Good morning. My name is Chris, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Boise Cascade's Third Quarter 2021 Conference Call. Before we begin, I remind you that this call may contain forward-looking statements about the company's future business prospects and anticipated financial performance. These statements are not guarantees of future performance, and the company undertakes no duty to update them. Although these statements reflect management's expectations today, they are subject to a number of business risks and uncertainties. Actual results may differ materially from those expressed or implied in this call. For a discussion of the factors that may cause actual results to differ from results anticipated, please refer to Boise Cascade's recent filings with the SEC.

Thank you, Chris, and good morning, everyone. I would like to welcome you to Boise Cascade's third quarter 2021 earnings call and business update. Joining me on today's call are Nate Jorgensen, our CEO; Mike Brown, Head of our Wood Products Operations; and Jeff Strom, Head of our Building Materials Distribution operations. Turning to Slide two, I would point out the information regarding our forward-looking statements. The appendix includes reconciliations from our GAAP net income to EBITDA and adjusted EBITDA and segment income to segment EBITDA. I will now turn the call over to Nate.

Thanks, Kelly. Good morning, everyone. Thank you for joining us for our earnings call today. Our third quarter sales of $1.3 billion were up 18% from third quarter 2020. Our net income was $91.7 million or $2.31 per share compared to net income of $103.2 million or $2.61 per share in the year-ago quarter. Third quarter 2020 results included a $10.5 million after-tax loss on extinguishment of debt or $0.27 per share as we refinanced our senior notes. At third quarter 2021, total U.S. housing starts increased 8%, compared to the same period last year. Single-family housing starts, the primary driver of our sales volumes, increased 5%. Our associates' performance was simply outstanding during the quarter and faced historic declines in commodity prices and ongoing challenges related to COVID-19. Our Wood Products manufacturing business reported segment income of $122.1 million in the third quarter, compared to $66 million in the year-ago quarter. Wood Products benefited from higher plywood pricing levels and improved EWP sales realizations and volumes compared to last year's third quarter. Sequentially, strong plywood price decreases were offset partially by continued EWP price increases, some resulting from prior period pricing actions. Our Building Materials Distribution business reported segment income of $16.6 million on sales of $1.7 billion for the third quarter compared to $107.9 million of segment income on sales of $1.4 billion at the comparative prior year quarter. BMD's results were negatively impacted by historic declines in commodity wood products pricing. Higher sales volumes in gross margin on our engineered wood and general line products helped to mitigate the negative impacts from the commodity price declines. Kelly will walk through the financial results in more detail, and then I'll come back to provide our outlook before we take your questions.

Thank you, Nate. Wood Products sales in the third quarter including sales from our distribution segment were $497.3 million, compared to $363.7 million in third quarter 2020. As Nate mentioned, Wood Products reported segment income of $122.1 million in the third quarter, compared to $66 million in the prior year quarter. Reported EBITDA for the business was $136 million, up from EBITDA of $80 million reported in the year-ago quarter. The increase in segment income was due primarily to higher EWP, plywood, and lumber sales prices, as well as higher EWP sales volumes. These improvements are offset partially by higher wood fiber costs and lower margins on inventory purchased for resale through certain customer programs. BMD sales in the quarter were $1.7 billion, up 20% from third quarter 2020. Sales prices increased 23%, offset by a sales volume decrease of 3%. The business reported segment income of $16.6 million or EBITDA of $22.6 million in the third quarter. This compares to segment income of $107.9 million and EBITDA of $113.6 million in the prior year quarter. The decline in segment income was driven primarily by a gross margin decrease of $100.5 million, resulting from a sharp decline in commodity prices during third quarter 2021. The negative impacts from commodity price declines were offset partially by higher sales volumes and gross margin percentages for EWP and general line products, as well as decreased selling and distribution expenses of $7.8 million. The amounts for unallocated corporate costs and other items impacting our reported adjusted EBITDA can be found in the tables of our earnings release. The net of those items was negative $9.2 million in third quarter 2021 compared with negative $15.4 million in third quarter 2020. The decrease was due primarily to lower employee-related expenses of $3 million, most of which relates to incentive compensation. Additionally, third quarter 2020 results included approximately $3.2 million of estimated business interruption losses absorbed at the corporate level related to disruptions at Wood Products facilities as part of our self-insured risk retention program. Turning to Slide 5, our third quarter sales volume through I-joists and LVL were up 21% and 2% respectively compared with third quarter 2020. Demand for EWP continues to be strong through the quarter fueled by increased housing starts. Pricing in third quarter for I-joists and LVL were up 16% and 14% respectively compared with second quarter 2021. As previously announced, price increases continue to take effect and certain temporary price protection arrangements expired. Turning to Slide 6, our third quarter plywood sales volume in wood products was 314 million feet compared to 316 million feet in third quarter 2020. However, plywood sales volumes were down 7% sequentially due to rolling curtailments taken to assist in balancing supply and demand and additional pandemic-related disruptions during the third quarter. The average plywood net sales price in third quarter was $561 per 1000, up 31% from third quarter 2020. However, not unlike other commodity wood products, plywood prices declined sharply during the third quarter, decreasing 36% sequentially. As we exited the third quarter, plywood pricing had stabilized, but price realizations thus far in the fourth quarter are still approximately 30% below third quarter average levels.

