Kevin Jones – Director Investor Relations Jeffrey Ettinger – Chairman of the Board, President, CEO Jody Feragen – Senior Vice President, CFO

Laura Farha Aslam – Stephens Timothy Ramey – D.A. Davidson Jonathan Feeney – Janney Montgomery Scott Robert Moskow – Credit Suisse Christina McGlone – Deutsche Bank Michael Hamilton – RBC Ann Gurkin – Davenport & Company Chris Bledsoe – Barclay's Capital [Akshe Abdel – Keybanc]

Welcome to the Hormel Foods first quarter earnings conference call. (Operator Instructions) I would now like to turn the conference over to Kevin Jones.

Good morning. Welcome to the Hormel Foods conference call for the first quarter of fiscal 2009. We released our results this morning before the market opened around 6:30 am Central time. If you did not receive a copy of the release, you can find it on our website at www.hormelfoods.com under the investor 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 and an outlook for the new fiscal year, then Jody will provide detailed financial results for the quarter. The line will be opened for questions following Jody's remarks. An audio replay of this call will be available beginning at 10:30 am Central time today, February 19, 2009. The dial in number is 800-405-2236 and the access code is 11125920. It will also be posted on our website in archive 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 statement 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 31 to 35 in the company's annual report for the fiscal year ended October 26, 2008 for more details. It can be accessed on our website. Now I'll turn the call over to Jeff.

Good morning. I think we did a decent job of holding our own in a turbulent economic environment during the first quarter. Overall sales grew 4% to $1.7 billion. Earnings were $0.60 per share, down from our record earnings of $0.64 per share a year ago. Four of our five business segments showed increased sales but only one segment delivered increased operating profits. I will now take you through each segment. Our grocery product segment reported a dollar sales increase of 6% and a segment profit increase of 9% for the first quarter. Sales of the Spam family of products, Dinty Moore Stew and Hormel Chili were all up double digits during the quarter. Our strong advertising and promotional efforts helped up maintain strong brand loyalty giving us bigger shares of these product categories which are benefiting from a strong value proposition. These sales increases more than made up for the decline in sales of our Hormel Complete Microwave Meals during the quarter. We have taken steps to firm up sales of Complete which have suffered from an industry wide consumer trend away from microwaveable convenience products. These steps include enhanced marketing support both on air and in store. Sales of our ethnic products also increased during the quarter primarily driven by the restaging and increased support of our ChiChi's Sauces. The refrigerated food segment had a difficult firs quarter, reporting a 5% increase in sales but a 27% decrease in segment profit. Higher than expected hog costs combined with lower than expected primal values resulted in unusually weak cut out results. We have gone from relatively high packer margins last summer to some of the worst packer margins we've seen in some time. Our Farmer John subsidiary was pressured by these same difficult circumstances during the quarter. We did achieve strong performance in our meat products group from the sale of value added branded products. We registered double digit sales increases of Hormel Cure81 hams, Delousa Deli Company products, Hormel Black Label Bacon and Hormel Natural Choice Sliced meats among others. Food service sales declined for the quarter as the consumer trend toward eating more meals at home and decreased travel continues to impact the industry. The Jennie-O Turkey segment delivered a 5% increase in sales and a 16% decrease in segment profit during the quarter. As expected, Jennie-O had to deal with high grain input costs as birds with higher prices grain and current market prices were brought to market. As was also expected, these costs were not fully recaptured due to weak commodity meat markets stemming from an industry supply of breast meat and whole birds. We continue to work aggressively to reduce production at Jennie-O in order to minimize our exposure to these low commodity meat markets and to better align our meat supplies with our value added business needs. Decreasing egg sets and poultry placements elsewhere in the industry should also improve the balance between supply and demand. In the meantime, the team at Jennie-O continues to focus its attention on increasing sales of value added products with notable success being achieved during the quarter on Jennie-O Turkey Store Fresh Tray Pack Turkey and Turkey Burgers, and our grand champion, Deli Turkey. The specialty food segment reported decreased sales of 8% down 11% excluding acquisitions and a segment profit decrease of 15%.Within the segment, our specialty products group saw a reduction in contract packaging volume for microwave products and Century Foods suffered from deceased sales of nutritional and ready-to-drink beverages. Our Diamond Crystal brands group did generate a solid quarter with increased sales of nutritional and liquid portion products. Our other segment consisting primarily of our Hormel Foods business, we reported a 17% increase in sales but a 9% decrease in segment profit. We did enjoy increased export sales of fresh pork and the Spam family of products. However, these were offset on the bottom line by the increased strength of the U.S. dollar and weaker results by our joint ventures. Overall, we had predicted a down quarter, indeed a down first half for fiscal 2009, and our results thus far are in keeping with our expectations. But based on this result and the continued vibrancy of demand for many of our branded value added products, we believe we remain on track to achieve our guidance goal of $2.15 to $2.25 per share for the full fiscal year. Needless to say, we recognize that we will continue to confront challenges to our business as a result of the economy. These include the prevailing oversupply of commodity turkey meat, today's unfavorable cut out values in pork, uncertainty regarding commodity grain prices later this year, evidence of some trading down within the retail states and increased competitive pressure. But on the flip side, we have a number of strengths we feel give us a competitive edge in this economy. These include our strong portfolio of leading brands, our balanced business model, packaged food and value added protein products and a strong development program for innovation. With regard to innovation, I'm pleased to report that we remain on track to meet our goal of $2 billion in sales of new products by fiscal 2012. At this time, I will turn the call over to Jody Feragen to discuss the financial information relating to the first quarter of fiscal 2009.

