A thankless Job
Here's a pretty amazing and funny bit from the YUM call yesterday. For all I know, Glen may be the smartest analyst in the world, and a great guy, but trying to figure out cheese prices, and their effect on upcoming earnings, is about as thankless and worthless a task as I can imagine. I am SO glad I don't have his job.
Glen Petraglia, Citigroup - Analyst
Okay. And then just quickly on the outlook for cheese costs, I know it is notoriously hard to predict, but any sense that we might be seeing a peak in some of the dairy?
Richard Carucci, Yum! Brands, Inc. - CFO
Well, Glen, if you can forecast cheese prices, I think you definitely have another future ahead of you, but I think if you look, historically, it is hard to say if this year is going to follow the historical seasonality, but typically the cheese prices tend to peak kind of going into the September time frame and begin to drop off after that. I think the good thing about -- our team did a very good job. We laid out for you I believe 2.5% to 3% commodity inflation for the U.S. back in December which had some pretty solid expectations for cheese prices. And we're only a little bit above that right now based on what we see in the cheese market. Obviously we do -- we have hedged some positions as we always have said in the past, so that's definitely helping us, but we have assumed some normal historical trends, seasonality that cheese prices, some improvement in the back half of the year, and we're expecting a little bit more than like 3% and a fraction of total U.S. commodity inflation for the year with the cheese prices that we have...