Good morning, everyone, and welcome to the Darling International conference call to discuss the company's fiscal fourth quarter and full year 2012 financial results. With us today are Mr. Randall Stuewe, Chairman and Chief Executive Officer of Darling International; and Mr. Colin Stevenson, Executive Vice President and Chief Financial Officer. [Operator Instructions] This call is being recorded and your participation implies consent to our recording this call. If you do not agree to these terms, simply drop off the line. I would now like to turn the call over to Mrs. Melissa Gaither, Director of Investor Relations for Darling International. Please, go ahead.

Thank you, Sue. Good morning, everyone. Thank you for joining us to review Darling's fourth quarter and fiscal 2012 earnings results. Randy Stuewe, our Chairman and CEO, will begin today's call with an overview of our fourth quarter and full year financial performance and discuss some of the trends that impacted our results. Colin Stevenson, Executive Vice President and Chief Financial Officer, will then provide you with additional details about our financial results. Randy will conclude the prepared portion of the call with some general remarks about the business, after which time, we will be happy to answer your questions. Before we begin, I need to remind everyone that this conference call will contain certain forward-looking statements regarding the business of operations of Darling and the industry in which it operates. These statements are identified by words such as may, will, begin, look forward, expect, believe, intend, anticipate, should, estimate, continue, momentum and other words referring to events to occur in the future. These statements reflect Darling's current view of future events and are based on its assessment of and are subject to a variety of risks and uncertainties beyond its control, including disturbances in world financial credit, commodities, stock markets and climate conditions; a decline in consumer confidence and discretionary spending; the general performance of the U.S. and global economy; global demands for biofuels and grain and oil seed commodities, which have exhibited volatility and can impact the costs of feed for cattle, hogs and poultry, thus affecting available rendering feedstocks; risks including future expenditures relating to Darling's joint venture with Valero Energy Corporation to construct and complete a renewable diesel plant in Norco, Louisiana; and possible difficulties completing and obtaining operation viability with the plant on a timely basis, or at all; risks relating to possible third-party claims of intellectual property infringement; risks associated with the development of competitive resources for alternative renewable diesel or comparable fuels; challenges associated with the company's ongoing enterprise resource planning project; economic disruptions resulting from the European debt crisis; and continued or escalated conflict in the Middle East, each of which would cause actual results to differ materially from those projected in those forward-looking statements. Other risks and uncertainties regarding Darling, it's business and the industry in which it operates, are referenced from time to time in the company's filings with the Securities and Exchange Commission. Darling is under no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. With that, I would like to turn the call over to Randy.

Thanks, Melissa. Good morning, everyone, and thanks for joining us. It's my pleasure to welcome you to the Darling International earnings call to discuss our financial results for our company's fourth quarter and the fiscal year that just ended. We closed the books on another strong year for the company, the second best in our 130-year history. Overall, both operating segments delivered strong results, although earnings performance, when compared to 2011, was marginally lower. This was largely driven by lower finished product prices in our nonformula rendering segment and by slightly lower volumes in our Bakery segment. Let's look at our key market drivers and the coinciding forces that impacted our results. Throughout the year and into the fourth quarter, finished product markets remained highly volatile and inconsistent with historical relationships as we saw the global feed grains and oilseed markets touch record highs. These traditional trading relationships came under pressure due to trade restrictions in Indonesia on meat and bone mill and for the fats and greases, a growing supply of ethanol-generated inedible corn oil, rising stocks of palm oil, fulfillment of the RFS2 mandate for biomass-based diesel and overall sluggish exports predominantly to Europe. Taking a look at the fourth quarter, in particular, sales were significantly impacted by more than a 12% drop in fat prices versus the third quarter. The drop was partially offset by a slight increase in pet food grade poultry meal and an improvement in California protein prices, but very late in the quarter. Fortunately, we have seen both the fats and protein markets rebound nicely here in the first quarter, part of 2013. From a volume perspective, our Rendering segment experienced modestly lower volumes during the fourth quarter, reflecting both the slowing in slaughter and the corresponding and typical holiday downtimes. Within the…

