Green Plains Inc. (GPRE) Earnings Call Transcript & Summary

Thank you for joining us for the last fireside chat of our conference. Today, we have with us Green Plains. We have Todd Becker, who's been in the company for almost 15 years, I believe, most of them as CEO, and we also have Jim Stark, who joined a year ago, I believe, a little bit over a year ago or rejoined actually as a CFO from Darling Ingredients. So they both are very knowledgeable on this space.

I think we're going to jump right into Q&A. And I'll start with the transformation story, which obviously is the big story here. And I want to take the opportunity to -- firstly, let's take a step back and review where do you stand on some of your major projects? What was completed late in 2022? And what is the -- where is your $200 million of CapEx for 2023 going?

Yes. So we have now fully converted 560 million gallons of our 950 million gallons or so of capacity. We have more coming on, and in process for construction starting this year, as well as our joint venture under construction as well. We are now beginning to fully run close to full capacity. We're starting to hit 800 and 900 tons a day, and that gets us into that 300,000 to 350,000 tons a year capacity. And we're still not even fully debottlenecked on Obion, which came on late last year, early this year. But basically right now we're producing all of the product. We're selling all the products. We don't have any real product nearby to sell. And if we kind of take a look at where we [indiscernible] and spec, 50% protein or higher. The customers have accepted this in many, many different categories from aqua to pet, to poultry to swine, as well as looking at the future of the rest of the year, kind of once we're in the ration, we have to actually put aside some of the forward production as well to stay in the ration. So we expect that when we kind of look at where we're at today, we'll have all the plants running. We think kind of March 15-ish is when we'll start hitting full capacity every single day for the rest of the year. And then bring on another plant hopefully later this year with our joint venture. So when we look at it, we walked into the quarter 140,000, 150,000 tons sold for the year, really holding back about 90,000 tons for continued inclusion in the rations that we're in already, and we'll have a little bit of capacity than yet to sell in the last half of the year. We only start to scale more towards our higher protein concentrations as well. So we have 560 million converted. We'll hopefully break ground on Madison as soon as we can. That's another 120 million gallons equivalent. The Tharaldson plant is 170 million, of which we own half of, and we're still trying to get our permit for Fairmont. So that's really the first part of our CapEx plan for 2023.

Okay. Perfect. Before we actually dig deeper into the high protein business, I wanted to check what are you seeing on the CapEx front and inflation? And I don't know if that's a better question for Jim, but you started this plant a few years ago, clearly, prices have gone up. Have the same debottlenecking and conversion projects going up in terms of CapEx, and to what extent?

Yes, with what we're building today, and what we built 3 years ago in Shenandoah, and then Wood River after that and Central City, it's leveled out. So it's leveled out and it's probably is going to start to come down a little bit on some of our future projects as well. We're starting to see -- at least the price of steel come down, labor has leveled off. So overall, I think our most expensive project would have been Mount Vernon, we hit it right at the top of the inflationary supply chain. And since then, everything has started to get a little bit cheaper. So the project will start this year, will be more somewhere in the range of where we started to the high point. So we look at Madison -- and a lot of that, we bought early on, a lot of that equipment is sitting there. We're just waiting for the permit. Once that permit gets issued, we're going to quickly build that. We think that will be our quickest build. We know how to do these very well right now. I think it's probably 7 months start to finish because everything is they're waiting. But from an inflationary standpoint, I think everything has come back at least under control. There's definitely some areas that have remained expensive. The bottleneck for anybody building anything like these type of plants in the United States or any other type of agricultural processing capacity is going to be electrical gear. That is still a long lead time item, and it's longer and it has not come down at all. I mean, we're basically putting in 12 to 18 months to order new gear. If you're going to start up any new project, you should expect that. And it's basically driven by a lot of -- there's not enough capacity to build gear in the United States. So you have to go to -- in some of our smaller projects like sugar, we could do specialty gear, which is faster, but the bigger projects that you need Siemens and others, that's really the bottleneck to build anything today.

