If I strip out plywood, we were something like minus 1% in lumber and I think I’ve only seen one of our peers report so far, and we did, I would say, meaningfully better than our peers. So it’s a tough environment right now, but I think the backdrop is for things to get much better.
Michael Roxland: Got it. So that’s actually — that’s an interest comment you made when you strip out plywood, actually, lumber is only minus — the margin was minus 1% for the quarter?
Eric Cremers: Correct.
Michael Roxland: Got it. Okay. Thank you for that. On Chenal, you mentioned also just seeing a slower take-up by the large builders in 4Q. What are you seeing now from them? Has that accelerated? I guess those rates have come down, some of the builders that have been reporting have been showing pretty good demand in 4Q and the relics have been pretty strong for ’24. So I’m wondering if you’ve seen that reverse thus far in the quarter.
Wayne Wasechek: Yes, Michael, this is Wayne. Yes, we did have good absorption through most of the year. Q4, that’s when we started to see modest signs of slowing there. I think as we have an outlook into 2024 right now, we’re looking at about the same level of sales as we had in ’23. So we’re heading into the year with kind of the same view as coming out of Q4. Keep in mind, Chenal, this is one smaller market in Little Rock, Arkansas, it’s not a robust real estate market for single-family residentials compared to other kind of broader metropolitan areas in the south. And additionally, I think also keep in mind that Chenal market are regional builders. They don’t have the same balance sheet or tools available to offer incentives to homebuilders compared to large national builders.
So these regional builders instead of maybe building 8x homes, they might have built 6x, 5x and then like large national homebuilders, and they’re not going to build as many spec homes anticipating the sale upon completion. So I think that those kind of market dynamics play into it. So I think given that they’re not the same balance sheets as large homebuilders that they’re going to be a little cautious until rates start to move more.
Michael Roxland: Got it. Thank you, Wayne. And then just one last question. We’d love to get more of a strategic question. Over the last 18 months or so, we’ve seen a number of mill closures, line closures you have in Viva events contending with a lot of its own problems there, structuring and the impact on the demand for pulpwood. So I’m just — when I think about pulpwood in general, with the mill closures, line closures and viva. I realize that’s less valuable than sawtimber, but nevertheless helps with cash flow. How do you think about irritation in your harvest planning with pulpwood facing this straightly demand decline?
Wayne Wasechek: Yes. Certainly, that’s an area we’re focused on. I think with these announced closures, as Eric mentioned earlier, we haven’t had a direct impact to us. And then you kind of break that down between volume and price I think from a volume perspective, we continue to move volume. We have strong relationships with our customers, especially our large customers. And then also with our size and scale, we can move volume to alternative customers. From a volume perspective, certainly, we can move it. I think from a pricing dynamic, yes, clearly less demand with mill closures, creates less demand, and that has an overall impact on the pricing environment. And that’s what we’ve seen very kind of been flat there on the pulpwood side and heading into relatively flat still.
So I think that’s the near term. I think longer term, we’re — we are very active in the market about what are some longer-term opportunities — right now, there’s — we’re in discussions with a lot of different producers, biomass producers, from biopower to pellets to BioFuels, Bioplastics that would utilize pulpwood. And I think those will create opportunities. Now this investment will take a bit of time, but we do believe that this will bring more demand and attention to certain wood baskets in the South.
Michael Roxland: Got it. Thank you very much. And good luck in ’24.
Wayne Wasechek: Thanks.
Operator: Your next question comes from the line of Matthew McKellar from RBC Capital Markets. Your line is open.
Matthew McKellar: Hi, good morning. Thanks for taking my questions. Firstly, are you able to comment on what your first kind in development pipeline looks like beyond this first project or developing in the South. And maybe comment on how we should be thinking about the pace of project development from delivery looking out beyond ’24?
Wayne Wasechek: Yes. So we do have this first project well underway. It’s just under 50,000 acres. We’re pretty excited about it because we’ve built up like three years of carbon credits and inventory. So the first sale is probably going to be close to 0.5 million credits. We are building our pipeline. We’ve got a number of acres that we think the highest value, the best value for those acres. It’s going to be in a carbon outcome. We want to see how this first project plays out. And right now, I think we’re eying maybe another 100,000 acres that could be well suited for a carbon outcome. But of course, it all depends on the carbon price and the outlook for the carbon price. So the higher we see those prices go, the more acres we’re going to think about have a better outcome for carbon versus traditional timber. So we’ll have to see how that develops.
Matthew McKellar: Okay. Great. Thanks for that. And then just one more for me. What’s your sense here today of where channel inventory levels sit for wood products as we wrap into the building season?
Wayne Wasechek: I think there are just rock bottom levels. They — I think what’s changed over the past couple of years is especially with the price run-ups that we saw back in ’21 and ’22, dealers just don’t want to carry inventories. They want just-in-time deliveries, which is generally why Southern Pine carries a premium over SPF. And I think what’s happened here recently is with the cold weather that’s come across the U.S., a lot of job sites were shut down. There’s no activity. So dealers went to even lower levels. So I think where we’re at right now is just at rock bottom levels. So hopefully, with this warmer weather that’s showing up, we’ll see some buying activity here.
Matthew McKellar: Thanks very much. I’ll turn it back.
Wayne Wasechek: Thanks.
Eric Cremers: Thanks.
Operator: [Operator Instructions]. Your next question comes from the line of Kurt Yinger from D.A. Davidson. Your line is open.
Kurt Yinger: Great. Thanks so much. Good morning, Eric and Wayne.
Eric Cremers: Good morning.
Kurt Yinger: I know that the 34,000 acre disposition, you talked about the young age class profile. But just curious if you could provide any details on maybe harvest levels and any EBITDA contributions from that acreage over the past year or maybe what you’re expecting in terms of a five year plan or anything like that?
