ジ・アンダーソンズ (ANDE) 2026年第3四半期決算説明会：EPS成長と9億1500万ドルのHLCP取引

要約

• ジ・アンダーソンズが発表した2026年第3四半期の当社株主に帰属する純利益は4,600万ドル（希薄化後1株当たり1.36ドル）となりました。調整後EPSは前年同期（2025年第3四半期）の0.84ドルから1.38ドルに上昇しました。
• 調整後EBITDAは、アグリビジネスとリニューアブルズの両部門で業績が改善し、7,800万ドルから1億100万ドルに増加しました。
• 直近12カ月間の調整後EPSは6.67ドルに達し、前年同期の2.56ドルから上昇しました。経営陣は、これが2028年終了時点でのEPS 7ドル達成という目標を裏付けるものであると述べています。
• リニューアブルズ部門の税引前利益は、前年同期の帰属調整後税引前利益4,600万ドルから6,300万ドルに増加しました。東部地区のトウモロコシ・ベーシス低下、副産物価値の上昇、および効率的な操業により、エタノールボードクラッシュマージンの縮小が相殺されました。
• 同社はハーベストン・ロー・カーボン・パートナーズを運転資金を含めて9億1,500万ドルで買収することに合意しました。経営陣は、負債によって資金調達されるこの取引が直ちにEPSを向上させ、今後3年間の各年で2億2,500万ドルから2億5,000万ドルのEBITDAを創出すると見込んでいます。
• 経営陣は、この買収により年間のエタノール生産能力が取引完了時点で約7億3,000万ガロン、2027年第3四半期までに7億6,000万ガロンに拡大すると予想しています。

主要財務業績

当四半期の実効税率は13%でした。同社は通期の調整後実効税率を14%〜18%と予想しています。

事業および業績動向

リニューアブルズ部門

リニューアブルズ部門の税引前利益は6,300万ドルとなり、2025年第3四半期の帰属調整後税引前利益4,600万ドルから増加しました。EBITDAは調整後EBITDAの6,700万ドルから7,800万ドルに増加しました。

エタノール工場の収益性は、東部地区のトウモロコシ・ベーシスの低下、副産物価値の上昇、および効率的な工場操業の恩恵を受けました。これらの要因により、エタノールボードクラッシュマージンの前年同期比で1ガロン当たり0.10ドルの低下が相殺されました。

コーン油価格の改善と再生可能原料取扱量の増加も業績を後押ししました。しかし、海外産原料との競合やバイオディーゼル工場からの需要減少により、再生可能原料のトレーディングは減少しました。

インディアナ州クライマーズでのボトルネック解消プロジェクトは、2027年第3四半期までに生産能力（ランレート）を年3,000万ガロン引き上げる目標を維持しています。経営陣はまた、エタノール生産の炭素強度を低減するための追加プロジェクトも検討しています。

アグリビジネス部門

アグリビジネス部門の帰属調整後税引前利益は前年同期の200万ドルから900万ドルに増加しました。調整後EBITDAは2,900万ドルから4,000万ドルに増加しました。

穀物市場のボラティリティ高まりがトレーディングの機会を拡大させました。資産ネットワークは、小麦の保管料収入の減少、コーンベルト西部での収量低下、および地域需要の弱さにより圧迫を受けました。また、収穫の遅れも当四半期の保管料収入を制限する要因となりました。

経営陣によると、東部地域の事業では大豆が過去最高の収量を記録し、順調な受入に伴う好調な収穫が締めくくられつつあります。トウモロコシと大豆の合計収穫量は同社の当初予想を上回る見込みであり、荷揚げマージンや将来の保管料収入を裏付けるものとなっています。

ヒューストン港のプロジェクトが稼働を開始し、ジ・アンダーソンズの国内および輸出用大豆粕の対応能力が拡大しました。秋の肥料散布および販売も順調にスタートし、農家は散布量を維持しており、東部地域での販売量も堅調です。

経営陣の見通し（ガイダンス）

同社は買収を除く2026年の設備投資額について、引き続き約2億2,500万ドルを見込んでいます。

経営陣は、2027年に向けてエタノール生産量が増加すると予想しています。また、2026年第4四半期および2027年のバイオディーゼル生産の拡大により、再生可能原料のトレーディング機会がさらに創出されると見込んでいます。

