Welcome to the Hormel Foods first quarter earnings conference call on 18th of February 2010. Throughout today’s recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator instructions) I would now hand the conference over to Kevin Jones. Please go ahead, sir.

Good morning everyone. Welcome to the Hormel Foods conference call for the first quarter of fiscal 2010. We released our results this morning before the market opened around 6:30 a.m. Central Time. If you did not receive a copy of the release, you can find it on our Web site at www.hormelfoods.com under the Investors section. On our call today is Jeff Ettinger, Chairman of the Board, President and Chief Executive Officer; and Jody Feragen, Senior Vice President and Chief Financial Officer. Jeff will provide a review of the operating results for the quarter. Then Jody will provide detailed financial results for the quarter. The line will be open for questions following Jody’s remarks. An audio replay of this call will be available beginning at 10:30 a.m. Central Time today, February 18, 2010. The dial-in number is 800-406-7325 and the access code is 4198205. It will also be posted to our Web site and archived for one year. Before we get started with the results of the quarter, I need to reference the Safe Harbor statement. Some of the comments made today will be forward looking and are made under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed in or implied by the statements we will be making. Among the factors that may affect the operating results of the company are fluctuations in the cost and availability of raw materials and market conditions for finished products. Please refer to pages 30 through 35 in the company’s annual report for the fiscal year ended October 25, 2009 for more details. It can be accessed on our Web site. Now I’ll turn the call over to Jeff.

Good morning everyone. We got off to a great start in the first quarter. We had record earnings, up 37% from a year ago, including double-digit profit gains from four out of our five business segments. We are particularly glad they’ve registered a dollar sales gain of 2%, which is a significant turnaround from our fourth quarter last year. Our recent announcement of our new Hormel brand advertising campaign demonstrates our commitment to building our brand strength across both our grocery products and meat products product line. The aim of this new campaign is to create synergies across all of our 15% categories in which the Hormel brand is a major players. I will now take you through each of our operating segments. For grocery products, segment profit increased a substantial 37%. Segment profit was aided by lower raw material costs and increased revenues of our core products. Our grocery products segment reported a dollar sales increase of 8%, up 4% netting out the impact of the new MegaMex sales and the discontinued Carapelli olive oil sales. Sales of Hormel chili, our SPAM family of products and Dinty Moore stews were all up nicely on top of double-digit gains a year ago. We are already seeing the benefit of our MegaMex venture to sales and earnings. The added sales of Mexican products under this venture more than compensated for the discontinued Carapelli olive oil sales. We were encouraged to see stabilization in sales of our Hormel Compleats microwave meals line during the quarter. We recently opened our new plant in Dubuque, Iowa, and we look to that state-of-the-art facility to meet our long-term growth expectations for this product line. Our refrigerated foods segment reported a 53% increase in operating profit, helped in part by favorable cut out margins. We may…

Thank you, Jeff. Good morning everyone. Earnings for the fiscal 2010 first quarter totaled $111.2 million or $0.82 per share compared to $81.4 million or $0.60 per share a year ago. Dollar sales for the first quarter totaled $1.73 billion compared to $1.69 billion last year, a 2% increase. Volume for the first quarter was 1.2 billion pounds, up 3% from fiscal 2009. Selling, general and administrative expenses in the first quarter were 8.4% of sales, even with last year. Advertising expenses were 1.4% of sales for the quarter compared to 1.5% in 2009. We expect a year-over-year increase in advertising expenses in 2010, primarily related to the brand campaign Jeff referred to. Interest and investment income was $443,000 for the first quarter, compared to $2.4 million in fiscal 2009. The majority of the difference is due to lower returns on our rabbi trust investment as well as lower interest income. As Jeff indicated, we expect to see lower comparable results for interest and investment income for the balance of fiscal 2010. If you remember, our 2009 result for the quarters two through four included a gain of $3.6 million on the sale of the Carapelli business and a total of about $14 million in gain from our rabbi trust investment. Interest expense for the quarter was $6.6 million compared to $7.5 million last year. We expect interest expense to be about $27 million to $29 million for fiscal 2010. Our effective tax rate in the first quarter was 33.8% versus 34.5% in fiscal 2009. For fiscal 2010, we expect the effective tax rate to be between 35% and 36%. The basic weighted average number of shares outstanding for the first quarter was a 134 million. The diluted weighted average number of shares outstanding for the first quarter was 135 million shares. We repurchased 421,000 shares of common stock during the first quarter, and we have 697,000 shares remaining to be purchased from the 10 million share authorization in place. Total long-term debt at the end of the quarter was $350 million. Depreciation and amortization for the quarter was $31 million, even with last year. We expect depreciation and amortization to be about $127 million to $129 million in fiscal 2010. Capital expenditures for the quarter totaled $19 million compared to $26 million last year. For fiscal 2010, we expect capital expenditures to be approximately $135 million to $140 million. At this time, I will turn the call over to the operator for the question-and-answer portion of the call. Operator?