Thanks, Kelly. I'm on Slide number 12. The demand environment for new residential construction continues to be favorable, supported by low mortgage rates, continuation of work from home practices by many, and demographics in the U.S. We expect strength in residential construction activity to continue for the remainder of 2021 and into next year. The October Blue Chip consensus for U.S. housing starts is 1.59 million for 2021 and 1.57 million for 2022. In addition, the age of U.S. housing stock and limited home inventory availability will continue to provide a favorable backdrop for repair and remodel spending. Although we believe the current U.S. demographics support the level of forecasted housing starts, and many national homebuilders are reporting strong near-term backlogs, labor shortages and supply-induced constraints on residential construction activity may continue to extend build times and limit activity. In addition, the pace of residential construction and repair and remodeling activity may be affected by the economic impact of the cost of building materials and construction, housing affordability, mortgage interest rates, wage growth, prospective homebuyers' access to financing, and consumer confidence as well as other factors. Demand for EWP remains strong, and pricing efforts on EWP have maintained traction and will help offset impacts from lower plywood pricing. As always, we'll continue to focus on innovation as a means to mitigate rising input costs and help address labor shortages. In BMD, the demand environment remains good across our customer base, and our inventory is well positioned. We're excited our Houston door assembly operation and our Nashville expansion are operational and appreciate all those in BMD and our corporate teams who have contributed to those efforts. Our balance sheet continues to afford us the ability to pursue further growth opportunities within BMD.

Good morning, Nate.

Good morning, Mark.

Just to start out, guys, I wondered if you could just talk with us about EWP pricing. I mean, your sort of sequential increase was quite a bit smaller than one of your big public peers that reported at the end of the last week. I wondered if you could just help unpack at least a little bit. I mean, how much is timing and mix? I think Nate, you mentioned the end of some price protection that was out in the market. So just trying to think about the difference and also to think about what kind of lies ahead over the next couple of quarters? I know that EWP prices always take three or four quarters to roll in?

Yes, Mark. So yes, I can't speak to the comparison of us versus the period of reference, I mean, in terms of what the timing, what the announcements they had, and maybe what mechanisms they have down the channel in terms of rebates and whatnot. So I can't really - I wouldn't venture a guess to compare on that. But in terms of specific to us, yes, we did see sequential got to 14% to 16% across our product lines, and we feel good about that. And I would say looking forward, I'd give you a little guidance here for the next couple of sequential quarters Mark that would be mid-to-high single digits as we move forward from here, as we continue to kind of layer on and get the benefits of the announcing increases we've announced and the price protection mechanisms kind of roll off.

And Kelly, just to be clear, is that mid-to-high single digits sequentially for a couple of quarters?