アグリビジネス部門の収益計上時期は、2026年第4四半期と2027年第1・第2四半期の間でズレが生じる可能性があります。経営陣はこの不確実性の要因として、収穫の遅れ、コモディティのキャリー、および収穫期に受け取った穀物の販売時期に関する判断を挙げています。

ハーベストン・ロー・カーボン・パートナーズの買収に関して、経営陣は以下の見通しを示しました。

• 運転資金を含む買収価格は9億1,500万ドル。
• 既存のコミットメントラインからの約3億ドルと、追加のコミットメント型長期負債6億1,500万ドルによる資金調達。
• 取引完了時点の長期有利子負債対EBITDA比率は約2倍となり、同社の目標値である2.5倍未満を維持。
• 統合後の予想キャッシュフローに基づき、買収関連負債の大半は5年以内に返済される見込み。
• 今後3年間の各年で2億2,500万ドルから2億5,000万ドルのEBITDAを見込む。
• 取引完了は2026年第4四半期後半または2027年初め頃を予定。

買収対象の工場は現在、年間約2億1,500万ガロンのエタノールを生産しています。経営陣は、低コストでのボトルネック解消により、約24〜36カ月以内に合計生産能力を2億5,000万ガロン以上に拡大できると考えています。

リスクおよび注視事項

• 西部地域の干ばつ被害や同地域の穀物取扱量の減少により、アグリビジネス資産への圧迫が続く可能性があります。
• 収穫後の市場環境により、穀物トレーディングや保管料収入の計上時期が四半期を跨いでズレる可能性があります。
• 副産物価値とトウモロコシ・ベーシスが相殺要因となったものの、エタノールボードクラッシュマージンは前年同期を下回りました。
• バイオ燃料政策や割り当て再配分を巡る不確実性を背景に、D6 RIN価格が乱高下しました。経営陣は、採算性は国内でのブレンドを維持するのに十分な水準にとどまっていると述べています。
• 第3四半期は、海外産原料との競合およびバイオディーゼル需要の低迷が、再生可能原料のトレーディングの重荷となりました。
• ハーベストンの買収はすべて負債で調達されるため、取引完了時に長期有利子負債対EBITDA比率が1.3倍から約2倍に上昇します。
• 炭素回収・貯留（CCS）のタイムラインは、IBECおよびクライマーズ施設におけるクラスVI圧入井許可などの規制審査やプロジェクトの実行状況に引き続き依存します。

アナリスト質疑応答の要点

経営陣は、ハーベストンの買収によりジ・アンダーソンズの事業がノースダコタ州へ拡大すると述べました。同州において同社のプレゼンスは現在限定的ですが、買収する工場は余剰トウモロコシ、鉄道網、ならびに米国およびカナダの低炭素燃料市場へのアクセスを有しています。

ブルー・フリント（Blue Flint）はすでに敷地内で炭素貯留を行っており、近隣の発電所からの廃蒸気を利用しています。ダコタ・スピリット（Dakota Spirit）は2027年初頭、IBECは2028年末に炭素貯留を開始する見込みです。経営陣はブルー・フリントの炭素強度スコアを業界最低水準と評しており、ダコタ・スピリットも貯留開始後に同様の水準を達成すると予想しています。

経営陣は、非常に低いまたはネガティブな炭素強度スコアを達成するために必要な営業費用（CO2の圧縮、輸送、地下圧入コストなど）を考慮せずに、税額控除によるEBITDAをベースとなるエタノール収益から単純に切り離して考えることに対して警鐘を鳴らしました。

穀物トレーディングについて、経営陣はトウモロコシ先物価格が0.70〜0.90ドル下落した後、農家の売却が大幅に鈍化したと述べました。同社は、これがトレーディングや保管料収入の機会を生み出す可能性がある一方で、利益が2026年第4四半期に計上されるかそれ以降の四半期に計上されるかに影響を与える可能性があると考えています。

同社は該当する決算期終了後にヘッジ活動を報告するとして、第4四半期のエタノール・ヘッジポジションについては言及を控えました。

決算説明会トランスクリプト全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, ladies and gentlemen, and welcome to The Andersons 2026 Third Quarter Earnings Conference Call. My name is Joe, and I will be your coordinator for today.