Good morning everyone. Earnings for the fiscal 2009 first quarter totaled $81.4 million or $0.60 per share compared to $88.2 million or $0.64 a year ago. Dollar sales for the first quarter totaled $1.7 billion compared to $1.6 billion last year, a 4% increase. Acquisitions added about $5 million to the top line in the first quarter. Volume for the first quarter was 1.2 billion pounds, down 1% from fiscal 2008. Acquisitions added 5 million pounds to the quarter. We processed 2.4 billion hogs in the quarter, about even with last year. Selling, general and administrative expenses in the first quarter were 8.4% of sales this year compared with 8.9% last year. As we stated in our earning release, we have changed the classification of shipping and handling costs from the selling and delivery expense to cost of product sold. Classification of the expense in cost of product sold better reflects the cost of producing and distributing our products. The 2008 first quarter results have been reclassified for comparability. We expect SG&A expenses to be approximately 9% of sales for the remainder of the year. Advertising expenses were 1.5% of sales for the quarter compared to 1.7% last year. We expect full year advertising expenditures for fiscal 2009 to exceed fiscal 2008 as we continue media campaigns to support our brands. Interest and investment income was a net gain of $2.4 million for the first quarter compared to a loss of $4.9 million in fiscal 2008. That was due to higher returns on the Rabbi Trust Investment and interest on higher cash balances. Interest expense for the quarter was $7.5 million compared to $6.7 million last year, primarily driven by higher borrowings on our short term line of credit. We expect interest expense to be approximately $28 million to $20 million for the full fiscal 2009. Our effective tax rate in the first quarter was 34% versus 36.7% in fiscal 2008. This lower rate is attributable to the mark to market gains in the Rabbi Trust which are not taxable. We expect the effective tax rate for fiscal 2009 to be about 36% to 37%. Basic weighted average number of shares outstanding for the first quarter was 134 million. The diluted weighted average number of shares outstanding for the first quarter was 135 million. We repurchased 375,000 shares of common stock during the first quarter at an average price of $27.67. We have 1.9 million shares remaining to be purchased from the 10 million share authorization in place. We continue to be strategic in repurchasing shares of our stock as a use of our free cash flow. Depreciation and amortization for the quarter was $31 million compared to $33.1 million last year. We expect full year depreciation and amortization to be about $130 million to $135 million. Total long term debt at the end of the quarter was $350 million and we ended the quarter with $100 million outstanding on our short term line of credit. Cash flow from operations improved over 2008 as we emphasized initiatives to reduce our working capital. Capital expenditures for the quarter totaled $25.5 million compared to $31.9 million last year. For fiscal 2009 we expect capital expenditures to be about $140 million, mainly relating to the completion of our new production plant in Dubuque, Iowa. We continue to maintain our traditionally strong balance sheet. Our solid capital position not only gives us the flexibility to weather the tough economic times, but it also allows us the opportunity to make strategic investments to generate additional profitable growth for our company. At this time, I'll turn the call over to the operator for the question and answer portion of the call.

