Darling Ingredients inc (DAR) Q3 2021 Earnings Call Transcript

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Darling Ingredients inc (DAR 4.60%)
Q3 2021 Earnings Call
Nov 10, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Darling Ingredients Inc. Conference Call to discuss the company's third quarter 2021 results. [Operator Instructions] Today's call is being recorded. I would now like to turn the conference over to Mr. Jim Stark. Please go ahead.

James E. Stark -- Vice President Investor Relationss

Thanks, Grant. Welcome to the Darling Ingredients' Third Quarter's Earnings Call this morning. Participants on the call are Mr. Randall C. Stuewe, our Chairman and Chief Executive Officer; Mr. Brad Phillips, Chief Financial Officer; Mr. John Bullock, Chief Strategy Officer; and Ms. Sandra Dudley, Executive Vice President of Renewables and U.S. Specialty Operations. There is a slide presentation available, and you can find that presentation on the Investor page under the Events and Presentations link on our corporate website. During this call, we will be making forward-looking statements, which are predictions, projections and other statements about future events.

These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in yesterday's press release and the comments made during this conference call and then the Risk Factors section of our Form 10-K, 10-Q and other reported filings with the Securities and Exchange Commission. We do not undertake any duty to update any forward-looking statement.

Now I'd like to hand the call over to Randy.

Randall C. Stuewe -- Chief Executive Officer

Thanks, Jim. Good morning, everybody, and thanks for joining us this morning. Our core business continues to perform very well. For the third quarter, we reported combined adjusted EBITDA of approximately $290 million, of which $230 million was directly from our Global Ingredients business. Like many companies around the world, we continue to face the challenges others are facing when it comes to labor, transportation and higher cost of operations. Our team continues to execute our business strategy and operate our facilities with great efficiency while improving our gross margin year-over-year and sequentially from the second quarter this year.

I want to thank all of our employees who continue to dedicate their efforts in navigating the challenges we face in our daily responsibilities. As it has been well stated, Hurricane Ida took a big bite out of DGD's performance in Q3. For the first time in eight-plus years of operating, DGD was shutdown to protect the employees and the assets of the facility from this significant storm. The great news is there was little damage to the facility, which it took a direct hit from Ida. With the days of shutdown and the restart process, we lost approximately 17 days of renewable diesel production. Also, on the great news front, the DGD Norco expansion is running well and is closing in on reaching its production capacity, putting DGD on track to sell 365 gallons or more in 2021.

We also believe DGD could sell over 700 million gallons of renewable diesel in 2022 as the engineering team continues to fine tune the performance of this expansion. The achievement of Diamond Green Diesel is only possible because of the hard working employees, contractors and service providers at the facility. While many of these fine people suffered damage to their personal property and disruption to their daily lives from the hurricane, their resiliency to return to work and get the plant back into operation and finish the construction of DGD II was extremely important and exceptional.

We truly appreciate their tenacity for getting the job done. Also, during the quarter, Darling repurchased approximately $22 million of common stock. And for year-to-date, we have purchased approximately $98 million worth of stock. On a year-to-date basis, our Global Ingredients business has earned approximately $628 million of EBITDA, putting us at an annualized run rate of approximately $850 million for 2021. With that, now I'd like to hand it over to Brad to take us through the financials, then I'll come back and discuss a little bit of our outlook and some -- how things are going to finish up for 2021. Brad?

Brad Phillips -- Executive Vice President ,Chief Financial Officer

Okay. Thanks, Randy. Net income for the third quarter of 2021 totaled $146.8 million or $0.88 per diluted share compared to net income of $101.1 million or $0.61 per diluted share for the 2020 third quarter. Net sales increased 39.4% to $1.2 billion for the third quarter of 2021 as compared to $850.6 million for the third quarter of 2020. Operating income increased 61.4% to $205.7 million for the third quarter of 2021 compared to $127.5 million for the third quarter of 2020. The increase in operating income was primarily due to the $114.1 million increase in gross margin which was a 53.8% increase in gross margin over the same quarter in 2020. Our operating income improvement was impacted by the lower contribution of our 50% share of Diamond Green Diesel's net income, which was $54 million in the third quarter of 2021 as compared to $91.1 million for the same quarter of 2020.

As Randy mentioned earlier, Hurricane Ida impacted gallons sold in Q3, resulting in lower earnings for DGD during the quarter. Our gross margin percentage continues to improve year-over-year and sequentially. Q3 2021 gross margin was 27.5%, which is the best result we have had in the last 10 years. For the first nine months of this year, our gross margin percentage was 26.8% compared to 24.9% for the same period a year ago or a 7.6% improvement year-over-year. As you can see on Pages four and five of our IR deck, gross margins have continued on a positive trend for the last four years as our management team across the business has worked to increase the profitability of their operations. Depreciation and amortization declined $7.9 million in the third quarter of 2021 when compared to the third quarter of 2020.

SG&A increased $7.3 million in the quarter as compared to the prior year and declined $1.9 million from the previous quarter. The main causes for the higher cost in the quarter compared to a year ago related to labor, travel and other. Interest expense declined $3.4 million for the third quarter 2021 as compared to the 2020 third quarter. Now turning to income taxes, the company recorded income tax expense of $42.6 million for the three months ended October 2, 2021. Our effective tax rate is 22.3%, which differs from the federal statutory rate of 21%, due primarily to biofuel tax incentives, the relative mix of earnings among jurisdictions with different tax rates and certain taxable income inclusion items in the U.S. based on foreign earnings. For the nine months ended October 2, 2021, the company recorded income tax expense of $126.3 million and an effective tax rate of 20.2%.

The company also has paid $36.9 million of income taxes year-to-date as of the end of the third quarter. For 2021, we are projecting an effective tax rate of 22% and cash taxes of approximately $10 million for the remainder of the year. Our balance sheet remains strong with our total debt outstanding as of October two at $1.38 billion and the bank covenant leverage ratio ended the third quarter at 1.6 times. Capital expenditures were $65.6 million for Q3 2021 and totaled $191.7 million for the first nine months of 2021. As a reminder, this capex spend does not include our share of the capital spend at Diamond Green Diesel, which continues to be substantially funded by internal resources at DGD.

Now I'll turn the call back over to you, Randy.