Okay. Perfect. So going -- so you mentioned the volumes are going to have on high protein meal and already, you have the slide at what's kind of this margin uplift depending on the program. Firstly, can you tell us a little bit, give us more color on the pricing structure? Because one thing we've seen is obviously meal prices, let's say, soybean meal being the benchmark, have gone up dramatically in the past year and even since November, December. Are you pricing your contract relationship to benchmark as a, let's say, soybean meal plus basis? Or is it a fixed price? And what happens when some of the most marketable products like soybean meal will go up in price. What does this mean...

That's helped our overall margin structure. What we've seen is that -- listen, where soybean meal has gone up in the last 30 days to $470 or $500 a ton. We'll get some of that as well. But a lot of our product has been sold, locked in at that spread, what we indicated around $200 premium to DDGs. And then on top of that, we get our corn oil uplift over and above what we initially thought as well. So -- but in our spot sales that we get to make, we do get some of the benefit of some of these higher prices. But remember, it's all in relationship to the distillers grains pricing as well, and distillers grains has gone up as well. So the spread between high protein and distillers grain hasn't changed that much. I mean, you saw Nebraska in that mid- to high 270s or 250s. And then if you have a meal of $450 million to $500, the spread is still in that $200 a ton range. Earlier last year, we saw it really narrow in when the meal oil spread got a little bit out of whack, and it got close to $150 spread, and now it's closer to a spot; spot, $220 spread. But if you go look out on the curve, the meal market is highly inverted. So our backward dated as the energy guys like to say, it's highly inverted. And so once you get back out there, it's more traditional, $425 meal, $225 distillers grains, but we like it. Everything we did and everything we invested was based on about a $200 spread to meal -- premium to DDGs, yes.

Okay. And you're rolling out essentially some new products from your facilities as you did the trials with your customers on various types of feed, aquafeed, pet feed, can you tell us what are some of the comments you've got in terms of what was positive, what they like, but also any feedback they gave on what they would like you to do going forward?

Yes. What we do know is that our product is gaining wider and wider acceptance. And there was a lot of skepticism on whether we could actually sell our product. Well, okay, check the box and sold out. Okay, but we still like to achieve higher returns against our -- against this product, and we think it's worth more than EBITDA than we're selling it for today, but we'll talk a little bit about how we're going to get all that because that's going to really focus on a higher protein concentrations. What we do know is that whether it's in pet food, whether it's in aquaculture, whether it's in poultry, the products being now being pulled through. So we had -- I'll give you an example. If one customer said, put me in for 10,000 tons next year. That was in 2022 for '23. He's up to 90,000 tons and wanted to buy 50,000 tons more. So they're discovering something, and I will tell you what they're really discovering in our product, which differentiates it from other protein products, it's 75% protein and 25% yeast. It just tastes better. So if you're a chicken or if you're a dog or if you're a fish, it just -- they just eat more of it because the yeast increases palatability. And that's a unique difference in our product. And that's really what we're starting to see when we're getting second and third comebacks for more and more volumes. That's really what we're starting to see. I'd say the only issue there is that where we're going with our product is going to be really interesting because we really want to -- while we've gone after high-protein soybean meal equivalent type markets, we really want to go after -- the next step for us is to go after corn gluten meal equivalent type markets. The step after that is to go after soy protein concentrate equivalent market. So we know once we get penetration into this 50 pro base load, that's when we start to really focus on getting into that high 50s against corn gluten meal, and we have an advantage against them. And that advantage it's 25% yeast. It just tastes better. They just eat more of it.

I wish we could do a taste test, but I don't know...

Yes, it actually smells like bread. It's because of the yeast -- it's very yeasty, right? So traditionally, what a feeder would do was buy protein and by brewer's yeast. And they put it all together, and that's how they got the animal to eat the product. With our product, it's a one single product solution, which then they free up a bin to do other things. And so now they don't have to buy those 2 products, they need to buy 1 single product, and it takes care of it, and they can go use other -- use that bin for other reasons.

