Darling Ingredients Inc. (DAR) May 13, 2026 Conference Transcript

All right, we're going to get started with our next presentation. CEO Randy Stewie has developed and executed a strategy over more than a decade that has positioned Darling as a global leader across rendering, biofuels, and food ingredients through strategic acquisitions, capacity expansions, and its Diamond Green Diesel joint venture. As a perfect complement to Randy, Bob Day has reinforced Darling's strategy with his disciplined approach to capital allocation, balance sheet deleveraging, and return since becoming CFO early last year. Darling is an exciting opportunity to demonstrate its earnings potential, leveraging improved operations against the stronger fundamental backdrop. We're pleased to have Randy and Bob with us today to expand on its alloc and strategy. We thank you both for being here. Great to be here. Maybe where I would start is with some comments that you made at the recent investor day. You talked about the current operating environment maybe has accelerated a bit more than you had previously articulated. Can you talk about where you're seeing that momentum? What has been maybe a little bit stronger than you expected?

Well, clearly, as we came out of 25, the world was waiting for some clarity of the Renewable Fuel Standard, or RVO, as everybody knows, and you still didn't have it here until April 1. And so the different movements that happen for demand, whether it's of oil seeds or whether it's demand of animal-based products had not really started so you just kind of carried forward first quarter was a was a wonderful quarter always always a little little difficult because of winter in north america and in europe but you know when we we did our earnings call and and obviously when we did investor day a couple days ago we hadn't really started to see we didn't have in front of us the the q2 run rate for those that do randy math you You look at what March did, and it's a five-week period for us. You divide by five and multiply it times 13, and that's our run rate for Q2. Since we hadn't seen April, it's the first time we'd ever reported without seeing the first period of the next quarter, which always gives us a pretty good feeling of confidence to give to try to guide this. I mean, number one, you've got to be insane to try to guide a commodity business, But in flat to up markets, you can't be too far from wrong. So what we've seen is with the announcement of the RVO, we've seen biofuel plants around the world restarting. In the U.S. as well, we brought back on a plant we basically had mothballed for most of last year and ramped on up to capacity. And ultimately, we saw fat prices come into the year, 45 50 cents I saw a product yesterday being sold 75 cents fob plant for some of our lower grade products so that is starting to flow through what we what we were trying to articulate in investor day was that we weren't sure how much was going to come through in April and then how obviously may will be better in June will even be better I think what if Pat prices have capped off I don't really think so yet, but we're seeing the acceleration in earnings there. Probably the other contributor that wasn't fully understood or we weren't prepared to step out in front of was the resurgence of exports of poultry meal. And really the proteins that come out of this country, there's a significant amount that have to leave. And low ash poultry meal or chicken meal as it's referred to it as no bones in it. It's the world's aquaculture feat. And when our president puts tariffs on, tariffs off, it makes buyers pretty uncomfortable around the Asia countries to step forward and buy it. And you know as we look back last year those tariffs probably impacted performance by probably over a hundred million dollars because we had to downgrade material and sell it to alternative markets rather than where it should go. So the protein side is really kicking in and contributing along with the fats now. And I think it's safe to say we're hitting on all cylinders in the rendering business. The biofuel margins are what we thought they would be. You know, we try not to guide out there because there's a lot of volatility. And then our food businesses, you know, the collagen business is really starting to take hold out there. you know that's been a that's been a 5-10 year product mix shift and then we're seeing the acceleration there along with new products and just you know the stars are aligning for us now we feel very very proud about it and Bob Bob reflected here earlier this morning you know if you look back in July of 2013 when we made the initial investment into diamond green diesel and then for the next 12 years we just continued to reinvest the capital there that's that stage has changed that's the inflection point diamond green diesel will provide dividends this

year and it will provide the the ptc so all of a sudden from reinvestment to outflows and that that doubles up with a with a really nice core business that's operating well i wanted to go back to a comment you just made i mean there's so much focus on diamond green diesel there's so much focus on the feed segment but the food segment which i generally think of as reasonably steady You've seen it in the first quarter, and you made the comments about April and May kind of accelerating. Why is that the case? What is changing there?