Randall C. Stuewe -- Chief Executive Officer

Thanks, Brad. As our Global Ingredients business and Diamond Green Diesel continued to perform well, and as we indicated in our press release yesterday, we are maintaining our guidance for 2021 of combined adjusted EBITDA of $1.275 billion. There is strong momentum for our global platform as we finish out our best year in our history and look to build on that energy going into 2022. I want to spend a few minutes on capital allocation. Over the last couple of years, we have discussed our best use of cash at Darling through five points, and those really have not changed. Those five points are: Investing in DGD, growing our core business, reaching an investment-grade debt rating, meaningful share repurchases and potentially starting a dividend policy for our shareholders.

It is our belief and most everyone who is on this call knows that our future cash generation will be large enough to address all of these points in our capital allocation plan. And we continue to work on the execution of this plan as our free cash flow generation continues to grow. I do not need to point out that we did make the decision earlier to accelerate the construction of DGD Port Arthur, Texas, which puts a big capital spend on DGD in 2022. That does push out the potential size of distributions from the venture in 2022, but increases the potential for 2023. I do also want to add that our M&A funnel of opportunities to grow our low CI feedstock footprint around the world and grow our green bioenergy production capabilities is rising. This may adjust priorities in our capital allocation plan, but not limit our ability to execute on all of the points I already mentioned.

So with that, Grant, let's go ahead and open it up to Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question today comes from Adam Samuelson with Goldman Sachs. Please go ahead.

Adam Samuelson -- Goldman Sachs -- Analyst

Yes, thank you. Good morning.

Randall C. Stuewe -- Chief Executive Officer

Good morning.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Good morning.

Adam Samuelson -- Goldman Sachs -- Analyst

So I guess my first question is around policy and just thinking about some of the new incentives that were -- are working their way through Congress in the Build Back Better Act, specifically the sustainable aviation fuel tax credit and then that clean fuel production credit post for 2026 and beyond. Randy, I'd just be interested to hear how you see the opportunities for DGG around both of those and what the longer-term kind of potential contribution of those would be to the DGD?

Randall C. Stuewe -- Chief Executive Officer

Okay. Adam, I'll let Sandy take a shot at this for us.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

First of all, I think we think it's very supportive of the biofuels industry. It shows really a long-term commitment and one that says that biofuels are an important way to reduce emissions, which we've all known for a long time, but sometimes we don't seem like we get recognition for that. In terms of the BTC extension, there are actually two things that I think that are positive with regards to Darling. First, there's the BTC extension as well as the SAF credit. So first, on the BTC extension. That's a four-year extension at $1 per gallon. It's treated in the same manner as it is today, which is very positive. Then after -- and that would go from 2023 to 2026. After that, then you have the clean fuel production credit that would go from 2027 to 2031 and the way we read it possibly to 2034. What we're seeing is that then becomes a production credit.

That's $1 per gallon that's adjusted annually for inflation and then subject to a CI adjuster as well before there's a step down in credit value. And that step down in credit value is based upon whether or not a certain emissions reduction has happened or we've gotten to the year 2031. So gosh, that's just enormous support in terms of what we've been doing today and what we expect to do going forward. In terms of the SAF, you also have a credit there for four years. It's what we're reading $1.25 per gallon up to another $0.50 per gallon depending on the CI.

Under that, you'll have to have a life cycle reduction of at least 50% as determined by IKO or a similar methodology after 2026, then you have the clean fuel production credit that kicks in and that would go again from 2027 to 2031 and again, possibly to 2034, depending on whether or not there's going to step down. Again, it becomes a production credit, then the credit goes from $1.25 to $1.75. Again, that would be adjusted annually for inflation and then subject to a CI adjuster as well as the step down. All of that is just so supportive of reducing emissions and support of the direction that Darling is going and DGD.

Randall C. Stuewe -- Chief Executive Officer

Yes. Adam, I think -- this is Randy. I mean I think Sandy did a really detailed nice job there of explaining. I mean, overall, the legislation that's out there in the, if you will, The Build Back Better, social spending plan that I think has a pretty high probability of moving forward is probably the single most bullish thing that we've seen in many years here that gives certainty of our participation in the climate change discussion. I think Sandy was very subtle, and hopefully you picked it up, but I'll make sure you pick it up. She said the word producers or production credit. And so that's a very key principle in here that gives extreme favorability to U.S. assets.

Adam Samuelson -- Goldman Sachs -- Analyst

That's really helpful color, Sandy and Randy. And I guess as a follow-up, just as you look at DGD kind of with the Norco expansion just about done, Port Arthur coming in 18 months or so, how are you thinking about both scope or opportunities to reduce the CI scores of your own production? And then incrementally, just thinking about SAF and what it would take to actually start making that fuel?

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Yes. So I think we're constantly looking at trying to reduce our CI scores. There are a number of ways that we're doing that. I think that we can start with our feedstocks, too. So we're looking at ways with our feedstock of helping reduce the CI scores. But then internally, we look at that all the time and try to make adjustments to our processes that allow us to do that. And so we -- it's just a constant thing in our mind. In terms of SAF where we're headed, I think we've constantly said that we're really excited about SAF, but we need the right economics. And to that end, we've reviewed the capital required. We studied the yield profiles. We've talked to the logical markets.

We've done the preliminary engineering, and we've evaluated the economics. I will say, just as you earlier were talking about, The Build Back Better Bill appears to be really serious about trying to grow the SAF industry. And we're really excited to see that. But yet, unfortunately, the legislation is not yet finalized. So we have to see it before we can make any decision. Assuming that the final economics are supportive, we look forward to expanding our role in terms of low-carbon solutions. And I think what you've seen from Diamond in the past is that when we make an announcement, it's well contemplated and we're serious about it. It's not just an announcement that we want to get something out in the press or have an ESG story, it's because we plan to do it. And so at the end of the day, we've done our homework. And once things are finalized, we should be able to let you know relatively quickly where things stand. I'm hoping that's in Q1 of next year. That said, I hope that we can become a part of the SAF movement soon.

Adam Samuelson -- Goldman Sachs -- Analyst

I appreciate all that color. I'll pass it on.

Operator

Thank you. Our next question comes from Prashant Rao with Citigroup. Please go ahead.