[Operator Instructions]

As a reminder, this conference is being recorded for replay purposes. I will now hand the presentation to your host for today, Mr. Mike Hoelter, Vice President, Corporate Controller and Investor Relations. Please proceed.

Michael Hoelter

Good morning, everyone, and thank you for joining us for The Andersons Third Quarter Earnings Call. We have provided a slide presentation that will enhance today's discussion. If you are viewing this presentation via the webcast, the slides and commentary will be in sync. This webcast is being recorded, and the recording and the supporting slides will be made available on the Investors page of our website shortly.

Please direct your attention to the disclosure statement on Slide 2 as well as the disclaimers in the press release related to forward-looking statements. Certain information discussed today constitutes forward-looking statements that reflect the company's current views with respect to future events, financial performance and industry conditions.

These forward-looking statements are subject to various risks and uncertainties. Actual results could differ materially as a result of many factors, which are described in the company's reports on file with the SEC. We encourage you to review these factors.

This presentation and today's prepared remarks contain non-GAAP financial measures. Reconciliations of the GAAP to non-GAAP measures are included within the appendix of this presentation. On the call with me today are Bill Krueger, President and Chief Executive Officer; Brian Valentine, Executive Vice President and Chief Financial Officer; and Mark Simmons, Executive Vice President, Renewables. After our prepared remarks, we will be happy to take your questions. I will now turn the call over to Bill.

William Krueger

Thanks, Mike. Good morning, everyone, and thanks for joining the call to discuss our third quarter results and outlook. I'd like to start by thanking all our team members as they work safely through the busy harvest season across our plants and elevators. We are making considerable progress in accomplishing our One ANDE mindset and culture. Our third quarter results are just one example as we delivered record third quarter EPS for our shareholders. Our year-over-year trailing 12-month adjusted EPS has grown from $2.56 in the third quarter of 2025 to $6.67 today, putting us well on our way to achieve our stated target of $7 EPS exiting 2028.

Starting with Renewables. While successfully performing all our shutdowns, we are able to generate year-over-year improvements on our base ethanol production due to improved co-product values, lower corn basis and focused plant operations. These results are even more impressive when you consider that board crush was down $0.10 per gallon year-over-year.

With volatility back in the grain markets, our Agribusiness segment delivered improved results in our merchandising businesses. Our grain assets were impacted by less space income on wheat and reduced grain volume due to lower yields and weak demand in the Western corn belt. The Port of Houston project is now complete. We've initiated both our originations and marketing programs kicking off our combined domestic and export soybean meal strategy. We've made substantial progress on our Clymers, Indiana debottlenecking project with a targeted run rate increase in production of 30 million gallons by Q3 2027.

We announced this morning the signing of a material acquisition, which we will speak to at the end of our prepared remarks. With that overview, I'll turn the call over to Brian to discuss our financial results. I'll be back after his update to discuss the outlook for the fourth quarter and early 2027.

Brian Valentine

Thanks, Bill, and good morning, everyone. We're now turning to our third quarter results on Slide #5. In the third quarter of 2026, the company reported net income attributable to The Andersons of $46 million or $1.36 per diluted share and adjusted net income of $47 million or $1.38 per diluted share.

This compares to adjusted net income of $29 million or $0.84 per diluted share in the third quarter of 2025. Gross profit increased for both business groups as fundamentals were improved over the prior year. Adjusted pretax earnings were $54 million compared to $31 million in 2025 with both segments contributing to the increase. Adjusted EBITDA for the third quarter was $101 million compared to $78 million in 2025.

Our effective tax rate varies each quarter based primarily on tax credits earned and the amount of income or loss attributable to noncontrolling interests. We recorded taxes at an effective rate of 13% for the third quarter and expect our full year adjusted effective tax rate to remain in the range of 14% to 18%.

