Noel Wallace: Yeah. Thanks, Jason. As you said, we have coming off of some of the challenging capacity issues that we had in the third quarter, we feel like we have certainly turned the corner on that business. Again, a double-digit growth in the quarter, that’s 27% growth on a two-year stack basis and we have delivered double-digit growth on the Hill’s business 10 to 12 quarters and we feel with the capacity improvements that we have and obviously the continued increased investments that we feel we are in a very good position to deliver sustained profitable growth moving forward. Now, as I mentioned, ag prices were just up 25% half-to-half. Now you take that on the year versus last year, that’s significantly more. I will let Stan talk in a moment to our hedging strategy, which is very minimal around ag prices.
So we don’t get a lot of — we don’t do a lot of hedging there. But, overall, it’s taking pricing. It’s making sure that we continue to move through the transition aspects of incorp — integrating three plants and moving capacity from our existing plants into those plants. So there’s startup costs associated with that, obviously, we are building a new web plant, which should open up towards the back half of the year. We have the startup costs associated with that running through the P&L. But all of it is around building investment ability for the future for us and our ability to continue to sustain the strong topline and the strong investment structure that we have by investing in capacity and allowing us to do the things that we do so well in the marketplace.
So we feel good about where the business is. Obviously, the ag prices will be where they are and we are taking pricing, as you have seen both in the fourth quarter and plan to take more pricing in the first half of this year. But, again, if ag prices come back, things will get better, but we at this point don’t expect any short-term benefits for ag coming back.
Stan Sutula: Yeah. Thanks, Jason and Noel. So what I’d add on to that is, we don’t have a large hedging program against ag and that’s a philosophy for us. So we look, we do partial hedges there in ag. We don’t do that in most other categories. But just while we have highlighted ag, there are other areas here like chicken livers, other specialty products that come in as part of the diets that make us more complex, as well as all the amino acids and everything else. Those have all had inflation as well. So while agriculture products have had the most significant, we have also had those and things like the AVM flu do have a ripple effect into the availability of those products. So as we look, we have also integrated now four plants through acquisitions, one from Nutriamo earlier in the year and then the three from Red Collar.
So we took those over on September 30th. That integration has gone well. But as you would expect, there are startup costs that go along with that. As we bring Tonganoxie online, that’s our new wet plant in Kansas in the second half of the year. We are very excited about that plan. It has great automation. It’s going to be, I think, a great addition to the portfolio. But that has startup costs in 2023, in particular, in the first half as we hire staffing, get the staffing right heading into or going live. So important here on Hill’s, we see a great market opportunity, science-based, our research center really supports that. We are investing the advertising behind that to drive that capability and to drive that demand and we think that serves us well for the long-term.
So we expect margin improvement heading into 2023 in Hill’s. We are excited about that market opportunity and what it represents to the company. We also think it fits really well in our overall portfolio with a science based approach.