Thank you, madam. (Operator instructions) The first question comes from Farha Aslam. Please go ahead. Farha Aslam – Stephens Inc: Hi, Good morning.

Hi, Farah. Farha Aslam – Stephens Inc: Congratulations on a great quarter.

Thank you. Farha Aslam – Stephens Inc: Question about grocery products volume. Do you think that new source of volume from new entrance in the category and where are those volumes being sourced from in your belief?

Well, it would really vary by subcategory, I mean in some of our traditional products we’re clearly the share leader. As I think we have shared in prior calls, we have seen some consolidation of offerings in some of the retailers and with us being in the leading share position and having strong programs with these retailers, I do believe that’s benefited us. In some of the other categories such as Mexican food, our share is not nearly as large and so I think there we’re making great entries by gaining distribution and by having more significant feature activity with key retailers. Farha Aslam – Stephens Inc: Jeff, do you think the source of volume from some stumbles on the soup side at all in your Dinty Moore and maybe SPAM brands?

I really wouldn’t have any basis for knowing that at this point. We might glean some information as we study Nielsen data over the next few weeks, but I don’t have any basis right now for saying anything like that. Farha Aslam – Stephens Inc: Thanks. Then your refrigerated foods margins were absolutely terrific. Could you just help us understand Hormel in terms how – and the benefit from cutout versus how we should model rising hog cost and your ability to pass on those rising hog cost.

Well, I think we have talked about in prior calls as there are three big moving parts and they don’t model very easily sometimes. There is just sheer input costs, and we talked about we clearly recognize that lower hog inputs are favorable to our value-added items. We have also pointed out, though, in the past that we have done well in higher markets as well, and so we don’t see that as a fatal or dangerous condition for our business in and of itself. The second variable clearly is cut-out margins. Those had been somewhat more consistent but the last couple of years have certainly some extremes in that; they were terrible last year for the first quarter and they certainly were significantly improved in the first quarter this year. We are seeing more normalcy, I guess, albeit at a bouncing around level for what we are seeing so far into the second quarter. And then the third big variable is the one we really stake most of our attention on which is driving growth in our value-added business and enhancing our product mix. And so over the long haul, our goal would be to just continue to be able to generate increases in operating earnings from that segment by the combination of volume growth and enhanced mix. Farha Aslam – Stephens Inc: Okay. Then my last question, I will pass it on, is you are probably closer to the food service market than almost any other packaged food company. What are your trends in foodservice as they progress through the quarter, and could you give us any color of where they stand right now?

Well, the decline is certainly not as steep as the year before. I think we are seeing some glimmers of improvement. Our DCB business continues to hold its own. Our Jennie-O foodservice sales were actually up for the quarter. Hormel is more at the mix stag; overall decline, but in some of our value-added items such as the ones I referenced earlier, we saw increases and we weren’t seeing increases like that last year. So we are hopeful that the tide is starting to turn and we will be able to benefit from that. Farha Aslam – Stephens Inc: For the full year, would you – or are you right now expecting volumes in your foodservice to be up year over year?

For the full year, flat would probably be more realistic, and given that we are starting in a trough. Farha Aslam – Stephens Inc: Okay. That’s very helpful. Thank you.

The next question comes from Jonathan Feeney. Please go ahead sir. Jonathan Feeney – Janney Montgomery Scott: Good morning. Thanks.

Hi, John. Jonathan Feeney – Janney Montgomery Scott: Hi, Jeff. I wanted to get more specific actually on Farha’s questions. Specifically, when you are looking at that first piece of raw inputs, it seems like over the course of the quarter that became more and more difficult, and yet when I look at your numbers compared to Sara Lee and Tyson’s seems like, you’ve put out excellent or even better numbers despite it looked like January got tougher. Did hedging play a role in your raw input cost utilization this quarter? Can you comment at all about what your hedging looks like for the remainder of the year?