Okay. Moving to something else, I guess, that taste good. Clean sugar, dextrose. You're converting one plant, I believe, this year, York...

York is our semi works innovation lab and we're building our first clean sugar dextrose facility in Shenandoah.

And one thing is clearly that jumps out of your slide, I think is that you assume that the premium on ethanol gallon equivalent base would be $0.67. But you've talked also that right now, based on current market prices, it will be perhaps $1. So first of all, can you talk a little bit about this market and why are prices so tight, but also give us some background about what's the market size, what are your key competitors?

Yes. so what we always said is the holy grail, really, for a dry grind facility is can you make dextrose or not. And the reason we bought Fluid Quip Technologies, while the market thought we bought it for protein and got the dextrose technology, we actually bought it for the dextrose technology and got the protein technology. We always knew where we were going with this technology portfolio that we own and control this out of a dry grind facility. So traditional dextrose was made out of a wet meal is what they call it, where they fractionate on the front end and go after all these different products, and they make a lot more money than a dry grind facility, which has made 3 products traditionally, ethanol, distillers grains and some corn oil. What we have as a technology now is now we can go and grab and make dextrose out of a dry grind facility. And that's where we're building in Shenandoah. Today, in the U.S. alone, it's about a GBP 16 billion market and growing. We think in the next 10 years, it will double in size, at least or at least 50% to 100% higher in the next 10 years. We've said that, and we're seeing it play out. We're seeing dextrose pricing well above traditional prices because there is not enough capacity today in the United States to take care of all of the growing demand. It's everything from renewable chemicals, all the way to gummy bears and everything in between. And what the market isn't -- doesn't know yet is, what we can make is or what the -- or what we've told them is we can make 95 dextrose equivalent, we can make 63 dextrose equivalent, and we're going to make 43 dextrose equivalent. And that's kind of a water white flowing dextrose. And that will go into things, everything from jams, jellies all the way through candy and confectionery and everything in between. 95 dextrose equivalent, that goes into more alcohol products, White Claw, if you drink White Claw on the weekends, that's a lot of 95 DE is in that product as well. Today, in our semi works facility, we can make 95 DE, we can make 63 DE, and we've had a breakthrough to making the 43 DE as well. And that's really the holy grails can you make 43 DE? Any of those doesn't really matter. The market is high. The supply is not enough to take care of the growing demand. You're hearing it from the wet millers or the -- in the sweetener market, you're hearing already that they've passed on price already to the end user. They're getting the higher prices. And the great thing about what we do is we make it cheaper and it's a lower carbon intensity, significantly lower carbon intensity than what's out of a wet meal. So today, or what you said, what we based everything was on traditional spreads, a traditional mid-teens type sugar market against a -- where we would be able to make that product. That gives us about $0.67 a gallon uplift on converted capacity versus traditional ethanol margins. Today is mid -- high teens to mid-20s where you're getting -- and some additional product even trading higher than that. That's more close to $1 a gallon uplift. So in Shenandoah, for example, we're converting 25 million to 30 million gallons equivalent grind to go into our new dextrose facility. This isn't an in line. This is a brand-new on a stand-alone technology that basically will just pump the product into their -- and it know to make dextrose and it will do all the way through filtration and the color side. But really, what we're doing is, today, we're converting about 25 million to 30 million gallons of capacity and grind. It should make somewhere between 200 million and 300 million pounds of starting dextrose. We've designed it to scale it quickly to 500 million pounds with not a lot more CapEx. And if you take a look at that, that's 25 million to 50 million gallons equivalent at today's market will be $1 a gallon uplift from the margin opportunity versus ethanol. That's significant. The great thing is, we own and control that technology. And it is not easily copied or duplicated because it's very, very technical. And it's not something you're just going to start up and make sugar. We have -- we're hiring and attracting talent from all of the major wet millers. They're all coming to work for Green Plains today because they absolutely believe that this is where they want to make dextrose. It's very exciting what we're doing. It's -- we have a high confidence of success. What we learned when we stood up the protein business will absolutely apply now when we stand up our dextrose business as well.

