Ted Jacoby III: [00:00:00] Coming up on the Milk Check.

Diego Carvallo: We’ve had a 28 or 30 cent nonfat rally in a matter of about 15 days that caught a lot of people by surprise.

Ted Jacoby III: Welcome to the Milk Check from T.C. Jacoby & Co., your complete guide to dairy markets, from the milking parlor to the supermarket shelf. I’m Ted Jacoby. Let’s dive in.

Ted Jacoby III: We are going to have a very focused market discussion. We’re recording this on August 24th, and the reality is, so far in the milk side of the business, things have been relatively underwhelming.

We’re expecting milk to tighten up. It has, but only in a very normal way, so nothing huge to talk about. Cheese has been a non-event. The cheese market is very quiet right now. We’re expecting it to stay quiet. But there’s been a lot going on in nonfat and a lot going on in protein. So we’re gonna focus on nonfat and protein today.

Diego, let’s go ahead and get started on nonfat. What’s been going on in the nonfat market, and what do you think is gonna happen next?

Diego Carvallo: It’s been a very interesting market, Ted. We’ve had a 28 or 30 cent nonfat rally in a matter of about 15 days that caught a lot of people by surprise.

We went from about $1.45 per pound to $1.75. And now we’re slightly below that. We’re close to the 1.70, but the CME spot market has remained at a premium. I think what led to this rally were a couple of things. One is when we got to 1.45, we became very competitive for skim milk powder.

And we know for a fact that a few of the large producers in the U.S. made very interesting sales for exports after having exported very little for this year so far. That helped manufacturers and the whole market, find some sort of psychological support to prices. And then, at the same time, we noticed how several of the manufacturers were in a relatively good spot when it comes to sales for August and September.

They were not having burdensom inventories, and they were pretty proud with their offers. So I think the whole market realized that Mexico still had a few shorts that they needed to cover. We made some international exports after not exporting for a while, so I think the whole market found some support and it rallied quite a bit.

I was also surprised to see that rally. I think we got to the $1.75 and we started seeing pushback from Mexico. We started not being competitive in international markets again. And I wouldn’t be surprised if we see a correction in the coming days. At the same time, there are some

rumors and also facts of production interruptions by some manufacturers. That also got people nervous, and I think that also contributed to the market rally.

Ted Jacoby III: What do you mean by production interruptions?

Diego Carvallo: There’s news that have gone around about some plants having recalls and some also production issues that have delayed [00:03:00] their releases.

That added to a market that was nervous already.

Ted Jacoby III: So, basically, a supply chain that has been relatively low on inventory to begin with, any kind of potential supply disruption such as another FDA recall or something that at least holds that product for a little while, the market’s just pretty sensitive to that, and that’s causing this extra volatility.

Diego Carvallo: Exactly. Yep.

Ted Jacoby III: Jake, what has this volatility been doing to the hedgability of our nonfat market?

Jacob Menge: We’ve seen pretty poor CME NDPSR correlation compared to history. I don’t know if poor correlation is the word, but if you’re in short-term hedges you have a coin flip here of how well that hedge is gonna work for you.

But in general the market’s actually been pricing in lower volatility than what we have actually realized. That’s over a multi-month period. So there might be a week where you are along for the ride of a really sharp move one way or the other. But in general I would say it’s been fairly functional, the market has.

Weird low volume in some of this volatility. I think that’s probably the one note is you’ll have really volatile markets like this. I would have expected better volume like we saw with our crazy run-up in February, March, whenever that was.

Ted Jacoby III: What do you read into the low volume?

Jacob Menge: Yeah, I don’t know. They’re numb to it now, after what everybody experienced in March, a quick little, 15, 20 cent pop doesn’t scratch the itch anymore.

The market probably was a little bit better covered than they were back in February, March. So, even though the pop happened, more participants could sit on the sideline without panicking yet. Now, if we continue at these prices for another month or something like that, there’s gonna have to be more buyers, and I would imagine that leads to some more participation.

Ted Jacoby III: Diego, how do you see this market playing out over the next three to six months? Do you think the volatility comes out of the market, or do you think we’re on this rollercoaster and we still gotta stay buckled up?

Diego Carvallo: I think we’re gonna still have volatility, Ted. And the main reason is Europe, which is a significant player for the SMP market has gone through very bad weather.