Thanks, Randy. For the fourth quarter, the company reported net sales of $424.9 million, compared to $430.9 million in the year ago period. The $6 million decrease in sales primarily resulted from lower selling prices for our finished products as compared to 2011. As Randy mentioned, on a sequential basis from the third quarter, 2012 fat prices declined more than 12%, primarily due to reduced global biodiesel demand and an increase in supply of competing fats for animal feeds. This decline was partially offset by an increase in pet food grade poultry meal and improved California protein prices. Net income for the fiscal 2012 fourth quarter was $28.8 million or $0.24 per share on a fully diluted basis as compared to net income of $29.5 million or $0.25 per share for the 2011 comparable period. As noted in our press release, the $700,000 decrease in net income for the fourth quarter resulted primarily from lower raw material volumes as a result of weaker slaughter and processor rates during late 2012; lower finished fat prices, which impacted margins in our nonformula business; and the 2011 impact of a $2.1 million gain related to the 2011 fourth quarter purchase accounting contingency that did not reoccur in the 2012 fourth quarter. At the segment level, rendering generated net sales of $344.1 million for the fourth quarter as compared to $360.7 million in the fourth quarter of 2011. Bakery segment sales contributed $80.8 million to the fourth quarter, compared to $70.2 million in the year ago period, primarily due to higher commodity market prices and improved volumes during Q4. Now turning to our results for the full year ended December 29, 2012. Darling reported net sales of $1.701 billion as compared to $1.797 billion during fiscal 2011. The $95.8 million decrease in sales primarily…

Thanks, Colin. As we've attempted to portray, we successfully managed through an unusual fourth quarter commodity market disconnect and for the most part, our formulas worked. Our operations teams executed well and we are well prepared for the work ahead to take advantage of our entry into the renewables fuels business. We proved out the resiliency of our business model, we maintained solid cost management and we've got a robust balance sheet and capital structure now to service our customers and continue to improve our returns for our shareholders. The changes and challenges we face this year require a tremendous commitment and flexibility from our entire staff, and I'd like to thank each of them for putting up the second best year in our 130-year history. With that, I'd like to now open it up to Q&A. Thanks.

[Operator Instructions] Our first question comes from Farha Aslam.

A question, Randy, on what your volume expectations are for 2013 on both rendering, as well as bakery?

Okay. Well, I mean, we're obviously 60 days pretty much completed of the new year here. The bakery side, real easy to discuss here. It's above where we were a year ago, at this time, as we had some commercial bakery downtime there. So bakery has been a continuation of a pretty solid volume, probably even a little above what you expect in the first quarter. So that's rolling forward pretty nicely. The Rendering segment, which we would comprise as the fat and bone collection and the grease collection business. For the most part, that volume is rolling pretty nicely right now. The cattle slaughter, as everyone knows, backed off a little bit, but the -- this time of year, we've had a pretty good amount of debts coming in with the winter weather. And then the poultry side feels like it is poised to improve. And the check and balance there is watching both the retail and the food service consumption levels of meat. And so we're watching our poultry processing locations do pretty darn good for the first quarter, our beef plants are hanging in there pretty nicely. That all said, I think, Farha, it's kind of safe to say that I'm uncertain of what the back half of the year is on cattle supply. Packer margins are pretty challenged right now. We saw Cargill shut down Plainview in fourth quarter. Hopefully, that will take some margin pressure off the packer side, but that's not what I would say is a real rosy picture. For Darling, though, to the most part, we don't have a lot of business with the integrated packers. We support some of the smaller niche players. And for the most part, those guys are doing pretty darn good in running at expected levels. The…

Great. And then on Diamond Green Diesel, Randy, could you just share with us your ramp up plans for Diamond Green Diesel in a little bit more detail, as well as when you expect it to be kind of fully up and running?

Yes. I mean, I think that's a fairly fluid situation. I think we did lose a little bit of time here in the fourth quarter and in January with some pretty significant rain and wet weather down there. We're in that final phase of electrical and instrumentation and heat tracing and putting the insulation on the pipes. It has to be done when it's dry. So I think for the most part, we fell a little bit out of first quarter here, where we thought we would be starting up. We're anticipating, given the schedules that I've been part of and reviewing. We will complete mechanical completion here sometime late in the first quarter, early in the first quarter or second quarter on the different pieces and then begin a phased start up here in mid to late April. And I think it's too early to tell what kind or time frame the commissioning would be, but I think if you talk to the operations team that we have the highest confidence in, they would suggest to you that by third quarter, we should be up and rolling pretty nicely.

