Planned Crushing Plants to Take Advantage of U.S. Soy’s Expanding Footprint

As the Corn Belt has expanded north and west, the availability of soybeans has increased in areas devoid of local soybean crushing. In many of the new areas, the farmer basis is very poor because the soybeans must be transported a longer distance than soybeans grown in the traditional Corn Belt footprint. Some of the new areas also have sizable animal populations that call into question the logic of shipping the soybeans to a crusher and then having the crusher send the soybean meal back to the same location.  Of course, the further the soybean meal destination is from the crusher, the higher the transportation cost.

To fill the void, four large new crushing plants are scheduled to be built. Financing is always a challenge, especially if an oil-refining unit is attached to the crushing plant.  New plants are planned for Ithaca, Michigan; Aberdeen, South Dakota; Spiritwood, North Dakota; and Crookston, Minnesota with annual capacities of 40 million bushels, 50 million bushels, 42 million bushels, and 21 million bushels, respectively.

The expansion of domestic crushing will improve local cash prices and lower the soybean meal cost for animal operations. Available supplies of soybean meal are most important to the poultry industry. Due to the size of the animal, the feed ration needs to be very nutritionally dense to obtain optimal results.

The proposed locations of the new crushing facilities have sizable poultry operations that would benefit greatly from new soybean meal production, which will increase the probability of expanding poultry production.  As seen below, Minnesota, Michigan, and South Dakota are major producers of turkeys and egg layers. With available soybean meal supply, North Dakota would be an obvious location for expansion. This is a very positive development for U.S. soybean farmers.

Alan Barrett
Alan Barrett

Director of Research and Consulting

Higby Barrett LLC

Alan Barrett is the Director of Research and Consulting for HIgby Barrett LLC. He is an accomplished commodity economist with more than 25 years of experience in futures and cash markets with a focus on cotton, commodity projects, non-traditional agricultural products, transportation and supply chain studies. Alan spent six years as a commodity futures broker. His expertise encompasses feasibility studies of oilseed crushing plants (soybean canola, and cottonseed), grain elevators, export elevators, shuttle elevators, grain container operations, flourmills and other processing facilities. Alan also has conducted transportation supply chain studies for grains, oilseeds, fertilizer, coal, natural gas, crude oil, and petroleum products. Alan has considerable experience in non-traditional agricultural products such as coal, coke, natural gas, chemicals, hydraulic fracturing fluid, hydraulic fracturing proppants, glycerin, fertilizer, micronutrients, salt, limestone, cement, iron ore, pig iron, and steel, especially feed ingredients. Mr. Barrett has a BS and MS in Agricultural Economics from the University of Tennessee.