improved was in has our a late market is rail improved, so so have question demand couple improved, for and enough which imports. in as crop barge industry has customers. navigation Chinese logistics last last the the logistic, you months, is difficult The year. conditions or rail have of a So improved. as here Interesting is big good all for the know, our Brazilian of corn thing Brazil, challenge approved

to late to kicked just we're come to be very Chinese We'd US back market drive the for Hopefully, can the will important to export that back demand. see this maybe bases program see So in. [inaudible] see that like we year. it really

freight too. side container actually improved has other The

by see we So shipments start to might container. some

concerned is is So just need ready the show the up. export customers markets as to see far to the US We serve. as

Eric Larson

Lakes still so out you lot the of shipping right Great Okay, are a now?

Pat Bowe

year think, not been record unusual. it's us for had, We good almost for really and Yes, a I volumes frozen, Lakes which by shipment led soybeans. is Great and

wheat So are, as Michigan, The well for well said Ohio, for Ontario be like soft big, crop as good, really big a year to as as and on were far the plantings economics so it's I Lakes, wheat. red going a delivery potential sounded wheat. year

comes situation to a for it the Andersons when The good So there's Lakes.

Eric Larson

obviously relates that margins in We or very like like another looks XX something US So substantially. is when in It for hog production demand numbers. give, an down How look back beef livestock. again. do look actually actually US controversy years overall question our the today. production we seems see maybe start And at we be the could here. total herd you that know terms of XX to of up It's feed. kicked this demand area at lowest livestock hog to could the It

Pat Bowe

high the there's far be first. a been it there, come grain off year. just a have season continue see see prices. you nail on well obviously demand. the we I as will and economics mean or in that again we've just right follow difficult really so come in that level, we this at sector as basic am lot with I consumer But hog of inflation, it hamburger could feed, as retail the back and by we as chicken going and an West to do demand will demand see chicken expert be Will change, eaters thus seen Yes, trim pork driving livestock But just barbecue to cattle the people

to West the drought way on think in see in to a in big in west. the going order be feed to have I is cattle relieved back this far

position an see I year. So but for that's as we tight United term, fundamentals take as as quite to a different But we're think this kind we're of feed some it in is States. as supplies economics know, far still the industry are cycles like here you to you that good long a while cattle going in a these feeding and turn said,

Eric Larson

February, farmers. insurance crop for crop -- of prices halfway we're the we're insurance so price are Okay, month in the discovery through for

good have thought, could you really for far be far compare better But will and do all going fourth do liquids that which second have the yields trying would --, Obviously, year, third second second focus this that quarter? you think too. than How that mean, to the prices maximize strong. farmers Farmers to is stack we so income. does next in have grain should probably had up So honestly, are this favorably are more we've on. your month I have your means quarters quarter? ones your to getting a you important, that obviously first your year-over-year had good, how pretty I

Pat Bowe

just and our that Right. in is who seed morning, through had you of to expensive year for show returns getting year. it's inputs Michigan still fact his spending we this interesting know. and one his how that per things this to in all town growers on returns but come I they Everything and hear farm that, met to highest last more his totally about on good And the acre said are, on you input the Louisville way true, big much in the breakfast being big cash

think maximize margins, yields. at for it's We're We We that's skyrocketing The year, they specialties. still as positive was late, shortage. last concerned to the remember think tight. you So really for and positive prices there was time, out, said, supplies were it's volume. a river because liquid about want were a

This getting about wholesalers and pressure not concerned more the all that's were prices. a of is farmers year, concern on So volume.

bit a the we margins I'm about spring season. So enter little concerned as

though volume could up our think be wholesale business. ag I

a that in was business. quarter consumer other The weak hurt thing fourth the us

fertilizer remain grower volume have do. like probably quarter, and too, Seeing some moderate side. We forget with products really Margins to we once should on how going fell producer left off and get just we which the back, victim discontinue cliff and inventories. lawn don't volume. as garden seen, the we're kind products And to a we were there. slow a we'll of that people do a of to rebound. to really about on the we that wholesale of so we write-downs that engage, had market return come which Eric. lot in be good So we excess a in in to the And consumer had some storage, took quickly the And a eliminate is a of

what cautious we're going button. don't We panic just to as margins. not, think I'm last on. that's So the I'm year's last good hard be to be hitting not be as we'll And year. top it'd

Eric Larson

Yes.

mean, I makes that Okay. sense.