(Operator Instructions) Your first question comes from [Laura Farha Aslam – Stephens] Laura Farha Aslam – Stephens: I'm trying to do a better job of understanding your turkey division and the moving parts. It did quite well compared to the challenges it faces. Was there anything in particular in the quarter that you could highlight in the turkey division that allowed it deliver pretty decent results in a tough environment.

I think the biggest impact probably related to the production cuts we put through last May that allowed us to be position going into the quarter with minimizing the amount of surplus meat we would have in the face of what we knew were going to be tough meat markets. It also allowed us to realistically feed fewer turkeys less grain at a very expensive price, and so we see that unit, our expectation has been by the second half of this year to start looking at positive comp and they seem to be well on their way toward achieving that. Laura Farha Aslam – Stephens: In terms of your grain hedges, traditionally Hormel hedges its grain in the fall. Are you continuing your current grain hedging policies or have you changed them at all in the face of current volatility.

Really for the last two years we've maintained a policy that we're willing to take positions in the ranges of 25% to 75% coverage on the primary feed ingredients of corn and soy meal. They're not necessarily put on any more at one particular time and at any given time we look out at a time horizon of 18 to 24 months, but it varies as to how much ahead we are at any given period within that 24 month time frame. Laura Farha Aslam – Stephens: When you look at the current economy as it stands, is this economic weakness favorable to you because you have some recession resistant products which is Spam or Chili or are tough economic times challenged because of the food service? If you had to weigh the two, which would you say is more a factor for Hormel?

In spite of the national economic brain trusts declaring that the recession started retroactively in the fall of 2007, we really didn't start seeing it in our business until the fall of 2008, so we're pretty early on still in measuring these effects. At this point I would really have to tell you it's mixed. We certainly have seen a down turn in demand in some of our food service related businesses. We've suffered some in the microwaveable areas both in shelf stable products and in refrigerated as people seem to be moving more towards a canned alternative in those areas. And I think it hit our specialty business this quarter as they have some of their contract business proved to be susceptible to the economy. But as you pointed out, on the plus side we have very solid franchises in many of our traditional products and overall we seem to be more than holding our own in this environment.

Your next question comes from Timothy Ramey – D.A. Davidson. Timothy Ramey – D.A. Davidson: You ended the quarter with quite a good pile of cash and great cash generation during the quarter, I'm wondering why there was anything on the line of credit. Can you remind us what the terms are on that $350 million note and whether it would make sense to pre-pay any of that?

We continue to evaluate what our capital position is and the $350 million note has penalties to it and I haven't been able to justify that additional cost on it. And additionally, we like to keep some dry powder available for opportunities that may present themselves. I think we're in an enviable position in the market place with a very clean balance sheet and the opportunity to look for acquisitions that can drive profitable growth. Timothy Ramey – D.A. Davidson: Would you give us a little bit more color on the difficult packer margins and how you see that sort of a snapshot of where we're at now and how it might progress over the next few months.

It's hard to tell. We went through the first part of the quarter in pretty normal conditions and then it really reared its head late in the quarter and we're still upside down right now in terms of the value of the mean versus what we're paying for hogs is negative. Historically these time periods don't last particularly long. They shouldn't over time, but it's really hard to tell right now what's driving and when exactly we should expect it to reverse.

We do still expect to see a reduction in the supply of hogs in fiscal 2009, probably late spring early summer to hit and really like Jeff indicated, it's hard to tell. It should be upside down but it currently is. Timothy Ramey – D.A. Davidson: The direct grocery side, great performance there, but we've been hearing a lot down at Cagney and other venues that there's been some inventory deloading and destocking. It doesn't seem like it based on the sell through that you had. Did you note any inventory issues either at the consumer level or the grocery level?

I really didn't. To me, maybe we went through that earlier than other companies. There was a time two, three years ago where we saw a pretty big disconnect between our shipments and what we were selling though on scan basis. Maybe we're just on a category that people decided earlier that they weren't going to maintain large inventories, but we really did not see any effect of that this quarter.

Your next question comes from Jonathan Feeney – Janney Montgomery Scott. Jonathan Feeney – Janney Montgomery Scott: Following up on an earlier question about the trading down, it strikes me that the portion of your business that carries the highest margins are products that are really good value ways to eat in that grocery products business and would benefit a lot from people eating more meals at home and even within that, you're finding more reasonable ways to stretch a family meal and a part of your business that's more vulnerable to just the general economic malaise which would be refrigerated food and food service and all that goes with that carries that lower margin. Have you got any consumer look that would verify or deny that thought?