Next, we'll move to Slide 6 to discuss cash, liquidity and debt. We generated cash flow from operations before changes in working capital of $83 million in the third quarter of 2026 compared to $68 million in 2025 with the increase being driven from the stronger year-over-year earnings. In addition, we recently signed an agreement to sell the majority of the 45Z tax credits that we are generating in 2026 and expect that most of the cash should be received later this year. Our short-term borrowings are up as we have seen increased market volatility in 2026. However, our readily marketable grain inventories remain well in excess of our short-term debt, which is consistently the case throughout the ag cycle.

Next, we'll take a look at capital spending and long-term debt on Slide #7. Third quarter capital spending was $60 million compared to $67 million in 2025. This includes the funding of previously announced long-term growth projects as well as normal maintenance capital. We continue to take a disciplined, responsible approach to capital spending, which we expect will be approximately $225 million for the year, excluding acquisitions. We also completed share repurchases of approximately $15 million this quarter.

Our long-term debt-to-EBITDA is 1.3x, which remains well below our stated target of less than 2.5x. We continue to evaluate various acquisitions and organic growth projects and have a strong balance sheet that will support investments that meet our strategic and financial criteria.

Now we'll move on to a review of each of our business segments, beginning with Agribusiness on Slide 8. The Agribusiness segment reported adjusted pretax income attributable of $9 million compared to $2 million in the third quarter of 2025. Agribusiness saw good improvement this quarter and on a year-to-date basis remains well ahead of the prior year. Strong execution and volatility during much of the quarter provided more opportunities for our merchandising businesses. However, with a late start to harvest, our asset footprint saw less space income in the quarter.

Our fertilizer results were similar to 2025 in this seasonally quiet quarter. We also remain pleased with our continued focus on optimizing our business portfolio, which has resulted in ongoing benefits year-over-year. Agribusiness had adjusted EBITDA of $40 million in the third quarter compared to $29 million last year.

Moving to Slide 9. Renewables had another strong quarter, generating pretax income of $63 million compared to adjusted pretax income attributable of $46 million in the third quarter of 2025. Our ethanol plants continued to perform well with efficient operations. Plant profitability was up year-over-year on lower Eastern corn basis and higher co-product values despite lower ethanol board crush margins.

While we have benefited from improved corn oil prices and higher renewable feedstock volumes, our merchandising results were lower year-over-year on competition from foreign feedstocks and lower demand from bio-based diesel plants. Renewables had EBITDA of $78 million in the third quarter compared to adjusted EBITDA of $67 million last year. And with that, I'll turn things back over to Bill for some comments about our outlook and to introduce Harvestone Low Carbon Partners.

William Krueger

Thanks, Brian. In Agribusiness, we've discussed the Western drought conditions and reduction of volumes in that region. While these conditions may have a negative impact on our Western assets, it provides an opportunity for our merchandising teams to creatively meet the customers' needs. This is a strength of our complementary asset and merchandising portfolio. The unusually high rainfall across much of the U.S. in August appears to have improved soybean yields to above average nationally. The rainfall will replenish subsoil moisture and combined with market prices should drive increased planted acres of both hard and soft wheat, which should benefit Agribusiness.

Our Eastern assets are finishing up what has turned into a great harvest. We're seeing record soybean yields with strong receipts. The corn crop has shown higher than normal variability in yields, but in total, we expect to see our harvest volumes for corn and soybeans exceed initial expectations. This should provide opportunities for improved elevation margins and space income. This further supports the value of our vertical integration of originating lower cost and higher quality corn into our ethanol plants.

While we are optimistic about the fundamentals in Agribusiness, post-harvest market dynamics could impact timing of income over the next 2 quarters. The tailwinds in biofuels should continue to drive solid domestic corn and soybean demand, which is critical for the U.S. farmer. With the favorable October weather, our fall applications and fertilizer sales are off to a good start. Farmers are maintaining application rates and volumes in the East are solid.

As mentioned earlier, the Port of Houston project is operational, expanding our domestic and export soybean meal capabilities. We believe this location will be an outlet for Midwestern origins and a competitive alternative for global buyers. We feel that our history of working with CPG companies on sustainability goals will provide us with a competitive advantage as we roll out our regenerative ag programs for corn originations into our ethanol plants. These programs are built on leveraging traceability back to the farm gate, agronomic practices and compatibility with lower carbon objectives. Our goal is to reward the farmers who participate in these programs to reduce the carbon intensity of the corn they produce. This will benefit both our Agribusiness and Renewables segments, again demonstrating our One ANDE approach.