And are there -- I think you mentioned, though, that given the size of the market, there are some limitation in terms of how much capacity you can convert here. What would you say is the limitation in terms of...

So I would tell you where we're going is, we can't wait for Shenandoah to turn on to think about where we're going to build more.

Okay.

So we're already thinking about today plant 1 and 2 and start -- almost start engineering to think about because when Shenandoah turns on, we have a high degree of confidence, much like protein turned on that will work. And when Shenandoah turns on, we have a high degree of confidence, much like protein turned on and that will work . And when Shenandoah turns out, we want be ready to know where we're going to build 2 and 3 and even have engineering and some site locations picked out as well. So that will get us to about 2 billion to 3 billion pounds of dextrose, or 200 million to 300 million pounds of converted capacity. That's how we're thinking about our first stage. That should be able to absorb into the market today. What we're seeing, we're getting calls all the time from people that want to buy 50 million pounds, 30 million pounds, 100 million pounds, but they also want to see our quality when we start up, much like protein. It's a little bit the same. Show us the product when you can make a lot of it. So when we start -- like today, we can make dextrose in York, Nebraska like you mentioned. It's our semi-works facility. We've made all the way up to 43 dextrose equivalent, the highest quality that you can make. We're thinking about crystal in dextrose as well. That's even more margin. So we're really -- we're taking the -- we've hired wet millers. We're putting our wet miller hat on in a dry grind facility, and we're attracting amazing talent that know how to make this product today. So, yes. I mean, when we look at it, we already have to start thinking today around plant #2 and 3 and getting the 2 billion to 3 billion pounds of capacity or converting 200 million to 300 million gallons of capacity for ethanol.

Okay. Perfect. Some other components of the transformation on the CO2 sequestration, firstly, the agreement with Summit, I guess the way it's structured is, while they pay for it -- or most or all of the CapEx, they would get, for example, 45Q credit, but you get the benefit of lower CI score and probably...

That's evolved a lot since we started the Summit pipeline project. #1, we're very excited to be on their pipeline. They raised $1 billion plus. It's about a $5 billion project. They've got 60% or 70% of the right of way already bought. The big thing for that is they have their port space in North Dakota, and they're drilling their wells, and they're drilling their wells already. So they have their capacity to store. There's nobody else today that has their capacity to the store. And the great thing is, in North Dakota, they have primacy, so you don't need an EPA permit. So you don't have to wait for the EPA like Illinois and other sites, and they're very supportive in other states, and they're very supportive of that. So our Summit agreement basically started out with a sharing of the 45Q and the carbon value, whatever we can get for carbon. What's evolved is IRA, an IRA has come along. Now there's the 45Z, which is worth more than the 45Q during the years, it's in place. On top of that, there's a carbon value. On top of that, there's some other interesting aspects of that. So the economics on paper have gotten better than what we had initially talked to the market about. We've left it at about $0.15 a gallon, which is the old economics of splitting the 45Q. For the first 3 years of this project, we probably won't even go after 45Q, we will go after the 45Z credit. And that's a much better economic outcome. And that's our first step to decarbonization. In some of our other sites, we'll look at direct inject. We'll look at some offtake agreements on carbon, those type of things. But the majority of our plants today will be on Summit, summer pipeline to start.

Okay. Perfect. Last one, a little bit quickly here on sustainable aviation fuel. You have agreement with Tallgrass and United. What are -- what's kind of the time line for the pilot plan. And also if it goes well, when do you think that could be commercialized? And what are your financing commitments in the next few years towards the JV?