Prashant Rao -- Citigroup -- Analyst

Hi, good morning. Thanks for taking the question. I wanted to pick up on something you said there, Sandy, about an ESG narrative. And then also what sort of the legislative environment, what the push is here broadly with this administration and globally. Darling has a very compelling ESG and sustainability story. And Randy, you talked on that before that there's a -- 2022 might be the year that there could be some clarity around the messaging so that the market gets that. I was wondering if you could help us when we think about that just beyond just decarbonization, other land use, water use, other factors and the highlight in the Darling story that you think sort of this might be the time to really emphasize those. I was wondering if you could help us to think about how you're thinking about messaging that and sort of leveraging to all the equivalents?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes, this is John. It's an interesting point. We have long viewed ourselves as an ESG company because, quite frankly, almost everything that Darling does is a carbon capture story, which in a world that needs to reduce carbon emissions is a great thing. I think what's more interesting than that, though, than just the fact that historically, we happen to be standing in the right place at the right time because I don't think there's another company out there that has actually moved as aggressively to help the world reduce carbon emissions as Darling has, not only with our Diamond Green Diesel, but also the actions that we're taking internally to help reduce water usage.

The fact of the matter is we recapture much water associated with our rendering operations. We have a really broad-based ESG story. We have, as this story has evolved and part of this is ESG is a developing concept, and there's been a lot of moving pieces on how people view and how people judge that. We're working hard internally to try and to clarify our messaging around this issue because at the end of the day, once you pull all the curtains back, the reality is there's no company out there that's doing more in relationship to the ESG story and the ESG movement than Darling is and has been doing for several years now in preparation for it. So I think it's a matter of getting the messaging out there because the story is absolutely rock star. Randy?

Randall C. Stuewe -- Chief Executive Officer

No, absolutely, John. And Prashant, as we did during your conference, I mean, clearly, 2022 we will be spending a lot more time talking about the initiatives that we have around the world from water and intensity reductions. We're looking at different technologies in the gelatin business, which is a huge water consumer, water recapture for crop production, energy intensity. Clearly, when energy is cheap, no one really spends a lot of time thinking about this stuff. And all of a sudden, in the last year, we've seen energy move up 40% to 100% in different parts of the world. And so once again, it's going to get more and more attention. And then clearly, in the labor world, we've got to get smarter there as the world is at full employment. So I think it's a great time for us. I appreciate you bringing it out. I'd tell you to stay tuned and we'll bring you more here in '22.

Prashant Rao -- Citigroup -- Analyst

Appreciate that, John, and Randy. And just one quick follow-up. I just wanted to touch on capital allocation for next year. Randy, you -- great to hear the reconfirmation of how you think about these things. I just wanted to check when you think about '22, specifically given the acceleration of Port Arthur and the distribution up to the partners might be -- have to wait until we see DGD3 up. How much -- when you think about inorganic growth in 2022, I just wanted to sense checking where your appetite is and what room there might be on the balance sheet should you need to go there on the debt side to source capital for a potential inorganic growth bolt-on or something like that? I'll leave it there.

Randall C. Stuewe -- Chief Executive Officer

Wow, that's a great question. I'm getting lots of stairs in the room here. No, the fun part is we're clearly -- as we're trying to decode and telegraph, we're seeing more M&A opportunities multicontinent than we've seen in the last three to four years. Can't really address them yet. I can't tell you if they're going to be fair priced and if we're going to get them home. Clearly, our -- as we think of our business today, we want to continue to build the moat around the machine and the machine is this giant ESG story. And how do we do that by procuring and securing additional low-carbon feedstocks around the world. So we're looking hard.

Obviously, the acceleration of DGD3, it's both the kind of a blessing, and to a degree, not a curse because what it means is it will be online in early '23, we hope. And once again, a source of -- it'll be completely funded and delevered, and it will give Darling unlimited cash generation capacity at that time, a high-class problem. Between now and then, we've got plenty of availability within our credit agreement, within maybe some modifications to it if we need to here. Clearly, as Brad said, we're down to a 1.6 leverage time ratio, if not headed lower even yet this year. And so we have plenty of room to do what we want to do in '22 and then pretty much a high-class problem as we say in '23 here.

Prashant Rao -- Citigroup -- Analyst

Thanks, Randy. Appreciate the time guys.

Operator

Our next question comes from Tom Palmer with JPMorgan. Please go ahead.

Tom Palmer -- JPMorgan -- Analyst

Good morning and thanks for the question. We've seen animal fat prices move a bit higher. Used cooking oil, corn oil haven't really followed to the same extent. Curious what your view is on that? Do you expect the price gap for UCO and corn oil to converge with the tallow over time? Or are there constraints to consider when it comes to the pricing of these other feedstocks?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes, this is John. Yes, I think in general, what you're seeing is this trend that waste fats are a valuable fat when we're trying to reduce carbon emissions in our fuel supply. And so you're generally seeing those move higher. I wouldn't take too much note in any type of short churn movements on the relative price of UCO and corn oil and animal fats. They all carry slightly different carbon intensity scores. But essentially, they're all substantially better than vegetable oils are in relationship to their value in the low carbon intensity fuel cycle. So I think this market is a big market, and it's an evolving market. I wouldn't get too excited about short-term type of differences between the fat prices. The general concept that waste fats are valued in low-carbon fuel markets is a fundamental truth now and it's going to be a fundamental truth for a very long period of time to come. And that's essentially the oilfield that Darling sits on top of is a low carbon source of fuel for -- for low carbon fuels.

Randall C. Stuewe -- Chief Executive Officer

Yes. And I would say, Tom, this is Randy. I think John said it very, very well. As Sandy pointed out, SAF is going to give preferential treatment to low-carbon feedstocks. Once again, that's us. When you look at the low carbon pool of feedstocks, both in North America and around the world, we're now trading well above the caloric value of corn, which has always been kind of the baseline of where it could go. And so at the end of the day, DGD II, we kept telling you, keep in mind, it's buying 40% of North America's feedstock today. And so it is clearly firm prices for us, but it's also -- there's plenty of feedstock out there for us to accomplish what we want to at number two and number three.

Tom Palmer -- JPMorgan -- Analyst

And last quarter, you laid out an EBITDA outlook for 2022 of 1.6 to 1.7, and I think it was kind of $850 million from the ingredients business, $800 million from DGD. Is this still the outlook you did increase your production, I think, at least by a little bit at DGD? Does that affect the outlook at this point or kind of still the prior one?