In the Renewables segment, we expect to see increased production of ethanol as we move into 2027. U.S. ethanol exports are expected to remain strong. Elevated global fossil fuel prices and the RVO continue to support ethanol demand and favorable blending economics. The passing of year-round E15 would drive even more blending, reducing the cost of gasoline to the American consumer.

We are evaluating additional projects to reduce the carbon intensity of the ethanol we produce as we believe this will be accretive to long-term shareholder value. Our renewable diesel feedstock merchandising business expects to see increased production in bio-based diesel in Q4 and 2027 to meet the RVO requirements and this should provide additional growth opportunities for our feedstock merchandising business.

Next, I'd like to share some information about the acquisition we announced this morning. As you know, increasing our ethanol production through capital projects and acquisitions has been part of our stated strategy. We've evaluated several plants with a focus on location, efficiency, proximity to feedstock and access to North American LCFS markets. We are now pleased to announce the signing of an agreement to acquire Harvestone Low Carbon Partners, HLCP, the owner and operator of 3 ethanol plants that produce approximately 215 million gallons of ethanol annually. These 3 plants include Blue Flint Ethanol and Dakota Spirit located in North Dakota and Iroquois Bio-Energy Company, IBEC, located in Indiana. HLCP has a key position in the production of low-carbon ethanol. Blue Flint has been sequestering carbon on site for approximately 3 years and uses waste steam generated by a nearby power plant to attain one of the lowest carbon intensity scores in the industry.

Dakota Spirit is expected to begin sequestering carbon in early 2027 and uses waste steam generation in its process. Both North Dakota plants are well located to reach U.S. and Canadian low-carbon ethanol markets. The IBEC plant in Indiana has filed their Class VI well permit with the EPA and is in technical review, much like our Clymers, Indiana plant. IBEC is expected to begin sequestering carbon in late 2028. All 3 of the HLCP plants have potential debottlenecking opportunities and have been well maintained.

HLCP provides us with several competitive advantages. Location of the North Dakota plant gives us exposure to Western corn belt markets in a region that has exportable surplus of corn with acres forecasted to increase. These plants also have access to both U.S. and Canadian low-carbon fuel markets due to location and their rail service. Blue Flint and Dakota Spirit will be 2 of the limited number of plants able to sequester carbon on-site in 2027. This is a competitive advantage compared to pipeline options.

Finally, we bring our vertically integrated approach to sourcing corn and merchandising ethanol and co-products. With the larger production footprint, we'll have more merchandising opportunities. We have agreed to a purchase price of $915 million inclusive of working capital. Approximately half of the purchase price is attributed to expected 45Z and 45Q tax credit cash flows, with the remainder of the underlying base ethanol operations and additional low-carbon opportunities. The acquisition will be financed entirely through debt with approximately $300 million from existing revolver credit facility and $615 million in additional committed long-term debt.

At transaction closing, we expect long-term debt to EBITDA to be approximately 2x, well below our target of less than 2.5x. As a result of the significant cash flow that we are projecting from the combined enterprise, we expect to have most of the debt repaid within 5 years. We expect this transaction to be immediately accretive to EPS and generate EBITDA in a range of $225 million to $250 million each of the next 3 years.

We are excited to welcome the HLCP employees to the ANDE family and believe they will add strength to our ethanol team. We anticipate closing later in the fourth quarter or soon after the first of the year. In our 2025 Investor Day, we identified several strategic and financial criteria for growth through M&A. This acquisition checks all the boxes, and we are looking forward to the combination of these plants with the ANDE ethanol footprint. We bring deep expertise in grain origination, commodity merchandising, logistics, ethanol and co-product marketing that complement HLCP's existing capabilities and positions the combined team to unlock additional value. We anticipate on closing of the transaction that our production volume will reach approximately 730 million gallons annually, moving to 760 million gallons in Q3 2027.