Yes, Mark.

Okay. Is it possible, we don't see a lot of announcements typically around sort of EWP capacity? Is it possible to get some sense of what's out there on the horizon? I mean, I know that a big privately held company from Oregon put a new facility in South Carolina a little while ago. I think that is up and running. But can you give us a general sense of what is out there incrementally in your business lines and EWP?

Good morning, Mark. Yes, it's Mike. Good to hear from you. Yes, so the facility that you just referred to, I would say that they are up and running, but certainly not running at anywhere near capacity from what I hear. I'm not aware of any additional incremental EWP capacity, if any significance that is being thought about or brought online at this point in time. I would say that most that are in the EWP manufacturing sector, continue to struggle with the same issues that many others are struggling with, namely not always being able to get the workforce that's necessary to run all the equipment as well they might like. And particularly in the EWP area, I've spoken about this previously, there is a shortage of the types of veneer and the types of fiber that's necessary to make those sort of products. There has been a little bit more of that become available since plywood prices declined. But it wasn't a huge transformational sort of shift in availability. So maybe a little bit more about EWP has been produced now than then, let's say 6 to 8 months ago, but there's no big projects that I'm aware of that are on the horizon to add additional capacity.

That's helpful. Mike. I hadn't seen anything. But again, it's a little harder to track. I think, in general, the last question for me the distribution results were quite a bit weaker than we expected. Can you just talk about the drag from falling commodity prices and sort of any losses on inventory that you might have taken during the third quarter?

Yes, sure. Mark, this is Kelly, I'll take first crack at it and others can jump in if they want. So, you may recall from our comments when we were speaking to you about the second quarter, we had roughly a $12 million LCM that we recorded against BMD's inventory at June 30. And then I would tell you, and if you look at the commodity price crash that you're well attuned to, prices fell substantially from July through August before finding some stability in September. So I would say from terms of - there was a lot of wreckage in our income statement in BMD in July and August as we were turning our inventory, and I would say the team did a nice job of liquidating turning that high-priced inventory. And so when we get to the end of September, we don't have an LCM. We've moved our high-priced inventory. And we - as I alluded to in the comments, we feel good about our position, and that we can return to normalized levels of gross margins as we move through the fourth quarter.

Mark, maybe just another quick comment on that is, I think, as we look at the quarter, as Kelly described, I think we feel good about our inventory position. And I think as we think about the probable dependency some of our customers will have on distribution, we see that continue to grow. People, I think are a bit more measured on their working capital. And I think that speaks incredibly well to support our distribution business. So as we move forward in the quarter, we feel good about our inventory position, but also feel good that maybe some of the dependency from the marketplace will actually increase as we close out 2021.

Okay, that's helpful. I'll turn it over, Nate. Thank you.

Thanks. Hi, everyone. Good morning. Thanks for the details. Hope you're doing well as outgoing.

Good morning, George.

Hi, good morning, George.

Congratulations on the quarter. I want to dig in a little bit to EWP and what you're seeing given the very good pricing traction that you're getting. And those are getting in the market relative to any competing activity, maybe loss of share if any at all to traditional dimensional lumber, since obviously, lumber prices are low. Are you seeing any effect of that in the market right now? And then kind of a related question, your customers are having to deal with labor shortages. They're obviously getting higher prices on their homes, and they're happy about that. But at the same time, there is some boomerang effect that could happen from that on demand at some point. So what are your customers doing in terms of their plans for building next year that could either benefit or retard some of the business trends that you'll be seeing in 2022?

So let me - I think there is a two-part question there, George. Let me take the first one, and then maybe I'll pass it to Nate on the second one. So the first one in terms of EWP pricing relative to the 2/10s, for example, and do we see some sort of a shift if you will away from EWP and that sort of environment. We really don't. The demand environment - the order file for EWP is still solid. And as you reference, your labor is a challenge. And so the national home builders for them EWP on the job site is a much more efficient product to install. And so we really don't see them transitioning back. Might there be some small things on the frames that might change? That might shift a little bit now and again, I suppose, but on a broad scale, we really don't see it.