Okay. So really, third quarter, you could be up kind of at 100% of capacity?

Yes. If all goes well, that would be the plan. I mean, the ability to keep the machine turned down is very challenging. At the end of the day, it's going to work or it's not going to work, and that will be up or down. And so I think you'll see some production in May at some point in time, and then I think you'll to see a little more production in June, and then hopefully by July, we'll be up and have some of the kinks and bottlenecks out. It's a fairly complicated, very large facility, but at the end of the day, that would be the hopes of the operating team.

The next question comes from John Quealy of Canaccord Genuity.

First, on the fat side. Randy, can you give us a little geography tour, especially in the export market? I know some fats rebounded here in the early part of the year, but can we talk about Mexican exposure? Is that cheaper than normal West Coast, East Coast? Can you just give us a little lay of the land about fats by region?

Yes. I mean, for the most part, I mean, the west -- exports have been very, very slow. I mean, year-over-year, you kind of have to look back to Europe as being an importer of used cooking oil. I mean, I think if you follow the trade rags out there and anything, you're seeing that as Europe modifies their biofuel programs away from crop-based fuels, essentially, that's your decoder ring says that's for protecting the rapeseed farmer over there. So we don't see much hope of material going into Europe anytime soon. From a standpoint, the biggest impact, John, when you step back from this thing, and we spent a lot of time internally discussing it, we've got a couple -- 3 or 4 things that kind of created what may be, the euphemism, the perfect storm. But the #1 issue for us has been the amount of corn oil that the ethanol industry has generated in 2012. As they've learned to use enzymes in centrifugal separations to improve their yields, we've seen that business go from 0.5 billion pounds to 1 billion to 1.5 billion pounds to really, no tracking out there, somewhere between 1.5 billion and 2 billion pounds. It’s a high asset product, 10% to 14% asset. And it competes directly for the feed fat formulations that our fats used to go into. So we had 2 people competing for 1 pound of business, number one. Number two, the feed industry, much as we've talked or the animal production industry, which then translates to feed industry, always begins to look at alternatives when there's extreme volatility in one of their inputs. In this case, as fats moved around in 2011 and 2012, the industry has moved and started to use a lot of different enzymes into the feed rations. That reduced the need for energy derived from a calorie of fats. So to explain that, I can't do anymore than I did. It's a developing situation. But at the end of the day, we're not sure how much impact it's had, but we're certain it's had some. And that's explained by the amount of discount we are on a caloric basis to a bushel of corn today. Exports, drying up. I mean, the amount of corn or the fats that went to Europe, we lost about 0.5 billion pounds that was being exported to Europe that's backed up here in the country. All of this is good for Diamond Green Diesel. And obviously, as we've looked at the economics, it's certainly something that we wished the plant was running every day, not only from a new demand point but from a margin point. But overall, the West Coast was weaker than the Midwest. Just certainly less animals to feed out there. And when you don't have exports, you got to move against the grain.

Yes, that's fine. And then dive into corn oil a little bit for us. Obviously, we've got a fair amount of Gen 1 ethanol capacity, mothball tier, given our FS-2 blend wall issues. Talk about -- is corn oil keeping pace? Is it still oversupplied, given, I know some people put on trains and some litigations so it moved along to increased corn oil penetration a little bit?

Yes. I mean, at the end of the day, corn oil is here to stay. I mean, an ethanol plant that doesn't have that recovery process in place is probably one that won't be here very long. We've seen the ethanol grind pick up over the last couple of weeks. It's still lagging a little bit from a demand point that the USDA thinks they've got to achieve to hit the use numbers they projected this year. But for the most part, you're back up running at pretty high rates. We've seen the amount of coin oil available in the marketplace. And for the most part, we've wanted the uses of our investment in Muscatine, Iowa that we made in third quarter. It has been to use that as a corn oil terminal and an origination source point for Diamond Green Diesel.

And then the last question, Randy. On Diamond Green, talk about the supply metrics a little bit in terms of the raws. Have you got a good vision of securing that? Does it have to get secured a few weeks after mechanical completion? And I guess, my point is, does that help firm fat prices as you're out of the market now buying for that facility? I'm trying to understand that relationship.

