Adam Samuelson: All right, great. That’s all helpful color. I’ll pass it on. Thanks.
Todd Becker: Thank you very much.
Operator: Next question from Kristen Owen from Oppenheimer. Please go ahead.
Kristen Owen: Hi. Good morning. Thank you for taking the question. Just dovetailing on that last response. Todd, you mentioned in the prepared remarks that you’re planning to move a single facility or about 20% dedicated capacity to 60 Pro. So can you just talk us through what you’re hearing in the market that’s giving you the confidence that you can allocate that capacity to that that higher level protein?
Todd Becker: What we’re hearing is really preparing for shipments, hopefully in September to satisfy Q4 demand that we’re working on today in late stage negotiations. So we can’t just turn it on overnight. It takes about a week or two just to start to get the plant fully switched over from 50 to 60 Pro. We got to make sure that we work with our biology partners to make sure we have the adequate inputs that we need in fermentation. That just takes time. So a little bit you have to anticipate what stages you are in discussions, and when we look at the size of the discussions we have to convert one of our plans fully to 60 Pro is going to be the best outcome so we can satisfy it. It’s a bit of chicken the egg, when they want it, you better have it.
And I think we learned that in our 50 Pro is that we built inventories on 50 Pro and it took a little time to work through those inventories, but because we had those inventories, we were able to really start to get traction in the 50 Pro market. We’re going to have to do the same thing in 60 Pro. Start to build inventories later this quarter so that we can satisfy what we believe is demand. And we’re not just seeing demand from a standpoint of ship me a truck or ship me a tote or even a container. We’re actually starting to see enough volume that we’re potentially starting to ship pieces of vessels as well around the world. So there’s enough – it gives us enough confidence that it’s time to make a switch to one of our plants and have the product available in the market.
Kristen Owen: And just a clarifying question on that. We’re talking multiple customers and multiple end markets or just a little bit more color that you can provide on the customer standpoint.
Todd Becker: Multiple customers, multiple end markets, multiple geographies, some as big as vessel holds, not vessel quantity, not a full vessel. And even down to one truck at a time and we just want to be prepared to ship and be ready to go. We’ve been in significant trials, evaluations, you can go on and on tests, labeling all the things that are really important to our customers. We’ve been working on that for well over a year as we had been indicating to everybody. It takes – it’s a long process to get here. We thought it would take us three to five years and it’s as we said, it took us three to five months to make it. Now it takes about another year to kind of get through all of the evaluations. Because once we made it, it’s been in the supply chain, it’s been in evaluation and so far we haven’t really seen any market that has come back to us to say, hey, that didn’t work for us.
And so our opportunity and what we can propose to customers around everything from performance taste, as well as carbon intensity is extremely beneficial.
Kristen Owen: That all sounds very positive. One follow-up question unrelated. Just given some of the discussion around re-rating of the asset footprint and replacement cost. Any indication that you can give us on the transaction value for Atkinson? What we should anticipate in terms of cash on the balance sheet from that? Thank you.
Todd Becker: Yes. We’re in confidentiality with both sides of this transaction. And it was a smaller site and from that – and it didn’t have rail. I mean, there’s a lot of things on this site that didn’t match what we wanted. So relatively speaking, it’s not really a material transaction, but it’s definitely enough cash for our balance sheet that makes a difference as well. But we’re in really great financial strength without this as well. I mean, that’s just one more step. And as I indicated, our free cash flow generation, at least based on current markets, should pretty much cover a lot of our CapEx in terms of our growth initiatives, which really this leaves us in a very similar financial position at the end of the year, going to 2024 with potentially Madison or Fairmont getting their permit later this year, especially Madison, Fairmont will take a little bit longer than that.
So we just want to make sure we were positioned from the standpoint of being able to execute on where we can really make the money and be accretive. And that’s why we executed on this transaction. But we would not have put any of our technology at this site. So it really didn’t match our long-term needs.
Operator: Next question from Manav Gupta, UBS. Please. Manav, go ahead.
Manav Gupta: Hi. I wanted to understand a little bit better. We are seeing a rebound in corn oil prices, but we are also seeing rebound in animal tallow, soybean oil. So it appears all – pretty much all RD feed stocks are on up trend. Help us understand what’s driving it. Is it a function of the plants running a lot more reliably now ramp, or does it have to do something with the supply side also Argentina, just not being able to supply enough soybean oil, so the whole market is tight? If you could just talk about the dynamics of the RD feedstock market.
