FEX Valuation, page-436

Reserve means nothing unless they can realise it in the form of sales.

As to whether they decide to reduce their production, I do not see this as likely due to things like plant capacity (efficiency at production etc), hedge covering costs, employee contracts, shipping and trucking contracts. Potentially they can reduce costs through increasing volume, not decreasing. They could also be in a better position to negotiate.

However, we will just have to rely on managements judgement and they've been spot on so far.