It’s gotten very hot. Solids in the milk are going down, and for that reason the cheese plants are having to use more milk. So, there’s fewer volumes of liquid milk hitting the dryer at a period where we have little inventories in Europe, so I think that’s gonna contribute to high volatility.

And the same scenario can be said of the U.S. We don’t have much inventory. The manufacturers are sitting in a good spot in terms of availability. They do not have too much pressure to sell. So, any type of disruption to supply chains, production, or any pickup in demand, it’s gonna result in big swings, both ways, not only up.

Josh White: I think that our seasonality has shifted. We’re already hearing rumblings that there’s some Ramadan buying beginning [00:06:00] to happen. That’s business not too many years ago didn’t happen until the first quarter. That helped create a outlet to clean your inventories before the heavy seasonal production for Europe and the U.S.

Now, that business is trying to get in front of Christmas business and Chinese New Year business, and it’s coming at the worst time, when the U.S. is in a short squeeze, Europe is going through a heat wave, New Zealand’s not yet completely online, and it’s keeping things tight. My personal opinion is that we’re drowning in nonfat within the first quarter. We don’t have anywhere to go with it.

This whole phenomenon’s been set up that we’ve been selling nonfat domestically somewhere that used to take skim solids. Somewhere in the margins, people are buying powder that usually interchange between powder or cheap skim, that it may have been buying skim more recently. Right now is the tightest time ever to be selling UF products, yet everyone’s responding with incremental UF production at the same time that everyone’s launching more UF competitive products.

That’s gonna be saturated at the exact same time we don’t have anywhere to go with powder. Q1 looks ugly to me from a skim solid standpoint. Ramadan is like the second week of February or slightly before, which means that Chinese New Year, they’re within a few weeks of each other. Last year they were already bumping into each other, but there was plenty of inventory.

Don Street: You get through October, typically we would say U.S. Christmas demand, certainly for nonfat, is filled at that point because you’re manufacturing things, cookies, crackers, whatever, and that would also be your lead time to ship. So, you could even see, if you’re right, this convergence to the downside in November, December, even before Q1.

Josh White: I think markets have been really smart, too. Whenever we find the points at which we think it happens, it seems like the market’s anticipating, and we’ve been trading anticipatory markets, and it’s moving a little bit in advance of that. This sounds really smart until you realize you’re already in it. I think we are already in it, and that’s created a little bit of the bump that we’ve seen right now as everyone’s trying to get in front of short covering.

Every sell-off I think is gonna be met With buying for the next month or so.

Ted Jacoby III: Everybody, we will be right back after these messages.

Diego Carvallo: I’m Diego Carballo with T.C. Jacoby & Co. T.C. Jacoby & Co. specializes in international dairy markets. For new customers that haven’t done business with Jacoby, I would tell them that we can provide them with many of the powders, dairy products that they consume, not only with the physical product, but we can also help them mitigate their risk.

We know dairy. We know the main players. We know the main providers for the whole value chain. We are one of the strongest players in the U.S. market because we have contact all the way from the farmer moving the liquid milk all the way to the end users that buy the end products. I am [00:09:00] Diego Carballo with T.C. Jacoby & Co., and we bring dairy to the world.

Ted Jacoby III: We’re gonna come back to nonfat in a second, but I’m gonna switch over to protein and ask Josh what he’s seeing in the protein market, and then we’re gonna talk about if there’s any relationship between the two. Josh, what’s going on in protein, whey proteins, milk proteins?

Has this market changed at all, or are we still on the bullish ride?

Josh White: I’m not really ready to call a change in the long-term trend, but the market has softened, particularly for WPC80 over the past few weeks. What’s difficult to read, is this the product of the summer holiday season and just a little bit of a Q3 slowdown in B2B buyer activity and are things fine on the consumer end?

Ted, it’s a tough-to-read market at the moment, but I would say over the last several weeks to a month, we’ve definitely seen more availability for products like WPC80 in the market, and the market’s really trying to digest that.

After many quarters of higher pricing than the prior quarter, we’re now in a spot where if you’re out there looking for an extra load or two, you might be able to achieve it at a price better than you did in the prior quarter or where your quarterly contracts are. It’s the first time we’ve experienced that in a while.

I don’t know that I’m ready to call that the end of the long-term uptrend in dairy protein, in particular whey protein, but it certainly feels like we could retrace a bit. Let’s take a peek at one or two variables that could be contributing to this. One is just the seasonality of it.