Hi, George, how can you maybe on your second question and maybe some of the trends are kind of what customers are describing to us. I think what we're experiencing as we close out '21 and head into next year is probably more consistency. And in terms of the kind of the cadence of housing starts, I think builders have done a good job of kind of matching the industry's capabilities on a range of products and services to their demand. And so I think that stability and cadence has practically improved as we close on '21. And I expect that to be a theme as we head into '22. In terms of their markets and kind of what we're hearing or experiencing from them is, I think the things that they're looking at or the things all of us are looking at relative to interest rates and affordability and such. But in terms of the momentum and the confidence, I think, across many geographies, across many price points in single-family, multifamily, even like commercial, I think there is good confidence as we close out this year and headed to next year. And again, I think that's getting supported by a range of builders across a number of segments. So I think we feel good about what is in front of us in '22. And I think it'll have a similar maybe look and feel as we close out '21, again, around kind of cadence and what we're experiencing in the market.

And it would just quick follow up on that. Are you hearing from your customers that they're seeing a lot of discussion on this earlier in the year and in 2020, the addition of home office space on homes, the addition of rooms and square footage for home schooling facilities if you needed it, you know, if we're in another lockdown, or you're seeing a drive towards different floor plans or smaller homes, any other thoughts around that? Recognize he said it's going to be pretty consistent, and then had a quick one on mass timber, what are your expectations for the growth there? And if you could talk a little bit about your relative level of interest, which seemed to be relatively high last quarter on mass timber and the developments there?

Sure. Yes, I think in terms of kind of the home footprint and what people are looking for, I think the flexibility and kind of the optionality continues to be a theme, I think it's maybe settled down a little bit as things like schooling have gotten maybe a little bit more normalized, and maybe there is a little bit less pressure than there was six months ago or certainly 12 months ago. But I think in terms of the flexibility of the home and what the home needs to deliver behind a living space, it also as includes your point maybe a home office, some schooling, that kind of the recreation component. We think some of those trends have been in place and will continue to be in place. And it's something that we're kind of watching carefully and closely. In terms of mass timber, I'll make a quick comment or two, and then hand it over to Mike Brown. Yes, we continue to see mass timber as an important solution. In terms of like commercial or high-story construction in the marketplace. We think it solves a number of problems on the job site, as well as obviously the kind of like the carbon capability that wood construction brings as compared to steel and concrete. But Mike, do you want to add any comments in terms of kind of where we're at and how we're thinking about that opportunity as we move forward?

Yes sure, Nate. So I guess, George, I'd add that we're sort of watching with great interest the investments that have been made by some others across the United States, some U.S.-based companies, and some from offshore. And we certainly looked at with great interest at some of the opportunities that have come to market over the last six to 12 months. But at this stage, we're sort of in that watching, wait and evaluate position. If we believe we firmly believe that there'll be opportunities in the future, whether we decide to do it through organic or through acquisition. It's just a matter of timing, and we'll see how that progresses over the next 12 to 24 months.

All right, thanks. I'll turn it over guys. Thank you.

Hi, everyone. This is Charles Perron in for Susan today. Thanks for taking my question. First, I just want to circle back on to BMD and looking at the EBITDA margins going into Q4. You mentioned that margin should return I think at normal levels. And given the recent stabilization in commodity prices. Do you think margin performance similar to Q4 a year ago is realistic at this point given the current conditions?

Yes, so if you looked at Q4 a year ago, BMD reported gross margins of 13% and EBITDA margins of 5.5%. I would say if you look - for us a lot of it's going to be about what is the - now what the relative value is of commodity pricing, but very much what is the trajectory? Is it up? Is it down? Is it sideways? And so that will have a large influence on our results in the fourth quarter for BMD. But yes, if we find - if the stability we've seen so far in the fourth quarter holds, and then I suspect EWP and general line will remain firm. Yes, I would say that gross margin of 13%. That might be that's probably achievable. That's a little bit higher than what we've seen in some normalized periods. But certainly, we should be well above the third quarter results that we just posted.

