Flowers Foods' CEO Hosts Analyst Day (Transcript)

That's not only true in wheat, but most commodity has spiked in 2011 for the company. So that did bring a lot of pressure to bear and we said throughout the year that we thought the fourth quarter would probably be our testing time with the commodity cost and you found out that was true and we said also the first half of the year will be pretty tough because of [theory] on hedges and Steve Kinsey will get more into that in a few minutes.

So it has been about volatility and I noticed one day I guess it was last Friday we had a spike in wheat $0.25 up, yesterday I believe it was Monday, we had a $0.20 down day. Looking at overnight, the market is down in overnight on the wheat and reading the Wall Street Journal this morning basically said that there is not going to be rush years and now it is going to be export and not importing, so let's not relieve things. The weather and the crops look good in the West and the Midwest, all of you know we buy hard red winter wheat. That’s basically raised in Texas, Kansas and north of there.

So things do look in my mind, a little bit better on the commodity front and you know not get into that, that’s in the guidance and all is baked in our guidance, but if we see better results than the back half of the year, because the crops are better I think that bodes well for 2013. So we are looking at it longer term as be in a better commodity situation. So volatility has been here for three or four years and it will be great to see it level out and only time will tell that we know there is more and more people in the world and we will have to feed a lot of people going forward. So over time the long pool, expect commodities will still be high.

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