We’re coming out of the summer holiday season. A lot of buyers, particularly in the B2B transactions, have been away from their desks on their summer holidays and are now starting to return to the desk and take an assessment of how their supply chain and inventory situation looks. I don’t think that’s limited just to protein.

We’re seeing that across all of our dairy commodities. And over the last seven to 10 days, some of the activity with customers has picked up a bit. Secondly, we’ve priced ourselves out of the international market, or at least the European pricing and the U.S. pricing has achieved levels that have slowed down the international appetite.

And as a result, we’ve seen that reflected in our export numbers. Does that create enough incremental and additional volume for the U.S. consumer that puts us in a spot where there’s extra product available? And maybe we will see a little bit more of an aggressive offer to try to clear some incremental volume that was leaving for an international buyer previously.

Or have we actually tested a point where the consumer products have to increase their prices and the consumers are going to push back or are starting to push back? Anecdotally, talking to the people that are more more retail end-user-facing, it feels like their demand’s fine. It feels like they are expecting promotion activity for the fourth quarter. They’re not indicating any type of slowdown. We’ll see after a month or two where this thing settles out, but it feels like a few more incremental offers than it does customers pushing back.

But I don’t know that every manufacturer out there would [00:12:00] describe that the same. The market’s a bit confused right now.

Ted Jacoby III: Do you think that there’s been any changes on the supply side?

Josh White: No, not substantial changes on the supply side. I don’t.

Ted Jacoby III: So we might just be in that point where everybody’s looking at their inventories, right-sizing their inventories. If they have a few extra loads, they slow down their buying a little bit, but they’re gonna wait for the fall orders, which tend to be heavier than the rest of the year, to come through to see whether they need to do any more adjustments or if they’re good to go forward.

Josh White: There’s like a poker hand of possibilities right now. You know, on the one hand, we’ve seen more product launches and new product introductions outside of the traditional health and wellness or sports nutrition space than we’ve ever seen before.

Has that created a vacuum effect, and has that overstated demand a bit? Some of those products might win, some of those products might lose, but ultimately, to launch them, you have to produce them, and that creates a pipeline fill and a vacuum effect. Has that overstated demand? Am I right that we were just in a summer slowdown and people may have depleted their working inventories a bit, and we’ll see reorders happen over the next month or two?

Did we kill enough international demand to saturate the U.S. consumer and the U.S. market? Did we see enough incremental production that outperformed against forecasts? We just had the July milk production report released. In June, numbers were revised higher. We’ve got plenty of milk. I think most of us would’ve argued that July should’ve been a bit slow given all the heat we experienced in Middle America, yet we reported year-over-year milk production growth against very, very strong comparables.

Did we outperform our production expectations? Or has the consumer finally started to push back? And I really don’t know the answer to that, and I imagine it’s a combination of all of them. We’ll just see as we go into the fourth quarter what that means. The price responsiveness to some of these signals is going to change.

A larger percentage of this dairy protein, and whey protein in particular, is being used in applications that are relatively new to our demand profile. We’re seeing it added as an ingredient in snack foods and as an ingredient in food manufacturing-type products. That’s something that trades much differently than the quarterly priced sports nutrition market.

To digest exactly how shifts on the CPG level might reflect in what the current S&D situation feels like, that’s uncharted territory for us in a lot of ways.

Ted Jacoby III: You mentioned WPC 80. Has whey protein isolate been weakening in the same way?

Josh White: No, WPI has been well-reported to be pretty stable. I don’t believe that’s going to change in the short run. I really think the higher you go in terms of the value of the product at the moment, the more specialized and ingredient-based it is.

And it feels like the majority of the WPI is graduating into an area that has much less price elasticity than the traditional WPC80 products. So, at the moment, it’s held fairly strong. We haven’t experienced any major production shifts in WPI for over a quarter.

And as [00:15:00] long as we don’t test the consumer’s price tolerance anytime soon, it sure feels like they’re gonna hang in there and continue to buy the product and prices will remain firm.

Ted Jacoby III: What about milk proteins? Have we seen any slowdown on the milk protein side or has that demand stayed strong as well?

Diego Carvallo: It stayed strong, Ted. We’re actually seeing growing demand of companies and projects switching from WPC80 to MPC80, 85, and 90. There’s a greater amount of new projects asking us for samples on MPCs than WPCs.

