The Birds and the Bees at Three

This is a real conversation that happened after dinner tonight.  It made us laugh and we just had to have it documented.

Oliver: Daddy's don't have babies.
Mommy: Sure they do.
Oliver: No they don't.
Mommy: Says who?
Oliver: Quinn.
Mommy: Daddy has a baby, doesn't he?  He has Kellan.
Daddy: Someday, you'll have babies and you'll be telling them to eat their dinner.
Oliver: I want a baby.
Mommy: Ok.
Oliver: I want a baby in my belly.
Mommy: Daddy's don't have babies in their belly, only Mommy's.
Oliver giving a very confused look.
Mommy: Some Daddy's look like they have babies in their bellies but they just ate too much.
Daddy: Like Uncle Jeff.
Oliver, with a very sad voice: But I WANT a baby in my belly.

End of conversation, Mommy and Daddy walked away giggling.

When is it too early to explain the birds and the bees?  I'm three is not the time.