Well, that would make both of us trying to understand what's going to happen. There's a myriad of bets around the table of what will happen here. First thing is, we have really not turned the machine on down there, so we've not turned our machine towards it yet. Our procurement team and commercial manager down there did enter the market in December for a little bit when corn oil and yellow grease got really cheap there and procured just a little bit a few days of production, and we watched the market bounce $0.02 or $0.03 a pound in a few hours. So we have not started that up. That is under discussion. I think you'll see us start to turn the supply line in that direction here as we approach March and into early April. And really, it's just trying to now, trying to figure out what -- we know which plants are going to head there, but we're trying to get the supply chain in a reasonable fashion, ahead of that direction shortly. So at the end of the day, I don't think, from my vantage point, the marketplace has not felt the impact of the giant demand that's about to happen down there.

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

Can -- I guess, I have 3 questions. Can you talk about the biodiesel credit? And how much it's benefited to you? And how you think it is going play out?

So that's question one, all right. Number one, the tax credit came back into play here. And then our wonderful government obviously, made it retroactive to the production in '12, too, which is astounding in itself. But at the end of the day, when we've talked about the basic economics of Diamond Green Diesel, you've always talked -- we've talked to you about road fuel at the ultra-low sulfur diesel level. And then we've talked to you about the Green Premium, that was a combination of either the RIN value or tax credit and RIN value in order to drive economics that would -- were favorable enough to incent production. So at the end of the day, if you look back a year ago, we had RINs up there $1.20, $1.30, $1.40, whatever the number was and now you got RINs at $0.50 or $0.60, but you got $1 a gallon. So at the end of the day, it's one offsetting the other. It's actually today, in a sense from an economic perspective, a little more favorable for us with the $1 a gallon in there today. It would be amiss for me to say we're a supporter of $1 a gallon because we're not. We would just as soon see that go away and compete at the production level mandate level.

Okay. Is there anything you could do on the step side and to reverse the trends on the grease side?

What's that again in a different way, please?

The theft on the grease?

Oh, the theft.

Yes. To what extent can you reverse that? I mean, are you making any progress? I mean, I think you've been talking about this for quite a while. I'm just trying to figure out, is there a point in time that you would see an inflection point in that?

I think we're seeing it right now. And from the standpoint that we've watched our volume, from a collection perspective, bottom out. A couple of things. Number one, the margins in the grease collection business got extremely attractive in 2011. That's code for they got too good. In 2012, it became the only feedstock that some of these smaller biofuel producers could convert into biodiesel. So there became a new demand point for a market for a product and yet, then I would then say not to accuse anybody, it became a liquidity point for an unscrupulous theft process to go out there and take product and deliver it into the biofuel market.

Okay. Sorry? Okay. And then my last question is in terms of the profitability of the JV, again, just from a modeling point of view, will the second quarter be actually a loss as you ramp up? I mean, will we see a loss in there? Or will we just see the beginning of the profit in the third quarter? How -- just help us out from a modeling standpoint.

Yes. I think it would be fair to say that there will be a small operating loss with -- from a startup perspective. So John, do you have any comments?

Yes. Looking at P&L, Ken, we've been running -- the losses there are running at about $600,000 a month and that's with full start up costs and everything, and you're seeing that reflected in the P&L. That comes over onto our P&L. That's fully staffed today. The only thing you don't have is the hydrogen costs that will kick in and everything gearing to start up. So for the first few months of this year, you're likely to continue to look at what you've been seeing for the last couple of quarters on that. You could plan on that until we start commissioning the equipment and then the costs will increase a little bit there.

Okay. So nothing we shouldn't really be modeling much as a loss? It's not a big deal?

No, it's not material.

Okay. That's all right. I just wanted to make sure.

It's already been built in, as John said, because the laborers, we're fully staffed and essentially, if you will, operating today at a sense without production.

The next question comes from William Bremer of Maxim Group.

First question, as we look into the back half of '13, is there a potential that Diamond Green Diesel truly is at full capacity? Or are we going to start seeing it slowly integrate? I guess, my main question is the ramp up. Let's just say we are good for this April time frame. From that time frame to the end of the year, how do I think about that ramp up?

Well, if we're a successful team, I would tell you to think 137 million gallons divide it by 12 and multiply it times 6, and that will be pretty much what we're shooting for from a budgetary standpoint around here.

