Todd Becker: Yeah, that’s a great question. I think from the standpoint of where we’re at in the evolution of our cycle, we’re not very happy with this latest share price decline, but we also want to do its best for all of our long-term shareholders as well, and a lot of people have been in the story for quite a while. As we said in our release, it’s not limited to acquisitions, divestitures, merger sales, partnerships and financing. It’s all of those we work on all of the time, plenty of those other than the sale process and the merger process per se. We just think there’s a lot of value to unlock here. We talked to a lot of our shareholders and Cora was one of them and I think we came to a good conclusion on how we’re going to approach the future.
I think they want to achieve as high of a value as they can for how they’re thinking about it, but so do all of our shareholders. So it’s not like we haven’t done some of these things, but I think when we look at Green Plains, we have a very powerful platform that we believe today is significantly undervalued versus our future cash flows and we’re going to have to test the market on that a little bit and more to come on that, but really at this point, I think what’s in the press release is what we’re going to say at this time, but being on the board and being a large shareholder myself, I strongly believe that there’s a lot of value to still achieve out of our platform and Green Plains, and we’re going to test that out.
Jim Stark: Well, Adam, I jump in and add one thing. I think what is different coming into ’24 than previous year is bringing in the partnership really is going to allow us to have more flexibility in what we want to do, particularly as Todd said, if we want to reposition our assets from an ethanol perspective, it’s much more easier for us to move forward. So the fact that that’s tucked in now and we’re back to a whole Green Plains corporation, I think it’s going to help streamline us how we can move forward on a variety of different things to me. So that’s what’s probably different today than maybe over the past two years.
Adam Samuelson: Okay. And if I could just squeeze one more in on decarbonization and think how you talked about a $100 million plus annualized run rate from the Nebraska plants once the pipeline started up next year. So am I interpreting that that you think that the net value from 45Z to your Nebraska footprint is something on the order of $0.30 to $0.40 a gallon and if that’s correct, kind of what are you assuming the CI score for your ethanol would be next year?
Todd Becker: Yeah, we have a couple of different plants. Some actually go right onto the 45Z, but one of our plants still stays on 45Q in those calculations. So there’s an upside because we’re looking at York and what to do is an old plant with a higher CI score. So they qualify for 45Q plus any carbon credits as well. So what we’re looking at first is York to say, how do we first decarbonize that plant and we think we’ll probably do it through distillation and significantly drop that. Carbon score, so we can actually earn more on top of that. So yeah, as a starting point, that’s what we’re putting out there with upside from there and some of it will be driven by 45Z, some of its driven by 45Q to start going to Z later on so those aren’t in the numbers and then on top of that, the more interesting thing that we’re seeing is the interest on top of LCFS because LCFS will see where that market goes to, but the interest in the voluntary credits from high quality carbon sequestration and we’re just kicking that off, but right now we’re seeing values in that $30 to $50 ton range just for good high quality credits from new projects like this.
But I think when you looked at what Summit was able to achieve at $100 a ton, I think there’s upside from there as well. So we’ll put a little bit out in those numbers, but overall you’re right to think about that, but if we can and so when we’re done, we think that like a central city’s carbon score will be somewhere in the mid-20s before you even get into pharma carbon and before you get into post-combustion carbon or some other areas. So that gives you an idea of our lowest plant. We’ll probably be in the mid to low 20s to start, but York will take a little bit more time to get there. So it’ll be a range, but mid-to-low 20s, absolutely we believe is a qualifier for anything that comes out of greed for SAF modelling.
Adam Samuelson: All right, that’s super helpful. I’ll pass it on. Thanks.
Operator: We’ll move to our next question from Eric Stine at Craig-Hallum.
Eric Stine: Good morning, everyone. Just a few questions on my end. Maybe just starting on clean sugar; obviously, Shenandoah coming online, that’s a near-term event. I’m curious what that does for commercial discussions. Do you have customers that are waiting on that and they need to see it? It’s rather short in terms of the time period and then they get going and take volume pretty quickly? Or is this something where you have a trial period and it’ll take some time.
Todd Becker: Now our product, it’s a little bit of both of what you’re saying. So for the food guys, we got to wait to get some of them want to see the plant, the product, what’s it running, get our final certification. So that always takes a little bit longer because what we can show them out of York isn’t necessarily what they’re going to buy out of Shenandoah. So food takes a little bit longer. On the industrial side, we have already been approved as a product in industrial processes with some of the customers we’re talking to and others are in final stages as well, and there has not been any negative feedback from the standpoint of anything industrial which is the largest quantities that we’ll start with that this product won’t work in their processes.