Randall C. Stuewe -- Chief Executive Officer

No, I think we're kind of still -- there's been a lot of fluctuations, clearly in margins with the disruption of Ida. RINs moving up, LCFS moving around, heating oil moving around. I mean, we're still going to -- we came into the year telling you that we would operate around $2.25 a gallon, maybe a little more in DGD. Clearly, 17 days offline didn't help us there. But as we go forward to next year, I think we're pretty much where we said we would be at this time. So I feel good what I see right now, if you think, as we said, the base business this year should finish up around $850 million, plus or minus a few dollars there. And then you sit there and say, OK, $750 million then coming out or $700 million coming out of DGD next year, which would be $2 a gallon at $700 million gallons. I mean that's the simple math we're doing today. I don't see any real change in that forecast at that time.

Tom Palmer -- JPMorgan -- Analyst

Great, thank you.

Operator

Our next question comes from Manav Gupta with Credit Suisse. Please go ahead.

Manav Gupta -- Credit Suisse -- Analyst

Hey, guys. I'm going to ask policy base question. You do talk to a lot of people at CARB, and you talk to the high-level people in CARB. And again, there are some estimates out there which are saying a number of projects are coming on, which we don't think all of them are coming on, but there is a bear thesis floating around saying that LCFS price could drop to 80, which would not be good for the entire program of LCFS, investments will be curtailed back. In your opinion and discussions with CARB, do you think they will be supportive of decent carbon price, I am not saying high or low, but would they try and at least set the expectations where people who are investing in these lower carbon projects would get some good returns. And so will they try and support the price of carbon? That's what I'm trying to ask.

Randall C. Stuewe -- Chief Executive Officer

Go ahead, Sandy.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Yes. So Manav, this is Sandy. So I realized everyone is very focused on LCFS credit prices these days in the direction they've taken lately. I think in Q2, we saw LCFS credits exceed deficits. And over the last few months, we've seen a general decline in LCFS prices. Within the market, we've seen things going on. We've seen weakness in California, gasoline and diesel demand versus historical levels. And we saw the same thing really over in Europe as well, and that may be even more pronounced. That resulted in more renewable diesel volumes being shifted from the European market to the California market, which we saw in terms of increased imports, not further weight on the market, I believe. We also saw increased credit generation within a number of categories recently, and we've heard about a number of projects that are planned to take place. But keep in mind, we also have seen credits exceed deficits off and on over time, and there's been a general decline in the credit bank since 2017, 2018.

We also recently saw Governor Newsom call on CARB and CUPC to achieve carbon neutrality by 2035, and that's a whole 10 years earlier than was originally planned. That's a huge task, and it's going to require significant carbon reductions. We've been hearing that CARB is contemplating ramping up its carbon reduction targets in answer to your question, and we've recently seen too that the 2020 average credit crew intensity exceeded the baseline. And that's going to be added to the regulated parties obligations for 2022, unless something changes during the comment period. And we've also seen -- don't forget, that some projects have been delayed or scrapped. We've seen Washington State pass an LCFS. Although granted, there's still some work to do in terms of implementing the transportation package. We also know that Canada will be implementing at CFS in the not-too-distant future.

And we know other states are looking at implementing LCFS-type programs like New York and New Mexico. And then finally, we've seen Europe propose some significant mandates within its fit for 55 suite of programs. And all of these carbon reduction programs will be competing for low carbon credits going forward. So sometimes I think when we look at events or trends over the short period of time, we get focused on those temporary trends. And John kind of spoke to that earlier. And so we don't necessarily always see the broader picture. I'm not entirely sure that we're seeing an inflection point here with the LCFS because there's a number of things coming down the road that I think should be bullish on credit prices. But we, like everybody else, are going to continue to monitor that.

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

And if I could just add on top of that, Manav. We're actually extremely pleased to see that the LCF at credit market has not challenged the maximum ceiling pricing. I think what we've established now, and this is really going to help the long-term low-carbon fuel programs in other jurisdictions move forward and help California increase its mandates is these things are successful. The market brings new low-carbon alternatives into the marketplace, and we have a vast array of other government entities that are thinking about implementing low carbon fuel standards. Quite frankly, the success in California and the fact that the market has responded with low-carbon alternatives, not only renewable diesel but other, is extremely positive for expansion in these programs.

And the expansion in these programs provides a much more stable base and long-term viability base for what Diamond Green Diesel is and for what Darling is a supplier of low-carbon feedstock. So we very much like how this is working, and we think this is good news. I know everybody obsesses about the bad news and what's the impact going to be on per gallon this quarter and all that good stuff. The fact of the matter is, it's indisputable. The pattern that's being laid out here is extremely positive for what we have at Diamond and what we have at Darling.

Manav Gupta -- Credit Suisse -- Analyst

Perfect, sir. I'll stick again to a little bit of policy again. And I know Reuters came out with some numbers and there was a knee-jerk reaction that the Biden administration is probably going against biofuels. But when we dig deeper, it's very clear that they may not be fully supportive on the ethanol side. But when we look at the advanced biofuel, renewable diesel, biodiesel, there's almost a two billion-gallon increase that they are proposing. So I understand it's a leak document, but wanted your views as to do you generally feel when you are interacting with Biden EPA, they may only talk electric at the top, but down under, do you think there is support for biofuels within the Biden administration?

Randall C. Stuewe -- Chief Executive Officer

Go ahead, Sandra.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Yes. I do think that there is support within the biofuels or for biofuels within the Biden administration. I think you see that within the SAF credit that we saw yesterday, there was a new report that was released, the 2021 Aviation Climate Action Plan that's very supportive of SAF going forward. And it's a whole host of programs that support SAF. In addition to that, I think what you've recently seen too, as you've seen a potential long-term extension of the BTC. So I do think that that's very supportive for us as well. So I do -- I think...

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Let me just add on, this is John. In relationship to the RVO question, the fact of the matter is you can't just look at what Biden administration is doing with RVOs. I think your point, Manav, is right on. It's quite clear that they're going to be ramping up the mandates for the biomass-based diesel part of the program and for the advanced categories. That's extremely positive for us. The other thing that I think that you've got to take into consideration here, it's just not the RVOs. It's what do they do with the SREs. And as we saw, they just united an SRE. I think the general noise as we hear is that there's not going to be liberal granting of SREs, that's very important to the S&D of RINs. And then finally, there's this historical question.