All right, all systems go. I got you. All right, Colin, maybe if you could just provide a little help there in terms of number one, the CapEx, as we look for '13 as this plant is starting to finish down?

Yes. Well, I think our CapEx expectations for 2013 are right at $100 million.

Okay. And I guess for the last question, SG&A pretty much stays at this level since we're fully staffed going forward. No real surprises there then?

Bill, let's clear that up a little bit. CapEx -- the amount of money that we're required or that we believe will be funded from a cash perspective in the Diamond Green Diesel between now and the 1st of June is probably about $44 million. And that's aside from our normal CapEx and maintenance programs to run the company.

Okay, got you. Okay. So that's an addition then to the $100 million that Colin just mentioned?

Yes. That $44 million is into the joint venture, the $100 million is what we're anticipating our CapEx programs for plant improvements and some other projects we have underway in the business today. And that includes a significant portion for our computer system upgrade.

Okay, the update, got you. And then finally, the final question is just the overall tax rate that you will be utilizing for '13. Does this really change things in any way?

Yes. You're going to need to increase the tax rate for 2013. And I'll try to give a brief explanation of why. With Diamond green coming on, we will get our share of bonus depreciation from the equipment that will be placed in service. That will dramatically reduce our cash tax, but it will also significantly reduce the benefit of the section 199 production activities deduction. And that has an inverse effect, if you will, to your overall tax rate. So from a tax rate modeling perspective for 2013, I would use 38.4%.

The next question comes from JinMing Liu of Ardour Capital.

My question -- most of my question has been answered, just one last in there. Randy, can you share with us how big is your West Coast operation compared with you overall business? Because, I mean, to put in price stay low over there.

Typically, I wouldn't break that out, but at the end of the day, it's about -- we operate plants in Los Angeles, Fresno, Central Valley, Turlock, San Francisco and then on up to Seattle, Tacoma. So there's 5 operations out of our approximately 50 operations that are out there. It represents roughly about 15% to 18% of our total production is on the West Coast.

The next question comes from Dan Mannes of Avondale.

A couple of quick follow-ups. First, as it relates to the RIN market and biodiesel broadly, we obviously saw the increase in the biodiesel or the biomass-based diesel mandate, but I was wondering when taking into account, number one, the tax credit, but two, the potential for biodiesel to meet the advanced? I mean, how do you sort of view biodiesel or biomass-based diesel demand for '13 given the parameters I mentioned? And how do you think that plays out from a RIN perspective?

Well, I mean, I think a couple of things, Dan. And number one, I'm going to probably pontificate and guess about as much as you are on it. I mean, from the standpoint of 2012, obviously, we'll fulfill the mandate there in late -- early -- late September, early October. And then we saw a significant ramp down of that industry. The good news is, is that we came into the year probably not carrying forward a lot of reductions, other than people that had a crystal ball that knew they were going to get the $1 a gallon on a retro basis, which I'm not sure would've been a prudent way to run your business. And so at the end of the day, I think you got to produce pretty sharply here, the 1.28 billion gallons. And you'll see that with the $1 a gallon most likely is going to expire at the end of 2013 and not be renewed. You're going to see, possibly, an overproduction this year carrying forward into '14 as the $1 a gallon is still there. I think you'll see a pretty solid run rate that may be longer this year than it was last year. And then from our perspective, we're hopeful that the biomass-based diesel volumes move up to 1.6 billion minimum to 2 billion would be our dream. And that will provide additional support and then also, the ability of our product to fulfill the advanced biofuel mandate that's out there. And I mean, we've already seen RINs go to near parity there now. So it's a pretty interesting dynamic that's pretty friendly, our situation.

Okay, real quick. Just a couple of quick follow-ups on other topics. First, on the Bakery business. Can you just remind us of the seasonality in the business? Because from a pricing perspective, obviously, corn is still pretty strong and Q1 should fare well. But if I remember, there's also some seasonality in that, which certainly impacted the first quarter of last year. And I just wanted to make sure that was -- that we're accounting for that correctly.