What we have seen is that whenever nonfat moved from let’s say $2 to $1.45, the price of MPC also moved lower by a smaller degree, but it still moved a little bit lower because the manufacturers had the wiggle room to make their offers a little bit more competitive.

Ted Jacoby III: So, in the whey protein markets, one of the things we’re anticipating and we’re already starting to see is that for those annual contracts, the multipliers are probably gonna go up relative to the whey market, probably quite significantly.

Are we seeing the same thing in the MPC market as well?

Diego Carvallo: Yes. The multiple has strengthened. MPC 85, as a reference, it usually traded for many years at, let’s say, two and a half plus a premium of 70 cents, 60 cents, and I think it’s now closer to three times nonfat plus maybe another 75, maybe 80 cents.

It’s definitely strengthening.

Ted Jacoby III: Further production of whey protein is restricted by additional cheese capacity. So, unless we’re gonna build another big cheese plant, we may not be able to create much more whey protein production, at least here in the U.S.

Whereas with milk proteins, it’s easier and cheaper to switch over, let’s say, a nonfat plant and make it a milk protein plant. So, increasing that capacity is gonna be a lot easier. How’s that gonna play out?

Do you think that MPC multiples will stay strong even as we see added MPC production?

Diego Carvallo: I agree that there’s gonna be more supply, but I think demand is gonna be higher than the additional supply that we’re seeing, at least for the coming two to three years.

I think multiples are gonna be long-term stronger than they are right now.

Josh White: I take the other side in this particular instance. The UF side has a different demand profile than the dry product side with the RTD movement and so many launches and so much interest in ultra-filtrated liquid products.

That creates opportunity for the market to find some imbalances, and for the milk protein side to feel more commoditized seasonally. You’ve got a tremendous buyer in the cheese side that can step in and take solids and well support the multiple when it makes economical sense. But the profile for making UF or MPCs, relative to traditional nonfat and skim, could result [00:18:00] in more drying seasonally of MPCs that could make that basis a bit more volatile than what we’ve experienced in the past.

Ted Jacoby III: I’m anticipating that protein demand stays strong and maybe even continues to grow internationally. The demand for milk proteins will continue to go up because it’ll be slower to see whey protein production go up than these demand increases.

So, I’m splitting the difference between the two of you guys. I do think that we will switch over nonfat production to MPC production in various plants throughout the country, but I also agree with Diego. The demand is gonna be there. There’s going to be a lot of new products that wanna be able to say, “Hey, we have 30 grams of protein in our product, too.”

But they can’t really make it cost-effective on the whey side, so they’re gonna do it on the milk protein side. That’ll keep things strong. But the pressure’s gonna be there. Jake, do you have any thoughts?

Jacob Menge: None. Outside my Area of expertise.

Ted Jacoby III: Thanks. You’re a big help.

Jacob Menge: I’m just being honest.

Ted Jacoby III: Tristan, do you have any thoughts?

Tristan Suellentrop: Yes. At what point does MPC get expensive enough that you lose the substitution advantage over WP80?

Ted Jacoby III: Josh, I think you’re the one who needs to answer it.

Tristan Suellentrop: It’s a hard question.

Josh White: The simple math is the per unit protein value. We would start there. They’re relatively similar from a total protein value.

WPC80 market is trading between $12 and $13 a pound, and you’re about half that for your MPC 85. They are not the same product. They have different functionality characteristics and different nutritional profiles.

Similar in many applications, but different in many ways, which means when you rank the highest valued application for your whey proteins to the most competitive value for the whey proteins, the MPCs would need to compete in the final tranche of your traditional WPC consumer tier.

It means that MPCs do not need to achieve WPC pricing to start to get pushback. The pushback begins long before it achieves parity.

The MPC market has the opportunity to balance itself much differently.

The MPC can toggle between a dry product and a liquid product, depending on where that demand pull is. And right now the real growth in the dairy category and the superstar as of late has been the ultrafiltrated products. I think that most households have some version of this in their refrigerator now. It’s a growing category, but it’s also becoming a highly competitive market. You’re gonna see some volatility.

I think to Diego’s point, we are seeing some CPG applications and some sports nutrition applications reformulating where they can, but not on a one-for-one basis. They’re adding it as an additional ingredient or increasing the inclusion rate of the milk proteins relative to the whey proteins, but they’re not one-for-one interchangeable.

