Devin Stockfish: Yes. Obviously, any time you see a customer go out of business or take a mill down, that’s not great for the market. That does ultimately have some impact on the overall demand level. But we generally try to work pretty proactively to have long-term agreements, both for residuals on the wood products side, the pull logs on the Timberland side. So nothing that’s happened to date would cause me a whole lot of concern that it’s going to have a material impact to us specifically. But nevertheless, we do still need to find homes for those residuals and pulp logs. And so it’s in everybody’s interest to make sure that these customers are healthy long-term.
Anthony Pettinari: Got it. Got it. And then just maybe shifting gears to Wood Products and maybe a similar question on lumber. With random lengths around 375, are you seeing or do you anticipate any kind of supply response maybe were below cash cost for some of the higher cost producers? And then I guess 1 thing that we’ve heard this year is that some mills are hesitant to let go of labor because they feel like if they let them go, they may not be able to get them back in this kind of labor market. Has that been like a real dynamic that you think has impacted supply? And I don’t know if you just have any more kind of broad comments about kind of lumber supply with prices where they are.
Devin Stockfish: Sure. Yes. I mean it’s always hard to say what others are going to do, so I can’t necessarily speak to that other than to just point out that historically, when we’ve seen lumber prices go below cash costs for any period of time, there ordinarily is some sort of supply response. And our estimation is that in certain regions, a decent amount of the ongoing supply is probably underwater from a cash standpoint. The issue with labor, I think that certainly has been a concern and that’s probably something that’s going to give producers a little bit of pause before taking material downtime. But that being said, ordinarily, you’re only going to run so long, losing money before you ultimately make those decisions. And I would say, although certainly not great, we have seen the labor market improve somewhat versus earlier this year.
I think if we were having that same discussion in Q1 or Q2 of this year, I think you probably would have been even more reluctant because the market was so tight. But hopefully, that will continue to get better as we move forward.
Anthony Pettinari: Okay. That’s very helpful. I’ll turn it over.
Devin Stockfish: Thanks.
Operator: Our next question comes from Susan Maklari with Goldman Sachs. Please proceed with your question.
Susan Maklari: Thank you. Good morning, everyone.
Devin Stockfish: Good morning, Susan.
Susan Maklari: Good morning. My first question is staying with Wood Products. It seems like the move in volumes that you saw in a lot of those products over the course of the quarter, is in contrast to the outlook that you gave for housing starts and especially, I think the commentary and the outlook that the builders have shared over the course of this earnings season. As you think about the setup for the industry going into the end of this year and maybe even into early 2024, how do you think that, that will come together? And what could it suggest for your ability to operate and to gain share within that segment?
Devin Stockfish: Yes, I mean our view on what’s going to happen with housing and I’ll just caveat that, that there’s obviously a lot of variables at play, but when we talk to the homebuilders, and I’ll start particularly here with the larger national builders, my view is they’re going to continue to build. It’s going to require ongoing rate buy downs and other incentives to continue to get people into that market. But with such little existing inventory on the market, it is a demand driver that’s helping weather what ordinarily would be a very difficult period at these kinds of mortgage rates. But when we talk to the big builders, I think they’re going to continue to build. I suspect they’re going to build slightly up relative to 2023.
I think the more challenged into that market is the medium and particularly the smaller builders with these higher interest rates, I think that puts some pressure on them in terms of financing land and some of their other expenses, they don’t necessarily have all of the same tools available to help getting some of those new homebuyers into a home. So net-net, I think single-family next year might be up slightly, but I think the market share for the big national builders will continue to grow. And for us, we have a diverse customer base. Obviously, we do business with all the big builders. We have good relationships with them. I would continue to — I would expect us to continue to grow our business with them as they grow. We also do business with the medium and small builders as well.
And so we’ll just have to be nimble and to allocate our product to whichever builders are growing their market share. But notwithstanding all the doom and gloom that you hear about housing, I do think people want homes were massively under built. There are not a lot of them available. A lot of the people that are in their early 30s that want a home are ready to go out and be home buyers and homeowners. And so somebody is going to have to meet that demand. And I give a lot of credit to the builders to navigate this environment. They’ve done a remarkable job. And all things being equal, we would expect that to continue next year.
Susan Maklari: And just building on that very quickly, Devin. How do you think about the channel inventories that are out there as we go into the fall? Is there anything you would highlight or call out there?
Devin Stockfish: Yes. On lumber, it’s still pretty lean. I think what we’ve seen is just nobody really has a good beat on the direction of building as we get into these winter months, and there’s just a lot of negative commentary in the press. So I think people are fairly reluctant to build inventory. So people are keeping their inventories pretty light on the lumber side. I’d say on OSB relative to this time of year, it’s probably at or maybe slightly below normal. So maybe not as lean as lumber, but certainly not big inventories either. And then AWP, like I said, at least from our vantage point, we’re on pretty extended order files right now. And so not a whole lot of extra EWP in the system from our standpoint.
Susan Maklari: Okay. That’s helpful color. And then I just want to squeeze one more in, which is congratulations on getting the forest carbon project in Maine approved. When you think about the progress that you’re making there and the $100 million target for EBITDA that you’ve set out by the end of 2025, does that $100 million — is that based on volume? Or is it based on the pricing to some extent and where these credits can come in? And any updated thoughts on that as you’ve made this — as you hit this milestone?