Hi John, this is Jody. I will help Jeff with answering that question. You are right; the cut out situation did deteriorate as the quarter moved on and at the end of January although it didn’t turn upside down like it did last year that benefit was diminishing. From a hedging perspective, we don’t traditionally have hedges on our hog position. The things that we do hedge would be our direct inputs into our turkey and any hogs that we do own. So there is no hedging benefit from hogs that are in that refrigerated foods. Jonathan Feeney – Janney Montgomery Scott: Maybe this is the simplest of question, but what is the time frame from the time you – what is the cash conversion from the time you’re actually purchasing a hog in the open market to the point where you are realizing revenue from that, is it like two or three weeks?

It depends on the items. It’s the fresh items will be quicker than that. Some of the value items could be quite a bit longer than that.

If you are talking – right now, we have been putting down hams for the Easter holiday season. So it really depends on the category that you are looking at. Jonathan Feeney – Janney Montgomery Scott: Okay, it is all over. Okay. Just finally on the refrigerated foods margins, specifically like the mix of value-added business, I know that you used to actually put this pyramid out that was interesting where you have this ladder value and I know at the top of that you have some products like spiral hams that have significantly higher-than-average margins, even in this 7.9%. Did you see an improved mix relative to your expectation this quarter?

No, not really. As we have continue to innovative, we certainly do believe we have added new entries to those top runs of the ladder the Natural Choices, Party Trays, our newer Pepperoni items and so forth and it was a mix tag this quarter on sales on some of those items. But overall, it was fairly flat quarter at the meat products level within underneath refrigerated foods, in contrast we had really quite a strong quarter almost across the board in grocery products with their franchises. Jonathan Feeney – Janney Montgomery Scott: Yes. I was going to actually – my next question was just on the grocery product side. Did you see an improved mix?

I think it would be – it is fair to say it would have been an accretive mix ultimately to the bottom line performance. The traditional items did well and those are good items for us. And we have over time windowed our way out of some laggard area; we don’t sell Viennas anymore, frankly the joint venture with Carapelli was generating yields, but not much for earnings, and so that that’s improved the overall picture too. Jonathan Feeney – Janney Montgomery Scott: I guess I was specifically thinking more about MegaMex.

That has helped. It is on track for what our expectations have been. MegaMex added a couple of new franchises, La Victoria and Embasa. We didn’t see just blockbuster sales of those items right out of the gate. But we are starting to gain momentum on those and we had quite good sales of the items that we had already been involved with, Herdez and Chi-Chi’s Starters [ph] and those types of items. Jonathan Feeney – Janney Montgomery Scott: I would think despite your grocery segment margins pretty high, but those probably over index right?

Being over 20 right now is the level that we are not thinking we would be sustaining. Jonathan Feeney – Janney Montgomery Scott: Okay. Thank you very much. I appreciate it.

The next question comes from Tim Ramey. Please go ahead. Tim Ramey – D. A. Davidson & Co.: Good morning and my congratulations, guys.

Thanks, Tim. Tim Ramey – D. A. Davidson & Co.: Nice quarter, very nice. Notwithstanding your comments to John a second ago, you said perhaps accretive to mix but I was getting a sense of increased sales of whole bird, increased sales of private label canned meats that maybe the trade down is still on. How do you react to that? Do you think that consumers are starting to find the bottom or are they still interested in more extreme value propositions?

Well, a mixed answer. The whole bird improvement for us, I don’t really feel has anything to do with a trade down. It is the same branded item. I think we are performing better in that area. We managed the portfolio better there. I would agree that our increase in sales was in specialty foods and private label items certainly would be consistent with trends that retailers are seeing of increases in private label. Obviously, our major emphasis is still in the branded side of the business, and again referring to grocery where it’s easier to get the share information. We are seeing increases by private label, but they have not really been at our – expense of our branded items and we are doing I think a good job of driving our results as well. Tim Ramey – D. A. Davidson & Co.: So if you think about the more value oriented pieces in those maybe – kind of margin in high mix items within your portfolio, just to pick SPAM, that sort of product where we are seeing generally continued strong movement into the product or is it sort of leveling out?