I think the numbers of the quarter would certainly lend some support to what you're saying. If you look at the grocery division, you've got 6% increase of sales, 9% increase in profit with a big downturn in microwave. So obviously but for that, the numbers would have been even stronger. So there's clearly momentum in that area. And refrigerated did experience some issues with food service and with some of the other items. So far though, it's not a need. Expensive items are down and less costly items are up matrix, and we have items that run counter to that and it kind of depends on what purpose they serve in the portfolio, what people are buying them for and if they still believe that they're a good value for that proposition, then even a higher priced item can hold its own. Jonathan Feeney – Janney Montgomery Scott: So within the meat segment, you're actually not seeing the sort of bottom end if you will, like the less expensive parts outperform? It's kind of all over the board right, because you've got good performance.

You could make an argument that the migration to such franchises as ham or raw bacon would indicate a move towards value because those are pretty good value type of items, but we're always a branded more premium player within those segments. So we're not seeing the trade down within. With the exception of, I know private label has been a big theme at the Cagney conference and I think we would reiterate what some of the other speakers said, which is we're getting more and more to a world of leading brands and private label, and the folks in the middle are the ones seeing share loss. But we pretty much, most of our categories, I think 34 items are number one, number two brands so we pretty much have those leading share positions in the niche categories we're competing in. Jonathan Feeney – Janney Montgomery Scott: In a tumultuous year, there's been a couple of consistent things. Everything I've been thinking about the hog market has been wrong and everything you've been saying about the hog market has been right. What are you currently thinking about as far as hog prices for the next quarter or two and what are you seeing on that cost side going forward?

I really appreciate you giving me those kudos because I no longer am forecasting hog prices. I think generally you're going to see with the reduction in the numbers that the prices obviously should increase. I don't see substantial increases over what where we were for a full year in 2008. And then obviously on the cut out side, it's going to depend a lot on what happens with exports and consumer demand within the industry.

Your next question comes from Robert Moskow – Credit Suisse. Robert Moskow – Credit Suisse: Did you break out the price and the volume on the grocery products division?

Overall, volume was up 2% and net sales were up 6%. There are mix issues in there also, so it's not just pricing.

There was a decline in the complete that had a big impact on it. Robert Moskow – Credit Suisse: How do you think your pricing in grocery is going to track through the year? Are we going to see some price deflation in that group or are you done taking pricing? How should we forecast that?

In general, we've been in a catch up mode on pricing. You look at the meat based items, many of our meat competitors obviously are suffering from it big time and we have certain sub segments of our business where we see that where it's been very difficult to get full pricing to recover that kind of increase in raw material costs. That being said, most of the branded item pricing has kind of worked its way through the system. There is currently right now being executed in the market place a price increase on Hormel Chili that frankly we worked in partnership with the retailers. We delayed that effort because we had so many significant programs out in the market place for the Chili season. It would have been appropriate given the run up in can costs to take it last fall, but we decided to just go ahead and do it this spring. So that's really the last branded franchise to execute on that basis. Robert Moskow – Credit Suisse: So if your pricing is say positive two or positive three, I can't remember what from a year ago, do you think you're going to be pretty consistent in how it plays through throughout the year in the two to three range?

In terms of what the net sale increase will be over volume increase? Robert Moskow – Credit Suisse: Yes, Do you think the way you report pricing will up pretty consistently up two to three over a year ago?

I don't have the math. I'm pretty sure that you're going to see in most of the segments that the net sales figure will be up more than the volume figure, but I just want to be careful. If you're referencing how we're doing on pricing versus cost, we haven't caught up on it and I kind of doubt we will on a full basis, but we're close. We're certainly at a more comfortable rate than we were a year ago at this time. Robert Moskow – Credit Suisse: I was tracking pork cut out in November and December and they actually looked just fine. It wasn't until January that those margins went negative. Is that what you were seeing also, and are we very negative right now?

We are very negative right now. I think we had a couple days where it finally turned and went into a positive territory, but it's back negative. And yes, January was a month like the industry hasn't seen well over a decade, and that really did impact our refrigerated foods business.