Our team first started talking with HLCP in late 2024 about a potential transaction. We have been able to spend time with their leadership team and understand their plans very well. We believe that the leadership and operational integration will be seamless. When we look at the commercial integration, we already have established teams that merchandise and market all the products. And this will provide us with the opportunity to handle 40% more volume. The strength of the combined teams should provide a solid foundation to ensure a successful integration. We are happy to answer your questions at this time.

Operator

[Operator Instructions]

And our first question here will come from Ben Klieve with StoneX.

質疑応答

Benjamin Klieve

Congratulations on both the nice quarter and especially on the acquisition announcement. I'd like to start, Bill, where you left off regarding the -- kind of a relationship and the history here with the acquisition. You noted that, that conversation began at the end of 2024. I'm curious if you can elaborate a bit on your relationship with them over the years. Is this a -- have these been facilities that have been customers of yours from a trading perspective? I'm just wondering kind of how deep your relationship is in the context of you now are feeling comfortable enough to pull off the news of the acquisition.

William Krueger

Yes. How their markets work, we would have very little transactional business with them. Their ethanol would tend to flow to different destinations than our 4 plants do, which is one of the reasons why we were very interested in them. They have ample corn demand right in their backyard. They have a solid feed business. And the DCO markets, we do interact with them in that area. But that's kind of the beauty of this acquisition -- or potential acquisition, excuse me, is that there is a lot of synergy value and just straight growth into geographic regions that, quite honestly, if you look at North Dakota corn, it's one of the few areas that are left that The Andersons doesn't have a strong presence in, and this will provide that.

Benjamin Klieve

Very good. That's helpful. And then my follow-up on this is that it seems like you are uniquely compelled by the opportunity provided by the carbon sequestration throughout the 3-facility footprint here. And I'm wondering if you can talk about how your perspective on acquiring this business has evolved over the last couple of years as their investments into CCS have progressed and especially as the kind of regulatory dynamic around carbon sequestration has evolved? Is this something that really became a catalyst for an acquisition here recently? Or am I overthinking it?

William Krueger

No, I don't think you're overthinking it at all. The Andersons is focused on having the capabilities to sequester carbon for a number of years, going back to one of our plant in Ohio, maybe 7, 8 years ago. So this has been on the forefront of our strategy and one that we've talked about publicly, we started talking publicly about Clymers 3 years ago, and we're still -- we're very close to having our well permit -- or Class VI well permit, but what we really like about this opportunity is, we are in the carbon sequestration game on site the day after closing.

And we have spent a lot of time analyzing and researching the long-term value of low CI ethanol and the benefits that it will provide not only in North America, but globally. So I wouldn't say this has been a shift. It's been a strong focus. And one of the reasons why we've been committed to getting the CCS program going at Clymers.

Benjamin Klieve

Got it. Very good. Well, I appreciate that color. Congratulations again to you and the whole team on this.

Operator

And our next question will come from Derrick Whitfield with Texas Capital.

Derrick Whitfield

Also congrats on the quarter and acquisition. Wanted to start with Harvestone first. The EBITDA generation from those facilities appears very strong. My quick search indicates their nameplate is in the 215 million to 220 million gallon range on an aggregate basis? And kind of when I think about the efficiencies that you guys operate your plants up to date, could you offer some perspective on the degree of the bottlenecking you could achieve against that capacity? And then also just where does the CI sit on average today across those plants?

William Krueger

Yes, I can certainly take that. I'll probably have Mark Simmons, our EVP of Renewables answer part of the question for you. The total capacity today, as we've stated, is 215 million gallons. We believe that all 3 plants have debottlenecking opportunities that will be relatively low cost of capital. And as we've been able to do that at our plants over the past couple of years, we believe there's an opportunity to certainly surpass 250 million gallons across the 3 plants combined, and it will take probably 24 to 36 months to achieve, maybe a little less than that. So yes, that is one of the thoughts that we had and was -- gave us a lot of interest early in it.

Now in terms of efficiencies in the 3 plants, this management team is excellent at running plants. It was a lot of fun with our team and their team when we were on site looking at them. They literally talk and think about successful operation of ethanol plants, the exact same. The Dakota Spirit plant has a different technology, Thermal Kinetics. The other two are ICM, which we obviously know ICM very well. But we were impressed with that technology and the potential.