We had another good quarter in SPAM, and we certainly had a good year. We would conceive that the overall economic situation we think has helped the franchise. But our team there really started restoring momentum on that item. When we started advertising it, when we supported the product line with the expansion of an item such as SPAM singles, and we were starting to see increases even in ’08 in that product line, and so they have built an excellent momentum. I think they are doing a better job at reaching consumers that were friendly towards SPAM; that had it in the cupboard, but just had not got it out of the cupboard lately. And so, clearly advertising is focused on simple recipes and on getting that usage and we think that’s paying off. Tim Ramey – D. A. Davidson & Co.: Terrific, thank you.

The next question comes from Akshay Jagdale. Please go ahead. Akshay Jagdale – Keybanc: Good morning. Congratulations on a good first quarter. Just one question on the divisional EBIT, if I may, your new guidance of positive 6% to 10% EPS growth rounded up. What does it imply Jeff for divisional EBIT? From your last call I remember that you were – you said you expected about 9% to 10% increase in divisional EBIT. But your new guidance – can you give us a sense of what that implies regarding divisional EBIT?

If I am correct in translating what you are calling divisional EBIT is what we are calling our segment profit level. We do continue to expect that our segment profit results will be somewhat higher than our EPS results and that relates to the factors that Jody mentioned that we’re up against both in terms of the rabbi trust comparison and the Carapelli sale last year, which was another below-the-line addition. But as I referenced, I talked about my expectations is not 30% increase we experienced this quarter, but it would be more modest increases. But we do expect to see a growth still at the segment level. Akshay Jagdale – Keybanc: And if I could follow up on that, can you give us some color from each division – where do you expect the most slowdown in growth if you look at grocery products, refrigerated and Jennie-O Turkey for example?

Maybe in order to make sure everybody has enough time for questions, maybe if you could just focus your questions a little bit more for Jeff rather than every single segment, maybe you can focus on one or two. Akshay Jagdale – Keybanc: Yes, if you can comment on Jennie-O Turkey, I think we have seen a lot of inventories clear out. Can you give us a sense of what you expect this year when you started off with much leaner inventories from a industry stand point.

Well, the mission there is really about gradual improvement and we succeeded in delivering that last year. We are off to a good start this year. Some markets are still not terrific this time here in the $40 recipe range. That’s clearly below cost for everybody in the industry. But it’s early in the year. The winter is usually the least favorable time. We expect that to improve but we don’t think it is going to be fantastic at that level. But again, our focus is always on the value-added item and so as long as we can continue to turn the momentum in those areas and grow those items and run the operation efficiently we think we can steadily increase the results from that unit. Akshay Jagdale – Keybanc: Great. Just one for Jody in terms of in imaging your cash, I guess you bought back some shares. Can you just talk to us a little bit about priorities about using cash and maybe comment a little bit on the M&A environment and what you are seeing?

Sure. Actually our priorities for cash haven’t really changed. We continue to look at opportunities to invest in our business whether that’s investing on brands that we already have or looking for additional things and certainly the addition to the Country Crock line to the refrigerated segment is a nice add. And the fact that we’ve got our MegaMex joint venture up and going is a very good positive. We continue to give back to our shareholders increased dividends. We’ve actively been purchasing shares. As far as the M&A front, our team is focused on looking for those opportunities that meet our criteria for expanding our business and growing. So don’t have anything specific to tell you today. Akshay Jagdale – Keybanc: Okay. Thank you. I will follow up offline.

Thanks, Akshay.

The next question comes from Eric Larson. Please go ahead. Eric Larson – Soleil Securities Corporation: Good morning, everyone. How are you?

Hi Eric, good to hear from you. Eric Larson – Soleil Securities Corporation: Good to hear you too, Jeff. Just a real general question to start with, your overall sales level, obviously particularly grocery, I think it goes back to Tim's question. You wind up against the easy revenue to compare year over year and you had this significant recover sequentially from the fourth quarter. Did the overall pick up in your first quarter sales for the organization, particularly grocery surprise you at the strength.