Well, I think an interesting dynamic in the food segment, and just for everyone's understanding, around 85% of EBITDA in our food segment is represented by the collagen business. So collagen and gelatin is the two primary products. We're continuing to see significant growth in water-soluble collagen across the world, And the way to make water-soluble collagen is to take extraction capacity, which is what you use to make gelatin, and put a spray dryer on top of it. Every time you do that, you take capacity out of gelatin production. And so essentially what's happening is due to the increase in demand for collagen, we are also tightening up the supply and demand for gelatin. It's creating a very nice dynamic for the business globally, and we're seeing margins in both products increase. one of the things that i i think the market is struggling with a little bit is we got the rvo we also have a war that has obviously changed the dynamic around energy prices here kind of coinciding to a certain degree so how do you think about the impact that that the the war with iran is having or the durability should should that there be a ceasefire and that go away I mean, I think the margins that we're seeing today in renewable diesel and sustainable aviation fuel, we absolutely expected as a result of the RVO. When we look at the obligation itself, the demand that comes with that production, the opportunity for imports, these margins make sense. I think we probably would have thought that they would have materialized a little bit later, closer to when compliance obligations are due, and we have convergence in the market for that reason. I think the conflict in the Middle East, what it's done is it's helped bridge that gap, which is really healthy for the industry because it's promoting production earlier than it probably would have otherwise, And it will move us closer to being able to meet the obligation, which I think a lot of people had been concerned about.

And I think, Andrew, I think it's what's fascinating to me and stepping back up to 30,000 feet, if you will, is once again, the world figured out how fragile the supply chain is on fossil fuels. And, you know, as I get to see our trucking companies in different parts of the world, diesel fuel in the Netherlands is $12 a gallon right now. diamond green diesel about $8.50 a gallon. We haven't seen that. And so you're seeing lots of different confluences that are happening because of the higher crude oil price right now. And it's an industry and world.

And as we look forward, we say it once again sends at least a light narrative back to that biofuels or green fuels have a place in the portfolio of energy going forward and that's where we're positioned when i think forward a little bit to next year and you guys showed the the kind of rain balance math um that had 2027 at a deficit um how do we work through that i mean that how if as we get closer to that environment how does that change trade flows how does it change the operating environment is the answer that margins have to go higher to solve for that or i guess how do you see that playing out

I think we do need to change some trade flows. Specifically, I think last year we exported, the United States exported around a billion gallons of advanced biofuels, so those are barrels that could stay in the United States to help satisfy the obligation. In order for that to happen, and in order to incentivize some imports, margins probably need to continue to increase somewhat, and so that's an encouraging backdrop.

I mean, clearly the policy is working right now. Farm prices are improving. And so, you know, ultimately, what's interesting is when you can run this thing and say on the S&Ds, they always have a way of balancing themselves. And, you know, clearly the administration believed that, okay, we might tighten up the, you know, the Ren Bank or might go to a small deficit but but that's okay because then it'll it'll write itself you know through price which what's that mean price means either more imports or less exports and so it should play a pretty nice balance for for 27.

Are we seeing if feedstocks flow into the United States can you maybe help us understand the competitiveness of foreign feedstocks versus the U.S. today at these prices?

It's obviously, it's very dynamic, changes day to day. And so it's just, yeah, it depends. But I think we are seeing foreign feedstocks imported into the United States. I think, you know, U.S., or let's say NAFTA or USMCA-based feedstocks have the advantage of 45Z. They've got freight advantages. And international feedstocks have discounted themselves in certain cases so that they can compete to move into this market. But we are seeing a lot of support and price increase for U.S.-based feedstocks, which really was the intention of the policy.

So who's the marginal producer today? I've always thought about it as the biodiesel industry.