So in terms of us bringing immediate improvement to their plant operations, I would tell you it's only going to come through the economies of scale because the team they have in place today is really good. I will turn over the CI questions to Mark.

Mark Simmons

Yes. Thanks, Bill. And starting with the CI scores, BFE has one of the lowest CI scores in the industry today due to the efficiency of the plant. We talked earlier in the earnings call about the waste steam that provides energy to the plant. That's one component of it and then also the carbon capture and storage capabilities. And DSA on sequestering will have very similar. So lowest in the industry from a CI perspective.

Derrick Whitfield

And then just as my follow-up. You guys are really excited -- extremely excited about the downstream market exposure you're gaining through this acquisition. I guess could you maybe offer some perspective on where the product is being sold today? And if you think about your existing business today in your ethanol markets you're selling into, is it fast track your ability to find higher value markets as you kind of think about piecing this together?

William Krueger

Good question. The IBEC plant will hit destinations very similar to Clymers. And so we understand those markets, both for the co-products and the ethanol very well. The North Dakota plants, obviously, with proximity to Canada, that is a market that we're focused on. There's also opportunities where we can go in the U.S. to low-carbon destinations. And so it really will give us the flexibility to find both new markets and then be able to leverage those markets with our ethanol merchandising business. So I think you hit it exactly. IBEC will fit right into our current set of customers. Blue Flint and Dakota will allow us to develop an even broader customer base.

Operator

And our next question will come from Ben Mayhew with BMO Capital Markets.

Benjamin Mayhew

First of all, congratulations on a fantastic deal. It's really, really great. So my first question is about the deal and kind of segueing off what was asked before. I would like to dig into your anticipated EBITDA assumption. So on the low end, it looks like, call it, a little over $1 EBITDA per gallon is expected out of these 3 plants over the next 3 years. Is there any way to like dissect that even further and kind of parse out what is tax credit versus what's your assumption on ethanol margin? And how does -- like how do these margin levels compare to your existing plants? So let's start there.

William Krueger

So let's start with how these margins compare to our current plants. If you take Denison, Iowa, they're very similar in operational cost, pretty close to the same size, same dynamic, same technology other than Dakota Spirit, but very similar on operational costs. We've often talked about the efficiencies gained by larger plants. And that range is year-to-year. So our larger 140 million, 150 million gallon plants are going to have a little bit of scale of efficiencies. That's one reason why we're so excited about really focusing on expansion at all three of them. But the other question that you have is on trying to break out the 45Z versus what we've now started to look at is base ethanol and additional low CI opportunities.

The 2 North Dakota plants are able to add to that second bucket at a rate that our current plants can. The ability to have CI scores very close to 0 or below 0 really provide a lot more value. The one item that I would caution you on, and I can let Brian talk a little bit about the EBITDA numbers is the traditional model of looking at ethanol plants and saying, well, this is their EBITDA and we're going to strip the 45Z out, discount that for the sale, and then this is what the plant operations make.

That's really not the way you can look at plants that are sequestering carbon. There is a cost to compress the CO2. There's a cost to go downhole. There's a transportation cost for that. So I would caution anyone that says, well, they're making x on 45Z net EBITDA and everything else is operational because that formula simply will not work.

And as we get further into discussions down the road post closing, we'll be able to talk more freely about that. But that would be my overarching comment to anyone who's trying to analyze this deal is make sure you're putting the right EBITDA in the right bucket because it's going to cost you more operationally to generate a CI score in the single digits or even negative, if that makes sense.

Benjamin Mayhew

Yes, that certainly makes sense. Okay. I'm going to transition to legacy business here. I mean there's just so much to ask, but I'm going to go with legacy business. You mentioned on the Agribusiness side, that there could be a little bit of timing to consider in terms of when the profits hit. Can you just -- can you just elaborate on that a little further? And does this mean like what -- some fourth quarter will get kind of deferred in the first quarter? Or how does that -- how do you see that working?

William Krueger

I knew that comment would raise a question exactly like you asked. What I can tell you is a little bit like unlike last year when we talked at this call about the potential of pulling some profits forward because of the large elevation margins at harvest that we were able to.