Well, the netted out number when you cancel out the Carapelli, you cancel out the MegaMex’s 4% increase which would be consistent with what I hope that it would deliver over the long term, I can see given not only grocery’s negative revenue trend in the fourth quarter but really across the board trend, we certainly refocused everyone’s attention on the important need to make sure we are growing our franchises. And I happy to see not only their increase but really pretty much across the board in all the business segments the recovery that we were hoping to get. Eric Larson – Soleil Securities Corporation:

No and I think we’ve talked, last year it was in the 17. I think we’d like to get in the 18s on a sustained basis. We did have favorable cost situation in the unit for the quarter and then you got to watch any quarter, the quarter-to-quarter comparison there is a different sales mix in any given quarter. So that wouldn’t necessarily translate to the whole year even if cost saved the same. So very good quarter and I am encouraged particularly but what you’ve referenced at the beginning, which is the sales growth. And in the long haul, if we can keep that at those levels that would be a very good contributor to the overall result. Eric Larson – Soleil Securities Corporation: Okay, great. Thanks everybody [ph].

The next question comes from Christina McGlone. Please go ahead. Christina McGlone – Deutsche Bank North America: Good morning. Congratulation.

Thank you. Christina McGlone – Deutsche Bank North America: Jeff, I wanted to ask you on the refrigerated segment you had noticed softer demand for some of like the commodity pork and hams and bacon. Is that because the retail featuring for pork was not as stronger? Did exports decelerated, what happened there?

Well, during the latter part of the quarter as we saw hog prices increase, those tend to be the market-based pricing that goes into the retailers. Those become more competitive, you don't always win the features against someone else and there are times that the retailers say, “Okay, you’ve now reached a price point that I would rather feature something else.” And I think we saw that a little bit during the latter part of the quarter. Christina McGlone – Deutsche Bank North America: Now that prices have gained a comeback a bit in some of the cut-out values, do you think that your rate gains being retail featuring?

We could, but we are also ready for it to go back up. We recognize that it has slid down somewhat here. And we will have a little bit more favorable picture for this quarter. But we know there has been some level of liquidation going on. And so our expectation is as we head into summary that we need to be prepared for higher market. Christina McGlone – Deutsche Bank North America: Okay. Thank you. I wanted to talk about Target's new concept, the PFresh concept. It seems like they are going to be featuring case-ready meat pretty aggressively and I think you are their sole supplier, I am not – if you can confirm that. I just wanted to know what does that mean for you in terms of earnings or margin incrementality.

Target is an important customer. The PFresh initiative certainly will affect a number of their stores. The assortment in those stores is quite a bit more limited than what would be in their traditional SuperTarget format or any other traditional retailer. Our joint venture with Target, the preset venture, is the manufacturer for Sutton & Dodge line, so that is the beef and pork products that would be within those cases. So we certainly think it will be helpful, but I don’t know that it is not a major EPS moving item by in and of itself. Christina McGlone – Deutsche Bank North America: Okay. Just to follow up on Farha’s question on foodservice, I remember at the Investor Day you said – you thought that we would see growth in the second half, but it seems from what the restaurants are reporting and even in your tone things are a little bit better. Do you think that maybe you are more optimistic than you were at the Investor Day now?

I think that’s correct. It’s still (inaudible). There are certain markets that are still quite weak. But overall that's the tone I am hearing from our foodservice professionals is more optimism. They are having more successes both at an item level and in certain markets. So, yes, I think we maybe are seeing a turnaround earlier. Christina McGlone – Deutsche Bank North America: Okay. Last question if I can squeeze it in, the Compleats line, it’s great that it’s stabilized. I was wondering what drove that and is that sustainable because sometimes we see it stabilize or do well and in the next quarter it weakens. I wanted to get an idea of what the trend is?

I think the history you’ve pointed out, that’s a fair characterization. So I am guarded on it. I will believe it when I see it in terms of, okay, not only have we stabilized it but are we increasing. But our repeat rates are very good with consumers. We are having good success with many retailers. We are seeing some of our heavy users come back into the category. So in the long haul, we are still very optimistic in the product line. Clearly there has been a time frame here where people traded off some of the added convenience for price if they thought they could get comparable items and a canned format. But the time press nature of modern life in America really hasn’t changed any and we think that these items will deliver against that and we should be growing again here in the very near future. Christina McGlone – Deutsche Bank North America: Okay, great. Thank you.

The next question comes from Robert Moskow. Please go head. Robert Moskow – Credit Suisse North America: Hi, thank you.