Your next question comes from Christina McGlone – Deutsche Bank. Christina McGlone – Deutsche Bank: I just wanted to say the results were very good, and I was curious if they were in line with, even though you had forecasted down first quarter, down first half, they were still stronger than we expected and I was wondering if they were in line or perhaps a bit better than you expected for the quarter?

Our segment results were when all is said and done, slightly better than we expected and we did see some benefits on tax rate and the Rabbi Trust comparison and so forth that made the earnings per share number even a little bit higher. Christina McGlone – Deutsche Bank: Going back to Jennie-O, the results were very strong and I know that you had some corn hedges. Do they go off now? How do we think about this business going to the second quarter because the industry has been very aggressive in eggs and poultry placement reductions and it looks like you're reducing your commodity need on the market and then at the same time if you rolled through higher cost corn hedges, should we look at this margin as sustainable for the rest of the fiscal year?

I would urge you not to look at a particular margin rate versus sales as being sustainable for the year, for any year for Jennie-O just because it's a pretty seasonable business in terms of the returns. The first and fourth quarters are high and the second and third quarters are low. If you look year over year at the same quarters, we could be in a position to see an improvement in Q2. Our outlook had been more like Q3, Q4. There's still a lot of meat on the market. The best meat price is depressed versus where it was a year ago and it hasn't shown a lot of signs of movement yet. The cold storage stocks are mounting. But we have done a nice job of tightening ourselves up and reducing the ratio of surplus meat that we would have internally and having it match better to our value added needs so that helped us in the first quarter. It should help to continue to help in the second quarter. Christina McGlone – Deutsche Bank: Do the corn hedges, are they rolling off or are they still there?

They just do naturally roll off, the ones that you put ion place for a certain time frame, but what I answered earlier, given that we have a general philosophy of a 25% to 75% range and given that we could be out any time as much as 18 to 24 months, it's not like all hedges are just going to go off and be replaced with no hedge. There will just be new price positions that are part of our hedge equation and we true up that math through filing each quarter so you can kind of see where that ended up.

We basically put hedges on to cover grain as the turkeys consume it and they consume it 12 months out of the year so there's not like an end point to something. Christina McGlone – Deutsche Bank: In terms of going back to the packer margins, if the industry is negative now and the supply of hogs is just going to get tighter as we get into the spring and the summer, how would say the industry will respond to that? Do you expect slaughter to cut back? Historically, how has the industry responded when they're facing a tighter hog supply?

I don't know that I have many years to go back to when we were upside down back in 1996, but I think that you would look at the opportunity to reduce your production numbers and we've certainly, while we harvested the same number of heads last year, certainly look for opportunities particularly in January where we could reduce the numbers that we had going through. Some discretion by production packers might be in order to get things turned around.

We have most of our hogs on contract and certainly we honor the contracts in terms of what we're supposed to take delivery for, but as things turned around here, if there free market hogs that normally we would be bidding on, we're not looking to take them in and cut red on them.

Your next question comes from Michael Hamilton – RBC. Michael Hamilton – RBC: I was wondering if you could quantify gain off of the Rabbi Trust in the quarter.

Last year we actually, it was a minimal gain for the first quarter, somewhere over a $1.5 million, but it was a bigger loss last year. Last year I think it was a $6 million loss. Michael Hamilton – RBC: Is a piece of the trust in the Hormel shares?

No. It is all market investments and obviously because of the performance of the equity markets, it's kind of, and I have not rebalanced. It's kind of skewed itself to fixed income so we tend to have a little better than market favorable results right now, but if anybody can tell me what the market is going to do in the next three months, I'd welcome that. Michael Hamilton – RBC: I was going to applaud you. Your portfolio is doing better than mine. Jeff, could you take a couple of minutes and give your views knowing there's a huge volatility on international outlook, how you see things playing out and impacting the Hormel business model?

In terms of exporting? Michael Hamilton – RBC: Exactly, and the full international model given what we're seeing in emerging market pressure and the unknowns on the demand side.