With the need for imports, has that changed is it i guess how do you think about it you know i think it depends a little bit on just where where what's going on with uh market prices all around the world and who that marginal producer is um and i'll give you an example if if the best um if the most competitive feedstock is an imported tallow from brazil then your marginal producer is going to be a midwestern biodiesel company, because they're not going to have access to that feedstock, they're going to need to make a margin using a different feedstock and different economics. If the most competitive feedstock is soybean oil in the United States, then the marginal producer is probably somebody else. But I think the bottom line is we need a significant amount of production from the biodiesel industry to satisfy this obligation. We need a lot of production from renewable diesel as well. And so whoever that marginal producer is, they've got to be up and running, and that suggests good margins.

Can you maybe level set with your perspective, especially on the demand side, I guess? Where are we from an RD industry utilization rate perspective? Have we kind of – I mean, you said it's happened kind of quicker than you anticipated for a variety of reasons.

Have we kind of maxed out yet? is there more room to go from a demand perspective margins today would suggest if you can run you're running right um there was a lot of catalyst change out that happened in q4 and uh so you'd be ready to run and and so ultimately uh you know we you know obviously we watch uh the other three or four public companies uh release some earnings on their rd plants and you know we're significantly above our performances is way better than theirs and so then that's that's a feedstock mix but so it they but they all are saying they're running full so I and then you know I think the other thing is I'm not sure that there would be any more capacity in the u.s. put under construction maybe maybe D bottlenecked a little bit but you know I don't see you see anything different no I think that's right and we'll see as the April numbers come out but it certainly looks like we had a pretty good step up in april from where we were okay um at the investor day you you talked about 150 to 300 million dollars of potential internal improvement opportunities in the in the feed segment what are the buckets and and the timeline uh for that opportunity bob is forever known as slide 55. so that's our internal joke now and you know there's a lot of things that go into that and so you know as as we've had the last couple years that when you get into a deflationary ingredient business out there and then you get a little bit of biofuel headwinds you spend a lot of time you know and Donnie's words over here turning over every rock and so you know that that's from market contracts to build a new rendering plant hundred million dollars now three years um the replacement value is uh is is escalated by not only you know construction costs equipment costs you know so we're trying to pass on as much as as we can with people um always not the easiest conversation with your suppliers but but ultimately uh these are plants that have to be maintained you can't capital starve them or run to fail we look at you know we've stopped the world and said okay you know i call it the one darling approach now you know give you an example if brazil is producing animal fats and they've got a bid that's a ten dollars a ton above what diamond green diesel's bidding today that fat should still come to diamond green diesel because we're going to make 300 a ton as a company but but that's the one darling approach that we're bringing now and so we're looking at it every day with what's best for the shareholder not that we weren't in the past but when you run a decentralized company your P&O drives more behavior than you want so trying to get alignment looking and we brought on some additional talent Carlos Paz and Carlos is leading the the looking at the world and just saying where should trade flows go and and you know used to be that some of our plants would wake up and you know the european plants looked at exports if they couldn't keep it in within the the continent they would they would dump product into the world now we're trading products with the the one darling view um what else you want to add to that you know i mean you've covered

a lot of like what is included and what's going to get us to these you know higher margins um but i think what what i would add is that the competitive dynamics in our industry they're different than what we see in other commodity industries. As a lot of people know, the raw materials that we bring in are 60% moisture. And so if a competitor is going to do something irrational, it's going to cost more than what you tend to see in other industries. So the result of that is we should be able to continue to increase the fees that we charge based on the replacement cost of assets, and essentially act as an inflation hedge against the cost of construction. That's harder to do on shorter time periods in other commodity industries, but we should be able to do that just because of those dynamics.

So I guess how much visibility do you have to that?