There are some folks that are obligated parties that are behind on the RINs compliance, what's the administration going to do and the court is going to do in relationship to those issues. So there are a number of balls bouncing. We see nothing that tells us that the Biden administration is anything less than totally positive and committed to reducing carbon emissions and fuel. And the answer today for reducing carbon emissions and fuel are biofuels, specifically biomass-based diesel is the primary driver of that. So we think the support is there, absolutely. We know that there's going to be some confusion when these RVOs come out because when you think about it, the EPA had to address the issue that gasoline consumption had reduced dramatically during COVID, and that the standards had been established on a pre-COVID basis.

They have to figure out how to adjust that S&D as they come out with the new rules, that's going to create some controversy. It's going to create some sparks. But we think where we are positioned in relationship to biomass-based diesel is on extremely firm ground, and we should see excellent support for RINs moving forward.

Manav Gupta -- Credit Suisse -- Analyst

I just say that you took a bad hit from Ida, but you maintained your annual guidance, and that is very commendable. Thank you for taking my questions.

Operator

Our next question comes from Ben Bienvenu with Stephens. Please go ahead.

Ben Bienvenu -- Stephens -- Analyst

Hey, thanks, good morning everybody. I want to follow up on Adam's question around SAF. And I don't want to put the cart ahead of the horse because I know we're still ramping DGD II. We've got DGD III. Sandy, you talked about wanting to get a little bit more clarity around the policy to support the production economics of SAF but noted the merit of the fuel and reducing greenhouse gas emissions. John, I think you talked about having all of the feedstock availability you need to ramp DGD II and DGD III. In addition to production economics, how does the feedstock component of the equation figure into your decision around what to do with potential involvement in SAF?

Randall C. Stuewe -- Chief Executive Officer

Go ahead, John.

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes. Are you asking -- I'm not sure quite what you're asking. So are you asking...

Ben Bienvenu -- Stephens -- Analyst

Is there going to be enough feedstock available to pursue both the build-out of SAF and renewable diesel because it seems like renewable diesel alone is going to suck up most of the fat oil greases available to make low carbon fuel?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes. So we have kind of two paths we can go down here. One is we can convert some of our current or in process of being expanded or built renewable diesel capacity for the road, we can make some of that SAF if we want. So we have the alternative of essentially diverting some of that road field to SAF, if we want to do that. That clearly is possible. We also have the possibility of building Diamond Green Diesel IV at some point in time in the future and making a part of that products from that unit being SAF as well. Both of those roads are open to us in the future. I think it's more likely than not that if we were wanting to move rapidly into the SAF marketplace, and I'm probably jumping a little bit ahead. But we would probably want to take some of our existing capacity and create optionality around SAF on it. We can get there a little quicker than we can with the new unit, but we'll see what all that leads to.

We don't have to prejudge any of those conclusions yet. The fundamental thing is we have our homework done, right? So once we see how these policies finalized and they're not finalized yet. And there's a lot of very important details that go into these tax credit bills that you've got to take into consideration as to whether -- how valuable they are in terms of your production economics. We'll see how they finalized. We've got the rest of homework largely done, then we'll sit down with our partners then have a discussion about what we want to do. But the most rapid method will be to divert some of our current renewable diesel production to SAF if we wanted to get there pretty quickly. The decision on Diamond Green Diesel IV we'll just have to evaluate as we go forward.

Ben Bienvenu -- Stephens -- Analyst

Yes. Okay. Understood and appreciate the thoughts. Shifting gears a little bit and thinking about the food ingredients business, you guys continue to expand margins there. That business has been -- food ingredients has been kind of the unsung hero, I think, over the last year, given the focus on DGD and understandably, the enthusiasm there is warranted on DGD. Where are we on the curve of continuing to expand margins there? Any thoughts you could offer on the Food Ingredients business would be helpful?

Randall C. Stuewe -- Chief Executive Officer

Yes. Ben, this is Randy. I mean clearly, there's been a parallel strategy while it seems like 80% of the calls are DGD and rightly so, quietly we've been transforming the Rousselot business from, basically a gelatin supplier to a collagen company. And it's a two- or three-pronged strategy there with the Peptan being the collagen peptide that's out there now on the shelves around the world, predominantly in North America being launched in Europe today and Asia with extreme growth potential, double-digit growth potential driven by basically its solubility and solution here for different product applications. And so we worked long and hard. We always talk a little bit, and I have to give a little pitch. Darling is an innovation company.

We've been working on collagen peptides for, I don't know, almost nine years, and we got it right. And we're building our -- we've got our four plants running contemplating another one. That's Phase one, Phase two, you heard us roll out our discussion on Biomedical, that would be our X-Pure. And then we're also starting to work on different tissue regeneration and organ development off out of the biomedical area. So long story short, we're in a three- to five-year window of margin expansion and growth in that business unit as we go forward. We've taken a little headwinds with COVID against the collagen peptide business as the world shutdown and the supply chains got screwed up.

And then now we're -- and then we're struggling a little bit, to be honest, in South America today, different raw materials that the products are produced from are very tight and the raw material prices have escalated 200%, 300% from where they were a couple of years ago as the number of cattle being processed in South America has declined, both due to availability and labor and COVID and all of the above. So long story short, it's got a great trajectory. Stay tuned over the next three years. We keep throwing the breadcrumbs out there. It should accelerate nicely again next year. I think that's why Jim Stark has been very comfortable to talk about earnings growth next year is as that business expands.

Ben Bienvenu -- Stephens -- Analyst

Okay, thanks everybody. And good luck with the rest of the year.

Operator

Thank you. Our next question comes from Sam Margolin with Wolfe Research. Please go ahead.