 We can afford to see MPCs go up several dollars a pound or WPCs come down several dollars a pound without eliminating the advantage to explore reformulation in MPCs for those that can use it.

Ted Jacoby III: Mike, do you have any thoughts?

Mike Brown: I just came back from Interstate [00:21:00] Milk Processors meeting. Lots of talk between the whey guys and the MPC guys on demands and expectation for further substitution of WPCs with MPCs where it can happen.

There’s places that really works. There’s places it doesn’t work quite so well, particularly in some beverages. As long as there’s a cost advantage, we’ll see it. It’s already happening in some of the protein ice creams, for example.

Ted Jacoby III: So, what’s the prognosis when it comes to proteins? Demand stays strong, but we continue to produce more concentrated proteins, at least on the milk side? How is it all gonna play out from a price perspective, let’s say in the next six months? Josh, it sounds like your thoughts are: we’re steady as she goes.

We’ve maybe reached a point where we’re range-bound rather than just ratcheting higher?

Josh White: I think you just walked me into a trap that is absolutely gonna blow up in about six or nine months when this podcast is still being played. But right now, the story is over the next six months, I believe we will see lower whey protein pricing.

Over the next six months, I’m not 100% convinced, but I would still call the milk proteins as bullish. What we need to decide then, was that a retracement? Was that a pullback in price? And with enough time, the consumer’s going to respond? Or are we in an unhealthier macroeconomic environment than any of us expected, and will that influence the dairy proteins or not?

We seem to have come out of the summer holiday, and people were spending. Now, I get anecdotal reports that the spending is slowing. People are running out of money, the disposable income is not readily there, and at the same time, we’ve achieved unbelievable price increases in dairy proteins overall, and particular whey proteins.

Does that at some moment come to a head?

Ted Jacoby III: I’ll go ahead and stick my neck out a little bit on this one. So, one of the reasons that I think proteins, and whey proteins in particular, have stayed strong even as our macroeconomy has weakened but not fallen apart, is the way I’d call it, is because the way that most of the population seems to be dealing with this inflationary environment that is causing their spending to be restricted is to cut back on their restaurant visits. They’re just spending less when they go out. And the majority of increasing whey protein demand that I’ve seen seems to be happening more on the retail side. Meaning, it’s happening in their stay-at-home consumption rather than their restaurant-going consumption, and that has helped keep that market strong.

If we start to see retail demand weaken because the economy gets even weaker, then I think we’ll start to see whey protein demand weaken with it.

Jacob Menge: The implication is actually equally as interesting that if the economy gets better, you would argue that also impacts whey protein demand.

You don’t go to a restaurant and order a protein shake.

Ted Jacoby III: So, the possibility exists that if the economy strengthens, we’ll also see a weakening in dairy protein demand because the meat protein demand would go up, but dairy protein demand could drop. Assuming [00:24:00] that the increase is a per capita increase rather than a total increase.

Mike Brown: I think the elasticity for the proteins is very low. Consumer demand’s gonna remain relatively consistent. It’s purchased for a different reason.

Again, back from the conference I just came from, there was a marketing person who said in GLP households, calorie count of purchases are down 30%, cost is down only 1%. So, people are definitely moving up the quality of food that they’re buying, and proteins play a role. I think rather than say the prices are going up or going down, I think where I see is that the spread between MPC and WPC is just gonna lessen, to some degree, as uses develop to replace when possible.

We’re at such high levels, what’s down? We go down to $9 on WPC 80. two years ago that was unheard of ever. So, part of this, I think, is a function of a changing consumer shift. Will that stay?

It’s hard to say. If people are feeling better about how they feel and how they live, I would say that demand’s gonna remain strong. What I found interesting is that lactose still sells. It seems like the whole dry complex is relatively healthy. As we talk in our industry, we’ve always talked for years about three, four spreads, and I think the thing we’re seeing is the demand for the protein side on Class IV milk, dry powder milk, is gonna keep those prices tight and often inverse compared to what history has shown us, just because that demand for protein is so strong.

Ted Jacoby III: One of the things that history has shown us is that people tend to take major market trends, like in this case protein consumption, and underestimate the significant macro shifts in those patterns. It’s been strong, it’s gonna stay strong.

How could we be wrong? Is there anything out there that nobody’s paying attention to that we think could cause a fundamental shift in protein demand relative to what we’re seeing right now?