We won't pull any Q1 profits into Q4. We're in the middle of November right now. So it's hard to answer your question. I don't want to avoid it. But if you think through, we have had a delayed harvest in the Eastern corn belt and quite honestly, Iowa, Nebraska. So that delayed harvest can often generate the opportunities to generate more space income if you wait into Q1 or Q2 of the following year. And I'm not saying that today, I just want everyone to understand. When you're finishing our harvest in the middle of November, it's different than finishing up the third week of October.

So that dynamic, you can look at the carryout, you can look at the price of the corn board today. And when you stack all that up, it is one thing that you need to be thinking through overall. But as I said, that should not be a net negative when you look at the size of the crop and the size of our harvest handle, which has exceeded our expectations.

Operator

[Operator Instructions]

Our next question will come from Pooran Sharma with Stephens.

Pooran Sharma

Congrats on the quarter and the deal as well, the announcement of the transaction. I think that's been pretty well covered. So maybe I'll just focus my questions on the core business and just maybe focusing on Renewables. We've seen D6 RIN pricing trend down significantly kind of since this biofuel policy uncertainty has been kind of pushed into 1Q of next year. I wanted to kind of get your thoughts on what you've been hearing, does this concern you? This on paper seems like it makes blending economics a lot worse from maybe where they were in the summer, but is it still kind of -- are refiners still incentivized to keep blend rates high? Just wanted to get your thoughts there.

Mark Simmons

Yes. This is Mark Simmons. Yes, certainly, the volatility in the RINs market has been quite volatile, I guess, over the last 60 days. But -- and that's primarily because of the reallocation still being in the air and in comment period. It has affected the blend margin, but the blend margin is still high enough to incentive domestic lending and increases in blend. So although it has impacted it, I think that the overall effect has been minimal.

Pooran Sharma

Okay. I appreciate that, Mark. And I know you guys didn't really cover it, but I think in the past, you've alluded to hedging in the weaker parts of the year for Renewables, and that's typically Q4 or Q1. So just wanted to kind of ask with ethanol margins where they were. Were you -- or did you lock in any of your Q4 production? Just wanted to get your sense for hedging here as we look forward?

William Krueger

As we always answer this question, we believe it's in the best interest to disclose what we've hedged post earnings reports. And as an organization, we tend to focus on when it makes sense to put on forward hedges and when we think the cash market will pay us to stay in the spot. So we'll be able to address any Q4 hedges that we had on when we do the Q4 earnings release.

Pooran Sharma

Okay. Maybe just one quick one. You kind of alluded to it on your prepared remarks, but maybe I just want to get a sense of pace of farmer selling had some pretty big crop price rallies here in Q3. I wanted to get a sense of where the farmer stands in the pace of selling an old crop and new crop as we sit here today?

William Krueger

Yes. So old crops pretty much behind us, right, with the percentage of corn harvested for the '26 crop. The producer did have -- and it's a really good question. The producer had a great opportunity, I'm going to say, 60 days ago, when we got to $5.40 for these corn. That was a really good opportunity to not only sell the balance of their old crop and their '26 crop. We did see some producers take advantage of that.

And as I mentioned in the prepared remarks, we saw quite a bit of volatility. Our merchandising businesses tend to perform better when that happens. With the recent selloff, farmer selling is really slowed and rightfully so. They were able to get the cash flow needs that they needed. They watched these futures drop $0.70 to $0.90. And so the farmer selling for Q4 has slowed considerably. Now that will generally provide merchandising opportunities and space income and goes right back to the comment that I made that it may make more sense for The Andersons to look at Q4 versus Q1 on when to market the corn and beans that we dump at harvest.

Operator

And this concludes the question-and-answer session. I'd like to turn the conference back over to Mike Hoelter for any closing remarks.

Michael Hoelter

Thanks, Joe. We want to thank you all for joining us this morning. Our next earnings conference call is scheduled for Wednesday, February 17, 2027 at 08:30 a.m. Eastern Time when we will review our fourth quarter results. As always, thank you for your interest in The Andersons, and we look forward to speaking with you again soon.

Operator

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.