Sam Margolin -- Wolfe Research -- Analyst

Hey, good morning. Wanted to just follow up on this ingredients M&A question, and I recognize that there's some competitive elements at play and you might not be able to reveal too many details. But in the past, you've talked about how valuations in the private universe of this industry were just sort of prohibitive relative to where Darling was trading, and it was undervalued, and so you're waiting for that to bridge. And I just wanted to ask about how that was playing out is the ask and for private acquisition targets coming down because they're not capitalizing today's prices? Or are there new sort of synergies and value creation tools that Darling has to pull that unlock more value? Just anything on what is kind of opening this window on M&A that's new relative to the past, call it, three to five years?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes. This is John. I'm not sure there's a lot that's new out there. I mean, I think what we've said in the past is when valuations get too high, we always have the opportunity of building and we've done a lot of that with Diamond as well as in our core business. I mean, the fact is the last four or five years, typically, every year, we've had anywhere from four to six plants under a major expansion or greenfields going in on our non-Diamond Green Diesel business around the world. So we've always had that alternative.

Having said that, I think we're an aggressive player in terms of acquisitions out there, and you're going to see us be aggressive in this round of companies that come up for sale. And I think we'll -- we always maintain price discipline. We see sometimes prices go in on businesses that are just simply ridiculous and nonsustainable going forward. We won't do that, but at the same point in time, I would anticipate you would see us being an aggressive participant in this round of acquisitions. I don't think you can count us out in these deals.

Randall C. Stuewe -- Chief Executive Officer

No. And I think that's well said, John. I think the thing -- as we get a chance of looking at lots of different businesses around the world, remember the other than since last December, there's been some pretty strong headwinds in these businesses around the world. And so they're having a little better year. This year, we're having a great year. Families make decisions at certain times and especially when the business turns, it might be time to sell. We're seeing a little bit of that around the world. Also, you've seen the platform that John referred to is we have the ability to take many of the products streams that come out of the slaughterhouses and the slaughtered animal byproducts business to their highest and best use.

And I know that's kind of an over cliche term. But whether we're making organic fertilizers, whether we're making pet foods, whether we're making heparin, there's all kinds of things now that as we have the platform built, we can bolt on these companies and turn them into something a little different than they were. So we do have a little different proposition than we had. But as John said, price is price, and we stayed on the sidelines when things got up into the big double digits here four, five years ago, and we will maintain that discipline as we go forward.

Sam Margolin -- Wolfe Research -- Analyst

Okay. I appreciate it. And then just one more follow-up on ingredients and margins, and I'll revert questions that investors have asked me, which is that as rendered fats maybe take another leg higher because, to your point, CI becomes an input factor in their value to a greater extent, and that manifests. There has been some questions that your suppliers -- the slaughterhouses will notice that and margin expansion might see some friction as a result. And I just want to know what your thoughts on that are, if that's something that you see as a risk that, in other words, your margins won't participate with pricing in the next leg?

Randall C. Stuewe -- Chief Executive Officer

No. I think we've been clear for about 18 years that a significant amount of our raw material procurement is on a shared commodity basis. And so they're getting the benefit of those higher CIs and those values. So end of the day, that's being passed on already, where we're getting our margin expansion is really in a lot of the different specialty products that we make out there and are able to transform. That's the capital we've put in play over the last five-plus years. So I don't really see any pressure there. I mean from time to time, if you said what is the pressure you have around the world? World -- it's energy prices, it's labor prices.

The sales price of our products today have basically nothing to do with the inflationary issues that are happening around the world. Those are the challenges we're facing on margin here is can we expand out our processing fees, our collection fees, our service models to recover those higher operating costs. So -- but the CI side or the feedstock or protein in price, remember the meat companies, for the most part, they are all making a lot of money too and part of it's coming from us is we're able to glean and give them more money.

Sam Margolin -- Wolfe Research -- Analyst

Thank you so much. Have a great day.

Operator

Our next question comes from Craig Irwin with ROTH Capital Partners. Please go ahead.

Craig Irwin -- ROTH Capital Partners -- Analyst

Good morning and thanks for taking my questions. Randy, $95 million higher feed segment margins is a beautiful thing, right? It looks like roughly 2/3 of that came off fats and used cooking oil. You're driving part of that with DGD II, right, taking 40% of the feedstock off the market. But can you maybe talk us through -- what do you see as the primary drivers of that margin expansion? And has this commissioning of DGD II had the full impact on the market yet for fats and oils? I know there was -- the biodiesel guys benefited last quarter from the backup with Ida, right, in the supply chain. But how does it play out for operations in the fourth quarter?

Randall C. Stuewe -- Chief Executive Officer

Yes. And I'll tag team this with John a little bit. End of the day, on a macro basis, both North America and globally, strong fat prices. Mean there's just solid demand for low CI feedstocks. Clearly, we learned how fragile that business is again with Hurricane Ida. When it becomes basically a mono customer business, meaning Diamond Green Diesel and all of a sudden, Diamond Green Diesel goes offline for 17 days. And when we're offline, what needs to be understood, offline means we could run. We just didn't have electricity. If you don't have electricity, you can't unload railcars. And so then you get this screwed up logistical pipeline. And so we had to defer stuff the fourth quarter here. We had to pay people to not ship and all of the above. And so -- but they were still having to move product to the market.

So that -- thus you are biodiesel guy. So I guess my short answer on the fat side, you've seen prices rebound as the supply chain gets back into Diamond Green, and we start to truly operate at these new levels. The protein side is really one. Specialty proteins remain very strong. Pet food demand is robust. The challenge is really logistics around the world, nothing that you haven't seen on the news channels every day of container freight. It isn't even really about pricing, it's availability. And so what we've seen on proteins, both here and in Europe is that the challenge has been to get it out of the primary market to the consumer has been really impacted.

Thus, you got to sell it to somebody and how do you do it, that's the word commodity, you've got to price it back into somebody else's use. So as we go to '22, we see fat prices where they're at today firm and protein prices should be pretty steady, maybe improve a little bit. It will depend on the soy crush around the world. But as we've all seen, we've got robust crops all around the world. And so -- but remember, meat demand and meat production is really solid out there today. So from our business model, raw material volume should be solid next year. Fat price is good. Protein price is steady.

Craig Irwin -- ROTH Capital Partners -- Analyst

Excellent. And my follow-up question, the roughly dozen renewable diesel plants out there that want to come online, maybe we get half of those that actually work and do produce, right? But many of those companies are approaching feedstock suppliers, either soy crushers or others for long-term commitments for feedstock, there's even conversations about processing agreements because they don't want to put out the capex to process for their own facility. Can you talk about whether or not you're in conversation with any of these, let's just call them, spec plants. Is there a possibility we see a long-term offtake with any of these third parties?