Got it. That's very good color. Thanks very much, Kelly. Just a follow-up on the DIY demand, some of your peers have commented on pickup of activity post-Labor Day. I was wondering if you have seen similar pickup and activity on the lumber side so far. And what our expectations as well going into year-end?

Hi, Charles, it's Nate Jorgensen. I think in terms of the - it's your point on the do-it-yourself. Obviously, the third quarter was a bit of a roller coaster, in terms of they were somewhat vacant early in the quarter. And I think, certainly, there was good strength and stability as we finished the quarter with that customer segment. And I think we're experiencing that today across the range of products and services, across each of our geographies. So I think in terms of our expectation on the repair and remodel segment, especially the professional remodeler, we feel good about how they're thinking about the balance of this year and into 2022 as well. So I think again, that little bubble that we experienced in Q3 with that specific customer is largely behind us and feel good about the momentum that was today.

Thanks Nate for that. And just if I can squeeze one last one. Looking at your CapEx guide for next year, it looks like it's up quite nicely versus this year. I now understand the variability in there, as you mentioned in your prepared remarks, but any project that you want to highlight or any area of your business where you think you want to be adding capacity given the current market conditions?

Yes. So Charles, let me start and then I can let others jump in as they see fit. So I would not reference that increase in terms of adding capacity. What I would reference it as is really part of our capital allocation strategy, which is to invest in our existing asset base. So in what products, we're certainly going to try to accelerate a little bit and some replacement and infrastructure type spending. And that's all about for us, as you've commonly heard us supporting our internal veneer capabilities. And so there's some projects in the Southeast we want to get done. There's some replacement infrastructure work at Oakdale plywood and veneer plant, for example. And then we do plan on replacing a dryer at our Chester, South Carolina facility. So we do expect to get maybe a little bit of cost savings and some efficiencies, obviously, for doing that spending, but it's not about growing capacity. And then on the BMD side, typically one of the big buckets for them is going to be rolling stock. So tractors, trailers, high stirs, and then we're going to have racking and paving. And then we have a few organic opportunities that are embedded in BMD spending in 2022, that we think are going to happen. It's a little too early to specify what those are. But it - but for them, it's a fair bit of rolling stock and a little bit of organic growth in existing markets that we have today. I would say, given the broadness of the range that's purposeful, as I mentioned in the comments, just because of the supply chain challenges that we see throughout the world today and for example rolling stock, we - I suspect that we may be challenged to bring in as many tractors and trailers as we would like to just given the constraints in the chain.

Now it totally makes sense. I appreciate the color. Thanks for your time.

Thank you. Good morning everybody.

Hey, Reuben. A couple of questions on BMD maybe first on the volume front and if you answered this in your prepared remarks, I apologize if I missed it, but the volume decline that you saw looks like quick math that it largely came on the sort of the commodity products that you sell. How much of that? I guess can you just talk about the volume decline? What was the driver there? Was that you guys just kind of being cautious with inventory with where prices were and maybe missing or intentionally missing out on some business to not lose money just talk to me about the BMD volume in the quarter.

Hey, Reuben, this is Jeff. I'll start on the commodity side that you've spoken up. Towards the second, end of the second quarter, and in the middle of the second quarter, you could see what the market was going. And so I would tell you absolutely, we took our foot off the gas on what we're purchasing, trying to get our inventory for the big decline. And we spent the entire quarter trying to move that inventory out and repositioning ourselves. On EWP in general line products, we are in an incredibly constrained supply environment. And with product we have, it really, really is hard to grow and to take shares. Our ability to really expand that would be limited. I think we did a great job with what we had, but our opportunities are limited there.

Okay, and then on the margin front in the quarter. Can you remind us what the lag is from the commodity moves to when it flows through to your business? For some reason, two weeks to stick in my head? So in other words, I think that the price decline for commodities started, especially for lumber started late in the second quarter. And the stabilization kind of started in September, you wouldn't have seen much of that you basically dealt with a declining environment, the entire quarter in your P&L, does that right?