We're expecting frankly a little bit of a downturn in export volume on pork. Our expectation would be in the 10% to 15% range. Others have other opinions and we'll see I guess, but that would be a 10% to 15% decline off of a very large number obviously. The number has mounted over the years. When all is said and done, our pork exports are pretty niched and pretty limited. They're a valuable part of our portfolio but it's not a big volume area. We obviously have in country presence in markets like China, and there we have seen a reduction. There's more pigs so there's been a reduction in the cost of that raw material so that's favorable. On the turkey side, dark meat in holding in there for now. We worry about political risk with kind of sporadic new listings of plants from Russia and others but overall right now, the meat is moving and there seems to be good solid demand for it. But it's certainly something we're keeping our eye on. Overall it affects our business. It's not as much a direct effect but clearly if it made markets back up and meat back up then we would feel that even in our domestic business. Michael Hamilton – RBC: On the specialty side where you mentioned some economic pressures contract wise, is it your feeling that you're taking some market share issues or is it mainly showing up in pricing?

The areas that we really got hit in specialty are where we do more contract manufacturing for others so the downside to that is you're kind of at the mercy of however their franchise is doing. And for those, they'll just have to correct themselves over time. In addition to that, we did lose a customer or two in those areas. In that case, the team has been aggressive about trying to find replacement business and in one case has already landed some, and in another case, there is some pretty favorable things to be able to utilize those facilities a capacity basis. So they may well see another quarter, a down quarter but I don't know that it will be down as far as this first quarter turned out to be.

Your next question comes from Ann Gurkin – Davenport & Company. Ann Gurkin – Davenport & Company: We've heard lots of discussion at Cagney about cost cutting and companies looking at reducing costs further. Is this a program that Hormel is embarking on as well?

If I have excess costs to cut, I'll certainly look to do that, but we have run ourselves as a very lean company. Not to say that we don't judiciously look at every job that needs to be replaced in this economic environment. We've asked our business units as well as our corporate staff to really scrutinize expenditures, kind of the normal day to day think we do at Hormel. Ann Gurkin – Davenport & Company: Can I get an update on China and your commitment to that market?

We've been in the market now for 11 years. We have we think a strong niche position there. Our brand has a great reputation. It's more of a high end brand in that market. Obviously we're hearing about some downturn in that economy, but for now a downturn means high single digit growth instead of double digit growth, and our volumes and sales in China were up first quarter, so we're still very committed to that market and over time want to find the right way to grow our customers over there.

Your next question comes from Chris Bledsoe – Barclay's Capital. Chris Bledsoe – Barclay's Capital: I've had a difficult time trying to quantify the elasticity historically in a recessionary period. I curious, you own work has suggested a cross to protein complex and a certain magnitude of elasticity that we can just think about as a framework more from a macro perspective than anything specific to Hormel.

I have to say that we don't have a lot of work in that regard and even in this case study example we're in now, I wouldn't have necessarily guessed all of the franchise reactions that we've seen. I think it just depends on how the consumer sees the value proposition in the items, what the competitors do at the same time, what retailer's attitude is toward the items. So I probably can't help you a lot in terms of something that would be able to sink your teeth into in terms of the modeling.

It's a global market place today, so obviously the impact that exports or imports have on any one protein is important as well. Chris Bledsoe – Barclay's Capital: Just perhaps anecdotally then, among your own restaurant customer base, are you seeing any change in feature activity in choosing poultry over red meat items? Any change of behavior among your restaurant customers?

We've certainly seen traffic changes. The ones that are in that casual dining or higher end areas are suffering more than the fast food type which are clearly hanging in there. We don't have a heck of a lot of fast food exposure on the Hormel side although that was one of the reason Diamond Crystal hung in there during the quarter. They're a big food service business. They have a lot of their business to feed the chains in the fast food chains and those are doing well. In terms of particular items, chain by chain I'm sure they're looking for opportunities to hit a certain ticket point to drive traffic into their stores, but that's what they need. They need head count in there and it's a mixed bag of who's able to achieve that right now. Chris Bledsoe – Barclay's Capital: In your own mix of SKU's at the retail level in grocery, are you thinking about sort of altering your mix a bit to favor more chicken items to drive value to the consumer that way?

I don't know that its protein based. To me that's one of the underlying stories of success for us right now, that we're very pleased in this environment. If you look at grocery and you measure in terms of volume and dollars, we had volume and dollar increases on Chili, Spam, Dinty Moore, Hash, Chichi's Salsa, so pretty across the board. The only down items really were Complete and Bacon Bits and our Chunky franchise was kind of mixed with Valley Fresh Green up and Hormel down. So overall we think we have the right items that people are looking for right now. We're doing a good job of promoting in store and partnering with our retailers. Chris Bledsoe – Barclay's Capital: Since you've seen what was a frozen entree player kind of encroach a bit into the shelf stable category, do you also see an opportunity to do the reverse and make a name for Complete in the frozen entree space? Do you think that would test well with consumers?