Yes. Typically, it's first and fourth are your weaker quarters there as you come into barbecue season and picnic season and state fair season. And what -- last year, like I said, we still, today, cannot explain the volume decline that happened to us the first 5 months of the year. Probably, the most subscribed to theory that exists around here is that the wheat markets, sugar markets and vegetable oil markets were all severely inverted last year, believing that we'd have a better crop coming on, so there was truly an economic incentive to pull down stocks and replenish with cheaper ingredients. Plus you had the Kraft breakup. And Kraft is a significant portion of our -- not significant, but they are a pretty good portion of our tonnage in different plants. And when Food co. and Snack Co. were broke apart, there was some of the Kraft bakeries went down for 2 to 3 weeks at a time there, and then ramped up slowly. So what we've seen out, as I described early on, we've seen in the first quarter here, volumes holding at or above fourth quarter levels right now, which is much higher than last year and probably higher than seasonally we've seen in the past here, which is probably more of an indication of a robust economy than anything right now.

Sounds good. Two more quick ones. One, on SG&A on the corporate level, I think you were about $39 million in the fourth quarter. Is that a decent run rate for '13 including the ERP implementation? Or do you expect that to be maybe tap down a little bit?

No. Actually with the ERP coming on in as we move from the cap phase to starting new expense, with the consulting support we're getting from that plus the folks we're adding to our IT group, I think from a 2013 quarterly perspective, you would want to model something closer to $42 million.

Wow. Okay. And then one last thing, on the sequester, we've obviously heard some dialogue about the USDA budget and its potential to meat packers. Have you guys started feeling anything of that or do you have any thoughts about -- if there's sort of a flow-through impact to you from a volume perspective?

Dan, the only thing that I can answer there is when I ask the question, I get complete denial that, that could happen. That there's just, while it would seem to be something that obviously needs to be discussed and faced, the packers just don't believe that they're going to lose the inspectors and the funding there, and it'll just keep rolling as it does.

The next question comes from Roman Kuznetzov of Gates Capital Markets.

It's actually Jeff. I was just looking at the budget for Diamond Green Diesel. I think if I did the math right, you're about 4 40, which is a little higher than you expected. So what was the extra capital? Does that include all the working capital? And then secondly, can you talk more generally about the capital deployment opportunities that you're seeing?

Jeff, first off, I mean, we've had a little bit of capital creep there, not much, at the end of the day. On the project there, there's been a few items as you get to the end that cost a little more and stuff there. But at the end of the day, most of the working capital assumptions are in there. It depends on where fat prices will be. And then at the end of the day, the little, if you will, if you want to call it a protracted start up here, you get a little more capitalized interest in there creep in the price just a little bit. So not far off from where we thought it would be. So very pleased there. From a capital deployment perspective, we completed 2012 with a lot of modernizations and expansions at several of our plants across the country. We picked up some additional raw material around the country that hopefully will pay dividends this year for us. We've got a pretty aggressive capital program next year for some Midwest modernizations that we're going to do. And from that standpoint, when we model the business going forward, and given the cash benefit that the accelerated depreciation off at Diamond Green Diesel may give us, we're going to be, provided that the industry and the earnings kind of turn out as anticipated here going forward. We're going to have a substantial amount of cash again on the balance sheet. Met with the board again, obviously, kind of regurgitating the same discussion we've had in the past. They want to get Diamond Green Diesel start up and make sure that the technology works and that there aren't any major issues there. I think we're very confident, at least in this room that the team down there is nearing completion and there aren't those surprises. The second thing is, is then that the board's evaluating at that time, are there additional opportunities to grow? It's always a new year. As you know, the investment bankers all make rounds in the first quarter and they're all looking for opportunities. Hopefully, we'll see some opportunities this year to put the cash into play through acquisitions and growth. And then if we don't see that, then I think the board is at the point where they'll either evaluate a buyback or start to put a dividend as you've always requested underneath the business.

The next question comes from Tyson Bauer of KC Capital.

Randy, you made a comment earlier in your presentation that the market still doesn't fully understand the demand implication on DDG once we start pulling that volume out of the marketplace. Have you, with these delays, started to fill up your supply tank farm in Louisiana? And are you any closer to trying to predict what kind of or gauge the price impact once you do start full production?