Obviously they want to see the first product out of Shenandoah but we are negotiating for shipments this year and much larger shipments in ’25 and ’26. We’re on multi-year negotiation taking place and we think we’ll get some of those completed in the next kind of 30 days to 45 days and it’s a little bit different, I think, than when we started out on protein because protein we were kind of bringing a new product on. It wasn’t soy 548, it wasn’t corn-gout meal somewhere in between, nobody’s ever used it. So that one took probably a little bit longer. On Greek sugar, on dextrose, it’s a carbon copy of what you buy every single day except you get a lower CI and even though maybe sustainability has taken a backseat in some stories, the buyers still want to buy a low CI feedstock because they’re still getting, for example, in industrial products, they’re still getting requests for them to lower their carbon score of their product as well so the retailer may be able to lower that.
So it’s a very different process for us. We just have to make the product now. It’s a 200 million plus capability per pound per year. We’ll start it up slow, but we’ll immediately go to 50% and then work to get to 100%. That’s kind of our plan. So this is the year where we kick it off and then as soon as we see that product come out, I think that gives us the confidence to say that we’re going to go full bore on where do we go with number two.
Eric Stine: Maybe just turn it into high pro. You mentioned that the international demand for 50 pro is quite high, but also talking about there’s enough demand that eventually you could be completely at 60 pro. So just thinking about that dynamic as the market kind of evolves and as you look at the market, do you think that those foreign markets will pay for 60 pro or is that more of a domestic sale when all is said and done?
Todd Becker: Well, first of all, on the 50 pro, what I said is we’re earning higher returns internationally than domestically at this point, but we’re selling to both markets as we develop our 50 pro market globally, but we definitely get a higher value for the product when it goes offshore. On the 60 pro market, I would say it’s a mix of domestic and export to achieve success. The active member that a lot of aqua is done globally, not necessarily in the U.S., so most of everything we do aqua other than some areas in the U.S. is going to be foreign. In terms of pet, it’s a combination of both domestic and foreign export markets and then also when we look at kind of, those are really the two big markets that were focused on 60 pro, but we have enough identified demand and in discussions that could take all of it.
If they all call today, we have some work to do to ramp up, but that’s actually, as we often laugh to ourselves, what if they all call today, right? So we have 50 pro on for the rest of the year. We’ve got things committed in pet for the rest of the year. So we have a team that constantly works every day with global demand to play 60 pro and again, it’s not a matter of if, it’s going to be a matter of when and it’s going to be a matter of how fast and as I said, I’ll say it one more time, we have enough identified demand to take all of our product. We just got to get it to that next point.
Operator: We’ll take our next question from Ben Bienvenu with Stephens.
Ben Bienvenu: So network capacity utilization at 95% in the quarter, very strong. It seems like the network is running efficiently now. I know you guys have had a lot of work that you’ve been doing through the transformation. As you look forward to 2024, should we expect a similar run rate as we move forward to absent seasonality and maintenance and the like? Or should we expect more variability as you commission or ramp new projects?
Todd Becker: No, our goal is to have this or better as we move forward. We think there’s more to unlock in our platform still. The January freeze, we slowed down a little bit, but it might cost us a point or two, but generally we’re back up and running this morning with everything running, every dryer running, every system running this morning. So, we had a team very — and we’re not done. We still have, we find things every single day. These are getting older, but we are pushing these assets as hard as we can and we think there’s more breakthroughs to come to unlock, more capacity just that we even have today, whether it’s moving enough corn, conveyors are getting old, those type of things. So we’re not done with achieving run rates.
Could there be a down quarter here and there? Sure, but generally speaking, from where we started the year to where we ended the year, made a lot of progress, but there’s a long way, still a long way to go and Chris and the operations team across the whole company understand that and are fully focused on getting the most out of our assets every day, but I don’t think you should expect that. Our utilization will go down.
Ben Bienvenu: As it relates to the review of strategic alternatives and kind of broadening the scope of what you look at, does that preclude you from, continuing to advance any of these transformational initiatives in terms of, hey, sugar, this first ramp in sugar is quite successful and you want to do a second one? Or is that not the case and it’s more a context for thinking beyond maybe some of the things that you’ve been doing already and it’s incremental, not constraining.