You never say never, but I would say it's highly unlikely. We did have a foray into the frozen world in past year with what we had, a quick meal sandwiches and Mrs. Patterson's Aussie Pies. It's a very competitive area. Our experience was, you have to have some significant scale to be a player in that area, and we just didn't have it. And so when you think about it, you'd have to turn your whole supply chain, the trucks, everything else to run a certain way, and you don't have that kind of branded presence, it's unlikely to me that we would make that kind of a move with Complete. We think there is all sorts of room on the dry grocery shelf over time to offer multiple items and between that and refrigerated in where we're focusing our meals efforts.

Your next question comes from [Akshe Abdel – Keybanc] [Akshe Abdel – Keybanc]: I wanted to get back to a question Christina asked earlier. You talked about your internal expectations and segment profit overall being a little bit better and I wanted to take that back to the last conference call when we talked a little bit about refrigerated food, and I believe if I remember correctly, you said that for this full year you were expecting refrigerated foods should be flat or slightly up and this quarter it was down about 27%. So if you look at the overall, the comment you made was segment profits were down, but if you take it segment by segment, is it fair to say that the refrigerated food were worse than you expected and Jennie-O turkey was better and also grocery products were a lot better. I just trying to get a sense of, you beat by $0.09 and you haven't increased guidance and it seems like you're being very conservative and basically based on what's going on in refrigerated. I'm just trying to get some perspective on that for the full year.

I would agree with you that refrigerated did worse than we had thought and Jennie-O did better than we had thought. Grocery was kind of about where we thought it would be. And those are the big picture color items in terms of segment profit delivery. I guess what I was trying to allude to earlier in terms of $0.09, we can see on our end there's an element of below the line benefit we had with the Rabbi Trust year over year performance, with the tax rate change. Those things were favorable to us and added to earnings per share. Those come and go. Last year we ended up having a down year on earnings per share, but our segment profit results were up 6%. You live with your earnings per share number and this quarter our earnings per share reflected higher because some of the low line items. But that's part of why we're s ticking with our guidance, is we don't have an expectation of those staying below line gains quarter after quarter going forward.

Certainly we did not expect to see the pork packer margins turn like they did in January for us so that really was what led to the surprise on the refrigerated food side. [Akshe Abdel – Keybanc]: Just overall as you look at your company, there's always a debate whether you are a packaged food company or a protein company. If I look at you from a packaged food perspective and I look at your quarter, your results at the EBIT level were still better than the market was expecting but if I saw these same numbers for a packaged food company, I would be questioning the SG&A. So can you put some color around the flexibility you have in SG&A and how much of that packaged foods really is related to future growth and that was affected because you don't want to see a drop in investments towards your brand etc. So if you could comment on that?

The advertising ratio as a percentage of sales did go down a little bit but our expectation for last year advertising was higher than the year before. That's two years in a row. Our expectation for this year is that we will support our brands at a higher level overall. Sometimes the flow from quarter to quarter can vary a little bit. Otherwise, I think when you are looking at us modeling wise, and looking at ratios we have to concede that we have a balanced entity and there are elements of our business that don't have the margin returns that General Mills has for example. But that being said, I would say because of our balanced business model and you look at our track record, that we behave more like a packaged food company. We've had 24 up years out of the last 27. We're very branded oriented. We've very value added oriented. That's certainly how we look at ourselves.

The last time I did a comparison of our SG&A to our peer group which includes protein as well as packaged companies, we certainly weren't as low as the protein players, but we were no where near the percentage of sales in SG&A that some of the packaged food companies were so I'm a little surprised by that comment. [Akshe Abdel – Keybanc]: The absolute numbers are fine. I'm just looking at the change and the deviation relative to what the street was expecting and if you saw that kind of deviation for packaged food companies, generally people would be talking about quality for the quarter. I'm just trying to get a sense for how much flexibility do you have relative to a packaged food company and moving that SG&A number? But the comments were helpful.

At this time there are no further questions.

Thank you all for joining us today. For those at Cagney, safe travel home and I'll be available for questions after the call.