The answer is yes. The tank farm and the rail unloading system is operational at the Diamond Green Diesel. It was commissioned in late December and yes, we've unloaded not a material amount with the machine that we're using. We used, what, 3 million pounds a day down there. We've got probably less than a week down there than right now in position in order to fulfill. So when I make the statement, we've not felt the impact. We've really not turned to stick it on. Like I said, there's a lot of different opinions around here, Tyson, given the amount of corn oil to what impact we will have on that situation. I think it's safe to say that if the animal slaughter on the beef side gears back, beef -- you're already seeing tallow prices improve. You got those back to 42 now. You've got the yellow grease and cooking oil prices back into the high 30s, maybe touching on 40 in different geographies. And yes, corn oil still sits out there. And as long as the ethanol industry is going to run strong this year, which it would certainly look it's going to, I think we'll just see where it goes. I mean, we've always factored in some price creep relative to traditional spreads there, but that was before the amount of corn oil was there. So time will tell. We'll place a bet with you here in 60 days and see how we do.

All right. In '12, we kind of fell out of bed with our typical grain complex relationships with your products with corn, soybean oil, palm oil, some of the others due to various factors. Given that situation that we just experienced, is it more beneficial than this go round if we do see 99 million acres of corn being planted that we actually do see some leveling off or reduction in some of those grain prices just to spur more protein volume in the marketplace, especially in the poultry side?

It's kind of a whack-a-mole thing where you sit there and you push once and it pops up over here. I mean, obviously, if you look at the USDA numbers and you see the amount of -- if you can have normal weather and normal productions, you've got pretty significant crops, which should help the animal production industry. I mean, the first thing that would come back is poultry. The second thing would be the hog market. And then the longer growth animals on the beef side. So yes, I think we've hit that inflection point of probably the lowest amount of animals in this country, and so that side should start growing. Protein demand around the world continues to be tremendous. When I say protein, consumer proteins. And then feed grade proteins continue to be in high demand. I mean, to a degree, while we may have bigger grain crops coming on, on the other side is all of a sudden the fish harvest again was reduced. And then we've seen fishmeal prices rocket on up. The corresponding effect now has been that the pet food guys have come rolling in, trying to make -- secure their supplies of pet grade products for this year. And then the aquaculture guys are now already starting to sniff around and look for, what I would call, late in the year seasonal demand bringing it much earlier this year. So pretty bullish, the pet food side complex of our business, the beef side will compete with soybean meal. It got completely out of whack and what drove it out of sync here was the export demand from the Indonesian market. That was our largest and most sophisticated market for the Darling system, and we've been excluded from it. But in return, the markets are efficient and the surrounding Asian countries now have started to bring in a lot of material and take some of that pressure off. And thus you've seen meat and bone meal rebound nearly $100 a ton for us around the system, just on a little tiny bit slaughter rate but finally some more demand around the world because we had saturated the amount of poultry you could feed it to here in the U.S. during 2012. So overall, the complex feels pretty good. It's going to take its lead from the soy complex. The markets, from my perspective, are always anticipating. There's probably still a little bit of risk premium in there, given that we're going to need to add good moisture this year. But I'm sure you've got to use your snowblower this week up in Kansas City. The moisture is certainly more this time of year than it was last year.

And the last quick one for me. Your Florida plant, you had to rework some of the technology there. You're going to test that again this summer. What are the implications there? And you do have that capital deployment there that you can use organically. Where do we stand and what are some the benchmark dates and results that we should be watching?

The plant in Hampton, Florida is one that has been a dream of the operations and engineering group. As we look for different ways to recover waste streams that are currently being land applied today or put into other streams that they're not recovering the full value from. The technology in Hampton, from continued RINs this year, continues to prove itself out. We're optimistic that we are on to something. And that the products produced from the process are a value that we need to make it a successful operation. There is some more equipment that's ordered in order to get us into the compliance and the efficiencies that we need that we'll be putting in later this spring, early summer. And then we anticipate coming on stream with that unit, hopefully, towards the end of the summer here and get a level of comfort that we can operate at the economics that we've anticipated. And then from there, we'll develop a business plan for additional applications from recovery of other waste streams, whether it's wastewater or other protein streams produced by the meatpacking industry.

We have reached our allotted time. Therefore, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Stuewe for any closing remarks.

All right. Thanks, Sue. I appreciate everyone joining us and we look forward to catching up with you here believe in May and give you our first quarter results. Thanks again.

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