Of the 150 to 300, what portion of your contracts have you already kind of executed some of that versus what's still left to be done? we have uh so i think as everyone's aware we we acquired valley proteins in 2022 that was a significant move into the into the poultry rendering space in the united states contracts in the u.s tend to be pretty long in nature three to five years as as we reset price it's difficult to do all of that in one negotiation and so some of that work has been done certainly some of the work around identifying the best commercial and markets and getting the maximum value for our products some of that's been done but there's still more opportunity and i think that that estimate that we gave at investor day was one that we think we can achieve in the next two to three years okay um you you made a comment about at the investor about the footprint being in all the places that you want to be but maybe you want it to look a little different I think was kind of the quote can you elaborate on how you'd like to see that evolve what you know I think if you look historically about every five years since the start of 2000 we've doubled the size and not only do you focus on integrating and paying down debt but

then you start to identify the the holes in the map of where you can logistically as Bob said, it's 50-60% water where you need to build a new plant. And so we've done that globally now, and so what we're looking at over the next three to five years is, you know, somewhere between 20-30 new plants around the world that have to go in. Our system today, it's amazing, is we're at capacity and you know and and so when we look at it as as the poultry consumption you know our general thesis that we've always worked under is population growth wealth creation center of the plate dining will include protein and we want to be part of that with the meat industry globally we don't see that slowing down and and so you know while we may be mature in a lot of our different areas what what we do look at is is the eastern shore is going to continue to expand the poultry side in the US the beefs in the beef cycles down as I'm sure you heard from the Tyson folks it will come back it always does Brazil continues to just explode up 14% in production now they have what the world needs land water people and that's not into the deforestation discussion that's just they they can they can grow more and more you're starting to see more you know more grain fed beef down in down in south america which is really amazing because you they'll take an animal to slaughter at about two-thirds the weight of what we do in the in the u.s and so you immediately say that well that's almost a 50 increase in rendering capacity needed down there so we'll continue to to reinvest there never did i think that we'd be in a discussion now in europe of starting to talk about Eastern Europe going east. There just weren't the animal numbers. But as Germany and the Netherlands have environmental challenges from animal production, it's going to go east. China, still not much there to render, as we say. But we continue to look hard there. And ultimately, I'm a fan of the Ukraine, if we can ever get the war settled.

Is there a way, I mean, obviously, fat prices have a big impact on profits in the feed segment. But if I kind of were to hold that constant, is there a way to think about, with your internal projects and things like that, what kind of growth rate for your earnings power in the feed segment, what that could look like kind of over, I don't know, a five-year period or what have you, that you'd like to achieve?

You're going to have to own this one.

Yeah, look, I think, well, you're really asking the question about, as we generate cash, invest that capital in new projects, What kind of EBITDA is that going to generate? So what we've said so far is when it comes to our capital allocation, we're committed to paying down our debt below $3 billion, getting our debt leverage ratio down below 2.5 in a downside environment. We've been really clear about that. We think we're going to be able to achieve that probably by the end of the calendar year. And at that time, that puts us in a position, if the outlook doesn't change, to really look at a lot of different options, Things we could consider shareholder investment-type opportunities as well as potential growth. The extent to which that growth opportunity is is going to depend on what the cash outlook is at the time. What we haven't really done is gone public with what are exactly the projects, what are the expected returns from those things. As Randy said, I think one of the big changes that we see going forward is we will be more organic investment focused versus, you know, heavily acquisitive like Darling's history has represented. What's nice about those opportunities, though, is even though they take a little longer to develop, we're able to do that building assets in places where they're complementary to our broader network, where one plus one can equal three. And so we're confident that we're going to have opportunities to invest capital and get great returns from it. We just haven't outlined exactly what that's going to look like and how we expect it. But I would say this as well. We also have opportunities to invest in the college and business. And that's a really exciting area of growth for Darling. So I want to ask about that in one second.

But first, I had a question on SAF and maybe how that has played out relative to your expectations. And then there was a comment about, you know, I know you're always asked about, you know, SAF 2, what have you, that you would need more market commitment. So I guess, you know, can you kind of give us an update on the current SAF market and what you would need to see from here?