Yes, certainly, yes. The lag you may have heard referenced in the past is maybe a little bit more like on our wood products business in terms of plywood and have an order files. And so we didn't see the substantial decline in July in our wood products results. But in terms of BMD, as you know, our distribution customers are obviously very educated and they understand where the market is. And so yeah, that's pretty real time, as the market starts to tip over, our inventory loses value pretty quickly, and we have inventory on the ground. And we've also got inventory rolling at us. So it takes us some time to get out of the way of that.

And we've heard that there's some shadow inventory out there. Inventory that maybe you guys have on the yards or your customers have on the yards that's already spoken for. What's the supply-demand environment really like today in the industry from a commodity standpoint?

Reuben, it's Nate. I think in terms of some cases, customers may have projects, and they'll place orders for products and services. And that's maybe not uncommon in areas like multifamily or hotel motel construction, where they'll buy kind of blocks of material. And that'll be delivered over a series of weeks and months. So sometimes that is maybe the element of inventory that is sold, but hasn't yet maybe shipped. I think in terms of inventory levels overall. I think, again, there are certain products and services that remain very constrained. As Jeff described, general line, EWP remains challenge. I think across the channel. And so we don't expect that likely to really change as we finish off this year and head into next year. And I think in terms of commodities, it feels relatively balanced, based on what we can see today. Obviously, there's seasonality that'll factor into it, but I think customers are looking at year-end and making sure that they're measuring in terms of what their inventory footprint is, in some cases for tax reasons. And so we see maybe a little bit more deliberate approach as we finish off this year. And again, in terms of overall confidence on demand, as we close out this year, heading into next year on residential construction as well as commercial. I think, again, confidence and good momentum as we close out this year, again, recognizing whether it could have some impact on that as well.

Great. Thanks, guys. Congrats on the quarter and good luck navigating through the rest of the year.

Thanks. Yes, just a few follow-ups. Actually first on the Building Materials side, are there any pieces of the Building Materials market where aside from commodity lumber panels, where you've actually started to see an easing in any of the supply constraints?

Hi, this is Jeff. Mark, I will tell you we really have not, it has just continued on and with no end in sight and on top of that, we're seeing the transportation issues really ramp up as well, which is causing more and more problems.

Yes, okay. Great to hear but it's good to understand it. And then Mike can you talk about order of magnitude, COVID disruptions in the third quarter and what you've seen so far in the fourth quarter seems like you've had some issues over the last several quarters, particularly down in Louisiana, but maybe down in Southern Oregon as well?

Yes, sure, Mark. Yes, you're quite correct. So, in the third quarter, I'd say the month of, I guess it was August. But my memory is correct was the worst month that we've had since the start of the pandemic in terms of number of direct COVID cases, obviously, that would needed to be quarantined or throughout contact tracing. So it was a really, really pretty tough month. But I'd say in general, since then, there's been a steady decline in the number of cases. So we're in a better position, you want to call it that today than we were a couple of months back. In terms of how that impacted our manufacturing operations, yes, it certainly did reduce our potential to produce all products. But you understand the way we run our integrated model. So I would say as a very, very high-level rough rule of thumb, maybe we lost maybe 5% of our production, but it was sort of spasmodic, in different mills at different days, different weeks. And so what we tended to do was, juggle that crew we have in each of the locations to sort of cover each of the machining centers to maximize the production that we could with the patience that we had. So at the end of the day, it wasn't a huge impact to our manufacturing on a volume basis. But our associates did a tremendous job. And they worked a huge amount of overtime. And I think that's really how we managed to get through the quarter without seeing a more significant reduction in our manufacturing volume.

Okay. And, Jeff, did it have any impact, would you say in the third quarter in business?