Hello. Robert Moskow – Credit Suisse North America: I just – to see a 10% volume increase in grocery, just after a fourth quarter where there was I sort of call a mid-single-digit decline in grocery. It just seems like such a shocking turn. And I am sure that your products are doing well and your consumers are reacting well to them. But why the big swing and especially in an environment where none of these consumer staple companies are able to get any volume at all. Is there any change that some of this got pulled forward into first quarter and away from second?

I think there, frankly, is a little more of a chance that some of it might have pulled forward from the fourth quarter into the first that – the Nielsen trends in many of these categories were not down anywhere near the levels that what we saw in shipments. So I think there were a lot of factors across the board. There were some customers tightening inventories. We had hurricane comparison issues in the fourth quarter year over year. I personally think there is a little element of psychology in the company that the prior year had been a down earnings year and we were very focused on driving earnings for results in 2009. So when people had a choice to make potentially as they headed towards the end of the year, I think they were leaning towards the higher margining items potentially at the expense of volume in some cases. I thought that the time in the fourth quarter drop could be more of an anomaly. And so far I am encouraged by the results of not only grocery but the other divisions that that seem to be the case. Robert Moskow – Credit Suisse North America: How much did the first quarter you think benefitted from that shift out of the fourth quarter?

I am just giving you my sense of it and it would be to be really clear with it. The only area that it could have even possibly happen in is grocery, the meat items on a perishable basis don’t move quarter to quarter; they sell when they need to sell. So it would be minimal, it would be 1% or 2%. Robert Moskow – Credit Suisse North America: Do you think it’s fair to say that we will see volume growth in grocery for the rest of the year?

Yes, you will clearly see it because of the MegaMex addition and we’ll keep calling out each quarter that netting out of Carapelli will have one more quarter to do that because by the end of the second quarter we were done, but we will point out which items just came on from MegaMex, but anyway a good momentum in that franchise. I do think we – I hope we stabilize microwave and I see hopes for that growing. And we still have a great momentum in the canned traditional item. So I am encouraged that grocery should continue to grow. Robert Moskow – Credit Suisse North America: Okay. Well, very good quarter and good luck. Thanks.

Thank you.

The next question comes from Diane Geissler. Please go ahead. Diane Geissler – CLSA: Hi, good morning.

Hi, good morning. Diane Geissler – CLSA: Congratulations on good quarter.

Thank you. Diane Geissler – CLSA: Have you mentioned that you saw hog prices move earlier than you originally expected? Could you give us some guidance there, and what were your original expectations and what are your expectations for the full year?

I think we talked at the end of last year that we expected the hog prices to remain status quo for the first half of the year, and the salary reductions would really kick in mid year, whether it is weather related or – it’s hard to tell when you are in the Midwest and we’ve had a lot of interesting weather days. But I do think that it has moved up and I would expect that what we expected to be in the back half of the year, we will now see in the second quarter through the end of the year which is higher hog prices, certainly this summer will be the tell tale. Diane Geissler – CLSA: Okay. Then you also said you saw that exports on the fresh side were weaker. Could you comment on – certainly Mexico has been very strong on the process side. But could you comment a little bit on what you are seeing out of China?

We don’t play in that marketplace very well and I haven’t seen the new export numbers but they appear to be very strong, and that’s what tends to drive the cut-out values a lot. Last year, we certainly saw evidence of that. So I think as the new report comes out with exports, we will get a better picture of where that’s at. But they are strong. Diane Geissler – CLSA: Okay. And then I think I missed your comment on the share repurchase. What did you repurchase and what was your average price?

We spent about $16 million for 421,000 shares. Diane Geissler – CLSA: Also now that you’ve closed on the Country Crock, what are your expectations regarding accretion from that acquisition?

It would be fairly modest in its first year. They had been suffering from some distribution losses. It really wasn’t in the sweet spot of the former owner. We are a category cast [ph] in that refrigerated meal area. We’ve had good dialogues already with some retailers. But in year one, we clear are going to have to do some investing to get that franchise back on a healthy basis. After that – it’s still – it is not a huge – it is $50 million in sales and it would have margins that would be typical of the value-added items within refrigerated, so maybe a low-teen margins. Diane Geissler – CLSA: Okay. All right. (inaudible) asking there. Thank you.

The next question comes from Mike Hamilton. Please go ahead. Mike Hamilton – RBC Dain Rauscher: Good morning.