Yeah, so we've got very different dynamics around SAF margins, whether it's to the European market versus the U.S. market. I think the European market is a mandated market. The U.S. market is a voluntary market. But as a result of that, what we see in Europe is a lot of fluctuation between a margin attractiveness comparing renewable diesel versus SAF. And that just depends on what the mandate is, what available supply is, and how prices react to that. We've seen plenty of situations or periods of time where renewable diesel margins into Europe are more attractive than SAF. The United States is very different. It's a voluntary market. More than half of our sales are made into the United States. That is a market that prices at a premium to renewable diesel. So the margin attractiveness is more of a fixed position. We're happy with the volumes that we're selling today. And I think as it relates to future investment in SAF capacity at Diamond Green Diesel, we're interested in doing it, but the outlook is different than it was in the past. and we would need some assurances from an off-taker that they're there to take it at premiums that make sense to justify the investment.

You want to talk about book and claim and how that's developing a little bit?

Yeah, and it's a nice evolution to the business. And what has been exciting to us is the buyers of SAF are not airlines. They're not who you typically think it would be. They're really large tech companies, companies that want to offset scope three emissions. And so that opens up a much bigger market. As those companies think about investing in anywhere in their business that requires energy consumption, they're looking to offset that with green energy or something else. And so that allows us to enter into more strategic discussions about how we can be a solution for them. And that would be our goal, is that we have something that's longer in nature and more committed.

Yeah, I would have thought three years ago that SAF was, you know, just really going to take off in the world. You know, but when you look at an airline's cost structure, you know, fuel's a big component of that variable cost, even a bigger one today. And so, you know, ultimately we went ahead and kind of pre-engineered, you know, out some expansions there, spent some money, not a lot of money, but got them ready to where we, if SAF did develop. Now what Bob's talking about is, is you're seeing a different discussion on book and claim which would then put the fuel into the jet a pool and the credit would be sold over here and so that that's a different thing but rd margins today are very very attractive along with the sap we're still getting the premium that we said we would in the return on the on the sap unit that we built you um you've talked about a dollar to two dollar margins which i understand kind of how you approach like hey wide range volatile we get it we're not trying to guide really to dgd margins but when we think about the um the cost position of dgd and those advantages and maybe how you think about framing for people the the margin potential in this kind of environment or the the the the ranges at least this level that kind of thing what how has that evolved maybe versus history and where how do you think about that how do you frame that and bob and i'll kind of tag the team this you know it's it's like we said it's very volatile business our partner doesn't guide in this area it's not really material to them but to to our shareholders uh uh it's very important and so what we've always looked at when we built the system you know the the investment case was about 79 cents a gallon and and so and clearly with cost increases now that would probably move it into the the 90s is what we would think but you know as we look at the the marketplace out there when we saw a balanced system you know three four years ago we ran margins in the um the 225 a gallon and and so then when we you know then then you transition to the ptc and that takes a little bit of a way and that's kind of where we said you know given the rvo and where we see the the industry having to run to fulfill it and seeing our logistical advantage to both import and export put it in the pipeline make SAF the arbitrages you know we look at that thing and said it should generate between one and two dollars this year and and I suspect we'll see margin acceleration as we go through the year as the obligated parties and the compliance dates start to really align I mean, you'll have to probably call Valero after this, but that's okay.

Okay, that was helpful. Shifting to next, Tida, you've discussed some lofty goals on volumes and margins are mixed by 2030.