Josh White: If we find out GLP-1s are dangerous, things will change fast. And I’m not crediting GLP-1s to this entire movement. I think that too many people actually give all of the credit to the protein movement, to the American adoption of the GLP-1 drugs. I actually think this is a broad movement that was overwhelming dairy’s ability to provide enough of the high-quality protein that the market demanded, particularly when it was on the cheaper end of its historical price curve several years ago.

Now, we’re in a spot where the market is moving in this direction, the health and wellness trend is a global trend, the science is behind dairy as a highly functional and digestible protein And then you have this catalyst of many Americans watching their diet better than ever before and wanting to enhance their total digestible protein intake and create an efficient use of the calories that they’re bringing in.

It’s the perfect storm. That being said, it’s the perfect storm that may have driven prices slightly above where we would’ve seen them without the intervention or addition of the GLP-1 user community. If that were to shift, it could take the entire final tier out of this price, and I don’t even wanna try to [00:27:00] define what that tier looks like at the moment.

Mike Brown: I think the bigger threat is through food science, no matter what it might be, is alternative proteins to milk. I think we can’t underestimate what may happen with plant proteins, for example, with time, with genetics. It gets down to a cost, and we all know the functionality can be very different, and to Josh’s point, nutrition can be very different. Does the price spread get wide enough? For example, if you go into the protein bars in your local Costco, the ones that are the lowest cost are the pea protein. They’re plant protein-based bars. The whey and milk protein are higher. I don’t think we wanna assume that it’s dairy’s business forever, ’cause there’ll be people looking at ways to get the taste, flavor, and to some degree the digestibility with alternative sources.

Just because if there’s a savings in the long run, they’ll try to do it. So far, I think the success has been kinda limited, but I wouldn’t wanna count it out not happening. There’s enough dollars at stake to make it worthwhile to look into that.

Ted Jacoby III: You know what, Mike? I’ll piggyback on what you’re saying, and I would say this.

If we step back five years and remember the time when all we were talking about was cellular agriculture and how you could create all this protein in a vat, and then that kinda just died off, and I think it died off because people found that it was more expensive than they thought to run that process.

However, innovative technology such as cellular protein tends to have, come in waves, where the first wave often will fail, but then people in the background will continue to work on ways to improve the process, make the process more efficient. And if another innovation comes along that makes it less expensive, all of a sudden you can see a big rise in, let’s say, whey protein-like proteins being created in a vat, a la cellular agriculture.

Mike Brown: It hasn’t popped like we all thought it was going to, or at least a lot of the industry did. I’m a former insulin user. I know what it costs to make insulin. It’s the same process. It’s kinda hard to make a digestible protein with that process and make it competitive cost-wise.

For example, take lactoferrin. That’s a different story. And- Mm-hmm … … as they get more efficient, will we move down the chain to more common ingredients or even supplements, too.

I’ve learned, with food science, just never say never, ’cause you’ll be surprised. Someone’ll come up with something that can make a difference. Meanwhile I think the demand for high-quality protein isn’t going away. I think we need to make sure that dairy remains the key source of that, ’cause right now it certainly is.

The high-protein products that are the most popular are milk protein based or whey protein based.

Ted Jacoby III: Cool. Thanks, Mike. All right, guys, before we wrap up, what conferences are we going to in the next couple of months? Let’s tell our listeners where they might be able to find us.

Diego, how about you?

Diego Carvallo: So, we’ll have a stand at the next show in Mexico City at the end of September. It’s called Banamex Mexico City Show. Would love to see you guys there.

Ted Jacoby III: Is that the one everybody refers to as FOOD TECH®?

Diego Carvallo: Yes, exactly.

Ted Jacoby III: Perfect. Yeah. Awesome.

How about you, Josh?

Josh White: The International Whey Conference in Chicago is in September, and we’ll have some people at that along with the ADPI board of directors meeting. And then shortly after as we get into October, SupplySide Global [00:30:00] is in Las Vegas, and we will be exhibiting in the ADPI section.

Ted Jacoby III: Excellent. Awesome. And I will probably be joining Diego at FOOD TECH®, and then Joe and I will be heading over to Food Ingredients Europe in November. So look forward to seeing everybody there. Hey, thanks everybody for tuning in. I hope this was a educational market discussion for everybody, and look forward to seeing you guys soon.

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