tried $XXX out about farmer steps had think last some we're going have to down. average of support are I not fears. to government concern us But still per we year, still year. people And above to say, going disseminate kind mounds that farmer I've what returns I and of income mean, to the So on a income of look, generate, let's there's that acre, those the what for going is is profit this the of we're there lot be that's farm. forget

So the are to have going this farmers money year.

of with should concerns, should three concerns? your already on? headwind be mean, know, or right the could would it four quickly. year-over-year. cases I As But be down year above it highlighted in are or what though top be headwinds in all we well else that they we some and and good a now, But of that margins, can said, average, it'll top should we again you've farmer -- what things pretty your that being and substantially see fertilizer What you Pat, an eye terms obviously, a down change, even keep income some really change as

Pat Bowe

I think, the let's with positive start side.

this Brazil global continuing. high production As extended the -- And business about. be a productions talked tight we income just Ukraine I high backdrop had better. our the still prices; we that keeps good war, rains pretty commodity We've heels better, should is have on as so unfortunately trend Because been of excited. mentioned, commodity gotten have they've farmer they’ve you gotten

happen see little what's a going bigger crop, on to So demand. to with China waiting

what's it little than has diesel weaker a though, And that's a still backdrop, happening that renewable been there. ethanol to And term growth going helpful. pretty near This industry. positive. watch impact we'll is is So big The be on was a demand ago. year

exports strong. as feed on ends still attractive customers on have global our scale. food the see fuel And both a an on still and we we and broad think very sides still I

general, in last continues at the industry fervor we in already. the I to strong. just where so trend others overall heard be started our had year think tight So we out from We you've feel and but not pace optimistic,

Eric Larson

soft Give a question. particularly varieties. did tell, your been generally you in Wheat we And us, wheat. one at Okay, wheat wheat do favorable looking particularly have get how the guys, good quick for final merchandising year? rundown Belt? crop business spring, year? the much should big last has wheat Corn a us Give you Are look this how for we the Do should plantings you eastern in storage? how on

Pat Bowe

points, your volumes Eric. off the have a numbers exact we higher I just strong wheat year But don't Yes, good than head. the and top know ago. answer storage is had my that we

We have year a Wheat than did we wider on Board the carries ago.

and Ontario far Michigan shape in be soft looks year in to winter as We and all look Canada, so red kill. crop Ohio have we ago well higher a in dry as which to big area no be and is province conditions on good did plantings than wheat, our

in Gulf we're a hopefully program and we'll wheat shape at that have help soft good involved is US market, isn't overall a wheat will we global world. our parts export have isn't And still red Texas still of expecting wheat exports global in factoring wheat And that income. export can into out the trade. higher good trade grid, wheat hard participate especially production. We carriers the wheat the a of year. in in the with this all really, we're export Russia So in the wheat wheat dominating with soft US

wheat. we're Even it calmer relatively for on bottom to little So source prices are going though a or corn comes ANDE. to a when It's wheat be soybeans. bit line, income bullish than good

Eric Larson

so prepared than your Okay, Brian. RMI final one is Brian, comments, question short said in of term debt. your higher you and for all

a You and you two balance have really liquefied years here, guys sheet dramatically. guys last got great

do bonds. front balance in me you're of -- for with So what sheet, prioritize to obviously, bull some going the

small fairly buybacks. share some had You've

all what's -- how now? mean, that I dividends. your priority the for generating got you're You've cash right

Brian Valentine

execute with it invest our approach, good say expect said program. to projects continues I utilize that and that help growth you I repurchase and would that $XXX us that good would will Yes, the time, would balanced we have under bolt-on to million preference would progress it, goal by ‘XX. toward continue to in a At acquisitions make just share to solid continue the be say same started us program to we've I first

it dividend continue projects a prioritize big consecutive and to solid As public that of company special shareholders. return has growth as paid some But balanced or with and wouldn't to I quarters, to that. approach very now we've that over us logical just take call don't makes I been would to know, the probably approach would to returns enables sense anticipate XXX a and anything balanced but I hopefully like any dividend as good, us kind a expect say for a long

Operator

session. Mike to to will any With answer back like over the closing no I'd questions, conclude for turn question Hoelter and this remaining our conference remarks.

Mike Hoelter

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

XXXX AM when scheduled XX call earnings May first next our Time X, at is we for will results. review conference Our quarter Wednesday, Eastern

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

Operator

The now conference is you for concluded. presentation. today’s very much Thank attending

You now may your lines. disconnect

The Andersons, Inc. (ANDE) 15 Feb 232022 Q4 Earnings call transcript