Okay. I'll talk about the JV, Jim can talk a little bit about financing commitments. But for the JV, that is -- we are not exclusive on that technology. Just let's put that out there. We are looking at other technologies as well, other than the one we're scaling up. But the one that -- our sells in Tallgrass and United are scaling up, was [P&L] heavy technology. It's an ethanol to ketone, you skip the ethylene step. Easier to break the bond between carbon and oxygen than carbon and carbon like the ethylene step. So we're going to spend the next 6 to 12 months optimizing the catalyst between -- and we have an outside firm doing that for us. That's funded. It's not going to take a lot of funding to do that. If successful, and if we see that's a chance to scale it, then sometime later this year, early next year between ourselves, United and Tallgrass, we'll make the decision to build a pilot facility. And then post that, if that pilot facility is successful, then we'll have to make the bigger decision on whether we're going to build a full-scale plant or let somebody else do it. But we're really excited about this technology. But there's some really other cool technologies out there as well. And we're looking at -- there's 4 or 5 that are in the works today. I say some are really much further along than others. I don't know if you can pick a winner or loser, but I think the IRA is basically telling everybody go develop your jet fuel technology from alcohol. But if you would have asked me a year ago, is alcohol jet reality? I would have said no. If you asked me a year later, is alcohol jet going to be reality? I would say yes, because the IRA is in place and the airlines want to pull ethanol to jet forward. And they didn't even were thinking about ethanol jet a year ago and they are today. So it's a little bit of a -- government helped out a little bit, but the airlines are also saying, "Yes, go make that and we want to partner with you on it."

The partners and probably that year time frame where we were today, it's about -- it could be about a $50 million commitment that we would have to share in with our partners in the deal. So we have a go/no-go decision at that point in time. Any step along the way of the process, any of the partners have a go, no-go to go move forward with the partnership to get it to completion.

So that $50 million is combined?

Yes. That's a total $50 to get pilot, and you're basically, close to being about 1/3, 1/3. There's a little bit of differences. But in general, we're almost equal on our ownership. And -- but if it works, I'm sure that we will all find ways to fund that project.

Okay. Let's switch a little bit to ethanol because I'm sure people want to hear what's happened.

What's that?

And I'm wondering, firstly, versus roughly last month, when we discussed about the ethanol market, where do you see margins here? Natural gas, for example, is down. Corn, I guess seasonally down, are margins getting any better?

Margins are absolutely getting better. There's still -- we're -- from the lower lows, they are still low. But what we're finally seeing is somewhat of a turn starting to happen. And it was about this time last year that we saw the same thing happen. And if I could just talk through that a little bit. So this week, we saw a draw of 800 . On good driving demand at 9.1 in terms of gas demand this week. So we're finally -- maybe we start turning the corner on gas demand, summer driving season, the weather but has been somewhat mild. So I think we're seeing the consumer start to drive a little bit more. So that would be great if that happens in probably the next 3 weeks. And if we could see that happen, I think that ethanol is starting to make its climb out of the very serious doldrums we've been in for a while really since mid-fourth quarter. How we're looking at it, is last year, we were not very much actively hedging our book because of the fourth quarter of 2021, and the margins blew out, we were hedged and we were highly criticized for that. we probably should have actively hedged more last year. I would tell you this year, if we get an opportunity, and I do absolutely believe we will have an opportunity to hedge positive base margins not before corn, that's before corn oil. We'll have the opportunity to hedge positive, if not very positive base margins based on everything we see in terms of ethanol production this year. There's never really been a year you haven't been able to do that. We just weren't actively hedging our book as we were focusing on transformation. We're going to really look this year to be more like Green Plains' pre-2020, 2022. And when there's opportunities to hedge positive margins, we'll start to hedge very positive margins, and we'll start to hedge more aggressively. And I think we just want to lock in these baseload ethanol, so we don't have to have these discussions, when ethanol is minus 15 or minus 25 or whatever it's going to be. But this is a product that is still being used broadly. Take a look at what came out -- I think it was yesterday, the 8 states, the governors in those 8 states -- the White House is going to give them the E15 forever. You can blend all year around forever. And once 8 states go, our view is it's going to turn into 10 states and 12 states in 15 states. And ultimately, it will -- for the most part, roll out. We're seeing in any of the states blend E15 that have that ability to do that. Iowa was 12.5%. Minnesota is 12.5%. If we can get 7 -- 6 more states to blend 12.5% and then start to expand it from there, I think ethanol -- that's the starting point. The ending point ultimately is this ATJ. That's when we really start to see things change. But yes, I mean, it's been a pretty rough goal for the U.S. ethanol industry and natural gas is really high, now it's really low. A lot of people locked in their first quarter gas. So I mean, the market is working through some of that. But I think we're going to start to see the benefit of these lower gas prices in the forward crush. So I think, overall, when we kind of look at this forward curve, we're going to start to see some of the benefits of better driving, lower natural gas prices, spreads getting a little bit better every -- and then, every day, we've seen a slow climb out of the doldrums. It's not there yet, but we're -- every day where we have -- we're watching it, and I think we're going to make our way back to positive margins, at least on base ethanol.