Can you maybe level set where that business stands today in terms of trials, the preparedness to start to accelerate towards those goals? yeah and once again Bob can help me out here on I mean you know with the you're talking of the collagen peptides and breaking the molecule down everybody that goes to the grocery store and they see the word collagen out there and we're the leader in it globally what we've done is and you know separate the molecule down for targeted health and wellness applications and and we hold several patents on it and more patents to come and clinical trials and it's it's it's nutrition science-backed nutrition and wellness the trajectory is pretty long the portfolio is very broad we've got a glucose control product out there today lots of different brands and and orders in there it's it's developing nicely the and and ultimately is when you when you start to operate in that health and wellness you've now stepped down the supplement aisle and and that's pretty confusing down there and you know in the world of unregulated supplements you can pretty much say what you want to say and and so trying to differentiate yourself you know I give you an example Prevagen's been out there for 10 years our second product coming online now is going to be brain health product that should launch here later later this summer early next year all backed by lots of science and very sophisticated clinical trials and then there's a women's health and then there's hair nail type products that'll over the next five to ten years what what's important to us is is that you know as we said John Bob talked about the the product mix shift you know ten years ago we were about 95 percent gelatin typical margin in gelatin's about a dollar a kilogram or a euro a kilogram depending on what continent you're on hydrolyzed collagen and if you think through the product line Bob said water soluble gelatin's a thickener and emulsifier used in food pharmaceutical type of applications then you get into water soluble the breadth of application opportunities is just unbelievable. So you get into, now you can go into bars, sports drinks, foods, et cetera, and now you take to the next level, what we call Nextida, for those peptide applications. But the margin structure, because of the demand of the universe of opportunity, is about three times better. And then when you get into these targeted applications, you can be 7 to 11 times better in different pricing. So as we move more of our product mix there, that's where we get really excited about what the collagen business can do for us globally. And, you know, we always get the question, where the hell does that fit with an animal byproducts company? Well, you've got to remember it comes from a bone and a skin. And we're kind of the biggest in the bone and the skin business in the world. and ultimately 80% of that extraction process then goes back to animal feed and animal fat. So you get this super high value product and then you've got the other core ingredients. So ultimately, Andrew, we look that somewhere in the next three to five years, that will lead, if we're successful, which I believe we will, will lead to doubling the value or the earnings in the food segment.

Have you been able to prove out that margin delta on at this early stage or is that like hey as we grow and sorry go ahead yeah i i mean we make a product today uh that's called next data gc glucose control um that that margin difference is is proven uh today but i just want to comment on something randy said because i he brought it back to kind of what what makes this a simple story we get we're told a lot that darling is really complex business hard to understand when you start talking about active peptides and molecules that sounds pretty complicated but but as randy said it it's really we're talking about animal byproducts you know we are our raw materials at darling are animal byproducts and used cooking oil uh there's more than 100 million metric tons of commercially available animal products byproducts and used cooking oil in the world and so there's a lot of supply it starts with that and then we add a lot of value through our different product mix. In this case, with collagen, there's a lot of science and R&D that's going into it. And yeah, those margins, that sort of seven to 11 times a gelatin margin, that's already been proven out.

I mean, doubling the food segment, but that's obviously very material.

What needs to happen to start to see that mix shift really accelerate is it more products is it just kind of time i guess how should we think about that glide path which i'm sure is not you know perfectly ratable but how should we think about it i'll start with that so uh you're going to own this one too well i guess so yeah thanks for that you know with with these types of products typically what what we see is you start supplying a number of different consumer packaged goods companies, smaller, more entrepreneurial companies that are out there really pushing hard to get product on the market, educate consumers. That takes a bit of time, but it's a groundswell. And as the momentum develops, it moves quickly as time goes on. And so the answer to your question is, we need time. We also need a breadth of products and really get that process going so we can get that momentum.