Hi, Mike. Mike Hamilton – RBC Dain Rauscher: Jeff, you had mentioned that you saw some activity on the Jennie-O side in foodservice. Could you comment a little bit on where you are making progress there?

Just in general, our numbers were up for the quarter which was encouraging. Jennie-O does a very nice job in the non-commercial institutional side, which we said all last year wasn’t off nearly as much as the commercial side. And so that is maybe not surprising. Their recovery is coming quicker. So that would be their strong spot of their foodservice group. Mike Hamilton – RBC Dain Rauscher: So nothing new in terms of inroads in restaurant area, it’s really the traditional strength.

That’s fair. We are not a big QSR player; we are not a subversive player, for example, so that it’s not being driven there. And traditional white table cloth restaurant still don't market a lot of turkey unfortunately for us. So that’s not a big driver of their business. Mike Hamilton – RBC Dain Rauscher: Thanks and congratulations.

Thank you.

(Operator instructions) We have a follow-up question from Akshay Jagdale. Please go ahead. Akshay Jagdale – Keybanc: Hi, thanks for taking the question. This one is again for Jody, just on the cash situation and in terms share buybacks, in terms of your guidance are you factoring in a certain level of buybacks? It’s just – you have $450 million on the balance sheet in cash and I know you’ve talked about your priorities and you’ve been very discipline, but leaving it on the balance sheet is probably not the best use of cash. So just trying to get a sense of what we can expect in terms of buybacks for the remainder of the year.

Fair enough and I agree, leaving it on the balance sheet is not the right focus that we have. So we’ve traditionally used our share repurchase program as a release valve. And given, there are possibilities in M&A area and if those come up I would assume that share repurchase wouldn’t be a priority. So we have that balancing act and certainly have made a nice step forward with new purchase in the first quarter. Akshay Jagdale – Keybanc: Thank you. I really appreciate it.

We have a follow-up question from Jonathan Feeney. Please go ahead. Jonathan Feeney – Janney Montgomery Scott: I am sorry. Thank you very much. Jody, just one follow-up question on the – could you give us a rough number for what input costs were down in the grocery products segment as you experienced in this quarter. What you think that’s going to look like for the year?

I would expect for the year that we are going to see continued ramp up in input costs certainly as they relate to pork-based items because we are expecting to have those higher markets that we now saw at the end of this period. We saw below-the-line expense decreases in freight and warehousing. On the inputs for non-pork based items, those were basically flat for this quarter. Jonathan Feeney – Janney Montgomery Scott: And for the pork-based items this quarter in grocery? I am sorry, if I missed it.

We haven’t said a specific number, but clearly the markets were low for some of those inputs earlier on. And so whether it’s SPAM or bacon bits, they were favorable for GP. Jonathan Feeney – Janney Montgomery Scott: Are we talking like down mid-singles or –?

I guess, maybe we’d have to follow up you with you on that. Jonathan Feeney – Janney Montgomery Scott: Okay, great.

I would be pulling out a number that I don’t fully have in front of me. Jonathan Feeney – Janney Montgomery Scott: A guy can always try, right. Thanks.

The next question comes from Alan Brochstein. Please go ahead. Alan Brochstein – AB Analytical: Hi, guys. Congratulations. I just following your company for, I guess, about six quarters now. I continue to be very impressed. I had one thing I haven’t been able to figure out, which is how much of your business would you say is either private label or close to the low end of the branded market in terms of price. Have you thought about your business that way?

Allan. This is Kevin Jones. Who are with? I don't know if I had the pleasure of – Alan Brochstein – AB Analytical:

Okay. And your question is on percentage that’s private label? Alan Brochstein – AB Analytical: Well, either private label or with SPAM or it’s clearly more value focused.

We are primarily a branded company. The only area of our business where we really have any kind of focus on private label is within our specialty foods segment and we do some canned meat items. We’ve traditionally done packaged gelatin items and so forth. But it is not a large percentage. We are primarily a branded value-added company. Alan Brochstein – AB Analytical: Okay. Thank you.

(Operator instructions) There appears to be no further questions. Please continue with any of the points you wish to raise.

Thank you everyone for joining us. I hope it’s nice and warm down there in Florida. Feel free to follow up with me after the call. Thank you very much. Have a great day.

This concludes the Hormel Foods first quarter earnings conference call. Thank you for participating. You may now disconnect.