Perfect. I have a few more questions. But firstly, let's see if there's anybody would like to ask a question. Okay. Well, more for me. So, firstly, a big challenge has been the corn basis, right? Essentially, it seems to me the challenge has come more from agriculture rather than ethanol. I mean, ethanol over $2 a gallon still a good price compared to where it was 5 years ago, but margins may be worse now. Can you talk a little bit about the challenges with procurement? And you know the whole situation with the basis for corn going to at some $1 [indiscernible] which is...

Yes. We're starting to see some relaxation of that so it's coming down. I mean, you can get your corn bought now and not anywhere near historical values, but not anywhere near where we saw the highs of last summer. But in general, corn basis was more volatile last year than the corn market in general. And once it went up to a certain level. I think that's coming down. I think we're going to see 90 million acres plus. I think we're growing our carryout in corn. I think more is available every day in the market. And if we get this farmer to plant a bunch of corn, he's going to look to these high prices, and we're starting to see really -- we're really meeting resistance up towards this high $6 corn market. And then every time we kind of get up there, it's being pushed back down and the curve is now inverting even more. So we'll have to watch closely, but it would be great to have good weather this summer, great planting and grow a big corn crop, and that will take care of a lot of issues. I think we're going to grow [Indiscernible] little bit. And if the world recovers as well, that would be nice. But I think it's -- that's not our big -- as big of a worry today as it was necessarily 4, 5 months ago, and we're paying 100 over in Southern Minnesota -- 120 in Southern Minnesota. So at least we have a shot at it. Ethanol, while certainly, it's over $2 a gallon, it's still $0.40 to $0.50 under gasoline on most days. So it's a great blend. If you look at the C-store results that are coming out, they're fantastic. Why? Because they're blending as much ethanol as they can, and getting $1.50 run on top of that and they're making a lot of money on the blend. And that's why we're starting to see more and more being pulled through. So yes, I mean, it's not just agriculture that's affecting this. I think that we really need to start to see driving demand recover. And hopefully, this week and last week, we saw really 2 weeks of good numbers that we really haven't seen since pre-COVID actually. Then [9.1] the last time we saw, it was this time pre-COVID.

Okay. I have 2 last questions, and we need to address them quickly. Even though unfortunately, they will take a long time. The first one is a little bit big picture. The transformation could be very successful in a couple of years and bring hundreds of millions in EBITDA. At the same time, $0.10 negative ethanol margin, let's say, core ethanol margin, would be $100 million negative and take a big chunk of it. What can you do down the road to kind of decouple from an ethanol business that could be in decline, let's say takes over.