No, I would tell you, the business itself, the impact was relatively associates, it didn't impact on what we could do. But there always felt like, there are a few people out, and so we were relying on the other people to pick up for them. And they did that. So, just kind of what Mike said, as well, our associates did an unbelievable job carrying that water for each other, but no real impact of the business other than that.

Okay. All right, that's helpful. Hey, last one, I'm just curious, we are seeing kind of this continuing trend of consolidation in the Wood product sector. And I wonder if that's having any impact on your business, particularly the distribution business, I'm very conscious that one of your longer-term kind of strategic partners was involved in a transaction earlier this year. So does that can you just talk about any kind of potential ripple effect this process is having on door business?

Mark, it's Nate. I think in terms of the consolidation, I think that's something that we've obviously to your point have seen and really have expected, kind of throughout the channel. I think for us, for Boise Cascade, I think one of the things that I think we've been able to deliver is a level of consistency and predictability on both businesses for a period of time. And so when there are changes in the channel, and consolidation, I think we represent that level of consistency and predictability that I think our customers and our suppliers really depend upon as we go through this. So my view is that we'll likely see more consolidation, more things happen, but in terms of I think, our consistency in terms of who we are, what we do, and putting our plug in our balance sheet to work, I feel good about how we're positioned and what we can do in support of our customers as we move forward.

Thanks. Hi guys. Just a couple of cleanups for me. One, if you hadn't mentioned already, can you just talk a little bit about what you think wood cost will be into fourth quarter and to some degree, if you have any kind of view, I reckon it could change quite a bit into the first quarter. And then can you update us on what you're seeing right now in terms of imports of plywood from South America and to your key markets?

So I think George, it's Mike. Last question first. So if you look at the import volumes of recent time from Brazil, they've declined massively. So that would be last data I saw was September, and I think the import volume from Brazil was like 55,000 cubes. That was down by about two-thirds compared to the highest volume which I think was a couple of months before that it was like 165,000 cubes in maybe July. So it's come up very, very considerably. However, if you look at the year-to-date number, it's actually up like 30% year-over-year. So a lot of volume came in, I'll say in the first half of the year.

Okay, Mike, what's going on there? Do you think I mean it wouldn't, is it just going into Europe at a later part of the year, relative to what is typically the seasonal trend or is it anything related to the trade case and the certification issue that exists between U.S. and Brazil or something entirely different or not clear which perfectly fine answer as well?

Yes, yes and yes. So I think what I would say George is, ocean freight as we all know has just ballooned, I mean it's just unbelievable what I can find across these days. So on a landed basis, the way our pricing was terrible for plywood relative to the past that certainly turned the importers off the Brazilians in particular, but on a landed basis with the cost of freight included in that final delivered number that really, really impacted them very severely. They did have at some point in time in Brazil, they're going back a few months, they had some very significant COVID-related activities. And that sort of overlapped with reduction in plywood prices here in the U.S. So some mills in Brazil curtailed quite significantly. So that reduced the total volume. And then to your very good point, yes, it's about that time of year again, where the Brazilians not only the Brazilians, but particularly the Brazilians then right to Europe of course there's that quota. I think that first 600,000 cubic meters of plywood that enters Europe is paraphrased, or tax-free. I think that's between 6% and 8%. So there's that going on as well. So combination of factors. So I guess we'll see what happens going into next year. And then you've got the wood costs, I think you're probably referring most specifically to log cost, log cost in the sale are pretty much flat, and has been flat and continue to be flat. I would say, as some of these sawmills start to ramp up and you've heard or seen all those announcements. We'll wait and see how that plays out. There could be some specific geographies that have additional pressure. And I don't see it ramping up significantly in the very, very near future. But there could be a little bit of increase, I'll say, over the next five to 10 years as all these mills come online.

Thank you very much.

Thanks.

Thank you. I see no further questions in the queue. I will now turn it back over to Kelly Hibbs for closing remarks.

I'll take this. Chris, it's Nate Jorgensen, we can just quickly close we appreciate for joining us this morning for our update and thank you for your continued interest and support of Boise Cascade. Please be safe and be well. Thank you.