Randall C. Stuewe -- Chief Executive Officer

I don't know, John, you want to take that?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Sorry, are you asking if Darling would contract with somebody who's building a renewable diesel plant that will compete against us timing release. So if that's the question I can answer that in one word, no. We would not do that, of course. I think the answer is this, yes, there's a lot of conversation. There's a lot of folks running around trying to figure out, quite frankly, how to recreate what we've got at Diamond Green Diesel. The fact of the matter is we've positioned Diamond Green Diesel, we said this time and time again, in the right location with the right capabilities with the right logistics to be able to hit the right markets. That means that Diamond is always going to be the best place for fat to go in the North American marketplace.

Now people can talk all they want about cutting deals to do something else, but basic economics are basic economics. And I think the other thing that's important to consider here and this question was kind of alluded to earlier in this, at the end of the day, our fat suppliers going to get a part of the margin of the renewable diesel business. The fact of the matter is they do because the renewable diesel business is creating a higher price per fat. However, I have no business in the world that invest the capital and then turns around and gives away its margin to somebody who hasn't put any capital in it. And there seems to be a lot of conversation around that particular concept. That hasn't worked in American capitalism for 200 years.

I doubt it's going to work in the next 10 years that way. So at the end of the day, this is great for fat suppliers. We're well positioned. We're going to buy the fat because we're in the right location with the right capabilities. And that's how the economics are going to work going forward. People can have all sorts of conversations about all sorts of stuff. But at the end of the day, economics are economics.

Randall C. Stuewe -- Chief Executive Officer

And keep in mind, Craig, I mean the thing that we strongly about is it's the ultimate real estate play, location, location, location. And the ability for Diamond Green Diesel to originate raw material from around the world is just unheard of. No one else has that ability to unload ships directly at their dock, whether it's Port Arthur, whether it's Norco, with fat from Brazil, fat from China, fat from Australia, fat from Europe wherever it works. So as we look at this deal as some of the petroleum guys are out there making deals with soybean crushers, good luck. I mean at the end of the day, the CI is terrible and b, the economics rule here and will give us a very strong margin going forward.

Craig Irwin -- ROTH Capital Partners -- Analyst

That's a forceful answer I like it. Thank you, guys.

Operator

Our next question comes from Matthew Blair with Tudor, Pickering, Holt. Please go ahead.

Matthew Blair -- Tudor, Pickering, Holt. -- Analyst

Good morning and Congrats on the strong results. Randy, you had some comments on accelerating spendings in 2022. And I'm just hoping to clarify what the spend at DGD will be next year? At one point, we were thinking $350 million, but it sounds like it might be more. And then also, could you lay out any numbers for what the Darling stand-alone capex would be in 2022?

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Okay. So I think that, that one's for me.

Randall C. Stuewe -- Chief Executive Officer

No, I'm going to let you answer that, Sandra.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

But I'll be honest, I struggled -- we struggled all of us here with hearing that one. So I apologize. Can you help me go through that a little bit further?

Randall C. Stuewe -- Chief Executive Officer

Capital spend for DGD for 2023?

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

So capital spend for DGD for '23 should be around $800 million. Sorry, 2022. That's what I meant.

Brad Phillips -- Executive Vice President ,Chief Financial Officer

Around $800 million.

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Around $800 million.

Randall C. Stuewe -- Chief Executive Officer

And then our base business, what, Brad, $275 million...

Brad Phillips -- Executive Vice President ,Chief Financial Officer

$275 million to $300 million.

Matthew Blair -- Tudor, Pickering, Holt. -- Analyst

Yes. Okay. So $800 million for DGD and $275 million to $300 million for Darling stand-alone. Okay. Sounds good. And then, Randy, you reiterated that overall EBITDA guidance for 2021, do you have any updates for the segment level guidance? If we take the previous numbers, it would imply that feed would be coming off quite a bit quarter-over-quarter in Q4, whereas food would be moving up, is that the right conclusion?

James E. Stark -- Vice President Investor Relationss

Matthew, this is Jim. I think the best way to think about it is the upside is going to be in the Feed segment for us that the food would still be on track to be what we've had out there at around $200 million for the year. The Fuel segment winding up about where we are. So really just the higher results are going to be in the Feed segment.

Brad Phillips -- Executive Vice President ,Chief Financial Officer

Thank you.

Operator

Our next question comes from Ken Zaslow with Bank of Montreal. Please go ahead.

Ken Zaslow -- Bank of Montreal -- Analyst

Hey, good morning guys.

Randall C. Stuewe -- Chief Executive Officer

Good morning.

Ken Zaslow -- Bank of Montreal -- Analyst

Just a couple of follow-up, really easy. What was the decision in terms of share repurchases? And where do you stand with that going forward, particularly as your stock has kind of been taking a little bit of a backseat now?

Randall C. Stuewe, Darling Ingredients Inc.-Chairman & CEO

Yes. The Board has authorized and I think the number -- it's $200 million, right, John?

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Yes.

Randall C. Stuewe -- Chief Executive Officer

So $200 million of which we've used $98 million. Clearly, we have a strategy around here to opportunistically purchase from time to time as we see fit. And I think you'll see that behavior continue as we go forward here. Clearly, we're under some pressure again this morning. And we reflected on this in the Board meeting in the last couple of days. We've got a lot of great shareholders and owners in this company, and some of them have basis as low as $14. And so still the challenge within the stock here is a major position to unload can put some significant pressure on it as people exit. So end of the day, the forward look is quite bullish. But if you're wanting to move a big block, it can be a bit challenging. And thus, we're there, yes, I'd use the word defended if someone wants to pressure too hard opportunistically going forward.

Ken Zaslow -- Bank of Montreal -- Analyst

Great. And then you alluded to the point of -- you talked a lot about the feed on a couple of other questions. Are you fully capturing the full amount of the rise in the prices? Or is there more to capture as contracts keep on being reviewed? And how does that work? I just didn't fully understand that? Or is it just a margin shift based on your increased product offerings? I just didn't understand the full opportunity there.

James E. Stark -- Vice President Investor Relationss

The question is, in the past, we've talked about working on increasing our fees and services and are we still in that round of updating this?