Yes. So if worst case scenarios is $0.10, and we get to 60% protein on our platform, which I have a high degree of confidence we're going to sell most of our platform forward, not necessarily this year, we're going to sell some of it this year. We get into '23 or '24 and '25 and '26, I do believe most of what we will sell will be in that higher protein concentrations, going after the corn gluten meal market all the way through soy protein concentrate. That's a $0.30 a gallon plus. So we say negative $0.10 a gallon, plus -- and I'm not saying that's the margin, by the way, what we'll call it, for your illustration. Plus $0.30 a gallon across our platform, that's plus $0.20 a gallon. If on top of that, we get corn oil plus $0.15 a gallon, that's on top of that. If on top of that, we convert 2.3 billion -- let's just use 1/4 of our platform converted to sugar, 2.5 billion at $1 gallon equivalent margin, that's equivalent of another $0.25 a gallon basically is where over the whole platform, $1 a gallon over 1/4 of it. So on top of that, you're decoupled. We're decoupled at that point. Yes, we have a long way to go to get there, but you're decoupled. If ethanol goes to minus 20 or plus 20 you're decoupled. It will never get to a point, in my opinion, where it will go that deep negative for that long. Now we've seen it for quite a while here. But we're coming out of it. And then you get to ATJ, and it's game over. But I think we're going to -- what we're doing and everything we're doing is decoupling. I will say this, in our 60 million-gallon plants or our smaller plants, we have to really make the decision. If we can't put -- or in a state that won't give us a permit, if we can't put our technology around all of our plants, and we need to probably change our mix to go get plants, we can, put the technology around right away and maybe reform at our platform. We don't need those -- if a state won't give us a permit, we probably don't need to plant in that state, quite frankly, because we need to be able to put our technology. So we can -- there are some things we can do to optimize and maybe change around our portfolio. We're going to look to do that. The denominator just needs to get bigger. So like a plant like Central City, Shenandoah, Obion, those plants need to be expanded because there's protein there already, there's oil they're already and there's carbon. And if you all of a sudden can expand those each 40 million gallons at a very low expansion cost, you can get more protein oil and carbon and you start to really decouple. In the meantime, Q1, yes, it was a pretty weak ethanol margin, and we're in the process of. Q2 is really when we see what I believe will be full production at the 5 plants converted. Corn oil margins are hanging in there. And if we can get ethanol back to somewhere in that plus or minus either side, if not even positive in Q2, then I think people will really start to see the real earnings power of this platform. And we always thought -- I told -- I said to the market, I've said to our shareholders, to our stakeholders, to our employees, I can see inflection in its kind of Q2 of 2023 is really when inflection is. And you'll start to see how we can begin to decouple. And then come first quarter of next year, when we bring on Shenandoah into a sugar, which will take a little time to ramp up. So we can be excited about it. But we'll know at that point, the future of Green Plains and the ability -- and the earnings power because if we can go after billions of pounds of dextrose, you will see serious earnings power out of this company.

So the 20 second answer and probably the biggest question though. There was a recent call that the company should be taken private by an investor, setting aside the share price who could do that, from a company standpoint, employee standpoint and management standpoint, given the big transformation and uncertainty, would it make your job easier to just be private and not be -- not have to do a quarterly call every time and talk about ethanol margins?

Well, quarterly calls are so much fun that I don't know that we want to do that or not. Look, we listen all our shareholders. We have plenty of shareholders that want to see us go through the transformation. They believe our share price can go a lot higher as well as why they're committed to us. We understand that commitment. Does the company belong private or not? It's hard -- that's a hard question to answer. I mean, we're public today. There's no real path to going private. It's -- if somebody ever wanted to take over Green Plains, we're a public company, we're for sale every day, as I say to people, but we have lots of long-term shareholders that also want to see us remain and continue through the transformation and get rewarded for the commitment that they've made to us and the patience that they've had with us. And I think they're going to be rewarded. Look, there's still going to be a little bit of volatility to get to the other side of this, but inflection is coming. Late '23 and '24 is when we start to really see the benefit of sugar. And maybe at that point, we can take a look at it, but I think our share price will be a lot higher at that point. But we've done a really -- I think we're doing what we need to do today and everything else will work itself out.

Perfect. Thank you very much, Todd and Jim, and ...

Appreciate it. Thank you.

Thank you, everyone, for coming to our conference.