I mean, what's interesting for me is to watch how you get these products to market. We're not going to put a brand on it and put it out there. We might be a co-branded label with someone. But these big CPG companies, as Bob talks about, really are relying on these accelerator or incubator companies now to do the the kind of the the little lift or the heavy lift and then to go and we're just starting to see that right now with the GC product and you know you know when you're when one of your biggest customers is a basically a repacker in Boca Raton Florida but they're continuing to put orders in and and you know it's we're watching I think we we had like 27 customers and 22 of them put second orders in now and and so we're we're getting the acceleration we want there what we're seeing is the big CPG companies wanted more clinical data and more science back and we're providing that and so you know it's just it's a it's a matter of time you know I think we've gone to outside consultants to help us think through you know we're pretty good at animal byproducts taking these type of specialty products and into these markets is a little a little foreign to us and so we're building the organization right now for those that that are where we're moving the headquarters out of the Netherlands into into Irving Texas and we'll be staffed out of there with the with brand managers and product line managers over the and it's already starting right now during investor day we brought in one of our brand and marketing managers and just the the number of products that we had on the table there to show people these applications is is really exciting it you know I go back to the day of vital proteins as everybody knows that's been a very successful product it was a startup in Chicago it was basically product that we made in our Amparo Brazil plant bovine grass-fed collagen shipped in super sacks to Chicago repack they put the label on it and and the business grew dramatically and it was the the science behind it was the the scientists and Kurt was a runner from a NASA scientist and Kurt loved it to run and his joint started hurting and he called and said can I I've done my homework can I get some collagen came from came from us and he built the company and and the rest is history now and I watched that and I go back I can't it's hard for me that was 10 years ago and and we've we've shifted you know our product mix now to where we're about almost 60-40 college and where we're 95-5 over 10 years I'm just trying to give a trajectory of what next TIDA can do and I think it'll it'll get some really really good trajectory here over time.

You know you talked a little bit about the inflection contributing cash to DGD now get starting to get some of the distributions the earnings environment obviously getting much better when you think about capital deployment you know you've talked about cash returns to shareholders is you know kind of where does that sit in the priority set relative to organic growth and do you have a preference for dividends share repurchase I guess how do you think about that yeah and you know what I think if we want people to leave today with one thought okay the the reinvestment in the DGD over the last 10 years that's that's done now the marketplace is set up nicely with the RVO for the next couple years

the core business is operating well we've right-sized and fixed and the assets that were underperforming protein market strong in the world the collagen business is strong we are a cash generating unit now the debt is coming down rapidly it would depending on which one of our cycles you want to pick here we've always said that we wanted to get below three billion dollars I think it's very doable by the end of the year we want to have a strong financial policy at two and a half times and then it's a it's Bob's and my job to be with our board and say here's the next three to five years that we look out and say okay buybacks absolutely we'll buy back our dilution every year maybe return more get comfortable doing that does it make sense to put it a small dividend underneath this thing a percent half maybe and then the organic growth we can't we can do all of it on the organic growth side there's only so much you can do because resources being people time and equipment and permit you know to to build a plant today is three years but it's not an immediate if it's plants a hundred million it's 30 million 30 million 30 million and so it allows us the flexibility now that we haven't had in the past and as you look back Andrew what's different today than it was we did a slurry of about three and a half four billion dollars of acquisitions we didn't dilute anybody and issue equity because we said the balance sheet and our confidence in the business was going to be able to deliver it maybe we didn't do it as quick as we wanted to because of the lapse in the RVO but that's passed and so it's different times for the company now.

Maybe I'll squeeze one more question in here. You talked about the current environment kind of implying something closer to the upcycle range currently based on where we are today. My comment would be it seems like over the next two years it seems like fundamentals are pretty well set up to not materially fall off from there.

So I guess what prevents that from playing out that way what do you think is maybe the biggest risk that we should be on the lookout for you know i right now i don't you know i'm looking at the world and we've digested the iranian war unless something really happens there um you know what's trump going to do with 301 tariffs again that just screws up trade flows god willing this hantavirus thing goes away but right now the the table is set we're hitting on all cylinders and clearly we're we're on the up cycle or the you know the high cycle of this thing I don't like to call it a cycle because I think it's a we're just really set up nicely here for the next several years you know you start to say well 28 and then we get into another election year we get into ultimately another RVO discussion but I don't see there's any going back for the the farm community now right we will end it there thank you very much