Randall C. Stuewe -- Chief Executive Officer

Absolutely, Ken. And I think as we look -- there's two or three different, if you will, the supply chain feedstock business around the world, whether it's Europe, those are time-to-time contracts. Every couple two, three months, you renegotiate. We've had some really nice margin expansion there as capacity is relatively full. Canada, we've seen a nice return to historical levels there. And then in the U.S., we have focused on, if you will, the non-fully integrated large slaughterhouses to widening the margins. And it's been a two- or three-year process and program for us. I mean the challenge there for us is now to recapture the exponential rise in labor costs and energy as we move forward. So is it fully baked in? For the most part, yes. I think -- but from time to time, we'll be able to do a little better.

Ken Zaslow -- Bank of Montreal -- Analyst

I appreciate it. Thank you, guys.

Operator

Our last question today will come from Ben Kallo with Robert W. Baird. Please go ahead.

Ben Kallo -- Robert W. Baird -- Analyst

Hey, everyone. Good morning, Randy, I'd like how you pin the guidance on Jim. My first question, the carbon intensity, how does that make a difference in pricing and in costs? Could you explain that to us? And then you mentioned South America a couple of times, I think, too, and just we get the question all the time about the feedstock. And I think you've been way ahead of the curve on this, and everyone is trying to catch up now. How do you maintain that lead? And I guess just the third one part of that is, you've done a lot of acquisitions with family owned businesses. You've mentioned that. I think you've said in the past that COVID gets in the way a bit because you can't go meet them and do that. But where are we with that right now? And has that picked up on the activity?

Randall C. Stuewe -- Chief Executive Officer

Sandy, you want to take the CI?

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Yes. So in terms of the CI, I think if you look at the market, what you see is the lower CI feedstocks generally price higher. But those lower CI feedstocks also give you the greatest margin. And so that's what we're seeing there. I mean, they may cost more on the front end right now, but they're returning a much greater value.

Ben Kallo -- Robert W. Baird -- Analyst

Let's specifically, Sandy, into the pricing of the finished product. If someone can buy a gallon of renewable diesel made out of soybean oil or renewable gallon out of UCO, how does that work?

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

Yes. So again, if I look at UCO or corn oil or animal fat, those typically have traded higher, sometimes in soybean oil, not RBD soybean oil. But because we have the pretreatment capabilities, we're able to convert that and turn that into a higher margin finished product price in terms of renewable diesel because we're able to capture more value in terms of LCFS credits and things like that.

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

So just to add on to that, essentially, the way this works is the lower the carbon intensity of the field that you sell, the more valuable it is because the green premium associated with it is better. And the fact of the matter is waste fats, which is what we produce in our company, those fats have a lower carbon intensity. Fuels made from those fats have a lower carbon intensity store. And therefore, when they price into the marketplace, when we include the compliance element of the price, which is the grain premium, part of that being the LCFS, it gets you a higher value and therefore, better margin for the company.

Ben Kallo -- Robert W. Baird -- Analyst

And so just so I have it clear, I might need two gallons from -- if I use soy as a feedstock versus one gallon of just very rough.

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

So let me answer it this way. If I buy -- if I may, consumer of renewable fuels and I buy a gallon of renewable diesel based on vegetable oils versus a gallon of renewable diesel that's made from waste fats, UCO, animal fat, distillers corn oil, whatever it may be, the fact of the matter is the credit that I have is worth more on the gallon that I bought from the waste fats because it has a lower carbon intensity store. And therefore, it has more value to the purchaser of the fuel or the buyer of the credit than the alternative of the higher CI fab.

Randall C. Stuewe -- Chief Executive Officer

So John, a different way of saying that is we're selling a gallon of compliance...

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

That's right.

Randall C. Stuewe -- Chief Executive Officer

And it has more value to the obligated party it's made out of waste fast and vegetable oil, if you will. And so therefore, they are able to meet their obligations, and they're willing to pay us more for that.

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Well said.

Ben Kallo -- Robert W. Baird -- Analyst

And then just on the feedstock acquisition front, any help there?

Randall C. Stuewe -- Chief Executive Officer

There's no help there, Ben. I'm not going to answer that. But no, we're working hard on it around the world. I think the thing is, and it won't -- the secrets out there don't last very long until the government date is published. But clearly, DGD is and will be an importer from around the world. So I mean, clearly, we've got a supply chain system set up because we operate on the five continents today. That's always been the secret sauce of why we didn't have fear on feedstock. And so that will come clear. The rest of the stuff, it just takes time.

We're seeing a lot of businesses for sale -- potentially for sale, if you will, in Europe, Asia, South America, U.S. And we'll just see if we can get any of them home. Some are being driven by potential changes in tax policy. Some are succession planning. Some are just time to sell, just one out. But what I can always say to everybody is we buy good businesses with great management teams that can or do share our values. And so we're just -- we've got the ability like we've never had before to grow, and we will when the time is right at a fair value, continue to expand the moat around the machine.

Ben Kallo -- Robert W. Baird -- Analyst

Sounds good. Thank you, guys.

Operator

Ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to Randy Stuewe for any closing remarks.

Randall C. Stuewe -- Chief Executive Officer

Thanks, Grant. I appreciate everyone's time today and hope everyone continues to stay safe and have a wonderful holiday season. There's a list of upcoming events that Jim Stark's got in the IR deck that we'll be putting on out there, and we look forward to talking to you again soon.

Operator

[Operator Closing Remarks].

Duration: 68 minutes

Call participants:

James E. Stark -- Vice President Investor Relationss

Randall C. Stuewe -- Chief Executive Officer

Brad Phillips -- Executive Vice President ,Chief Financial Officer

Sandra Dudley -- Executive Vice President, Renewables and U.S. Specialty Operations

John Bullock -- Executive Vice President , Specialty Ingredients and Chief Strategy Officer

Adam Samuelson -- Goldman Sachs -- Analyst

Prashant Rao -- Citigroup -- Analyst

Tom Palmer -- JPMorgan -- Analyst

Manav Gupta -- Credit Suisse -- Analyst

Ben Bienvenu -- Stephens -- Analyst

Sam Margolin -- Wolfe Research -- Analyst

Craig Irwin -- ROTH Capital Partners -- Analyst

Matthew Blair -- Tudor, Pickering, Holt. -- Analyst

Ken Zaslow -- Bank of Montreal -- Analyst

Ben Kallo -- Robert W. Baird -- Analyst

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