Agri co-ops in the USA are building soybean crushing plants at the fastest rate in 20 years as demand soars for the crop to make livestock feed.
The new plants will have the capacity to process at least 120 million bushels of the crop in 2019, an increase of 5% and the highest since 1997-8.
Reuters has reported that farmers in the US, the world’s top soy producer, are planning to sow another record area.
The rise of a new global middle class with money to spend on meat increased the demand for animal feed, with industry experts predicting production of soy will have to rise 20% over the next decade.
This increased demand has increased margins at crushing plants to more than a $1 per bushel, the strongest for 18 months, according to financial exchange company CME Group.
“Margins on soybean processing were very good, some of the best we’ve had in many years. And when the industry has good margins, you expand production,” Mark Sandeen, vice president of product marketing at farmer co-op Ag Processing Inc (AGP) told Reuters.
AGP, the largest farmer-owned soybean processor in the world, has already started work a new soy plant in Aberdeen, South Dakota, that will have annual capacity to process 40 million bushels.
It is owned by local and regional co-ops representing over 250,000 farmers from 16 states throughout the US. and Canada, and already operates nine soybean processing plants.
Another of the new plants is being built by North Dakota Soybean Processors (NDSP), which is working on a similar-sized facility on an 80-acre site near the town of Spiritwood.
NDSP says the plant will offer an integrated soybean crush facility and refinery to produce soybean meal, refined, bleached and deodorised oil and biodiesel. It has completed a feasibility study and a preliminary front-end engineering and design study for the estimated $287 million project.
The new plants are expected to increase demand for local soybeans, which could pushing up prices that farmers nearby will receive for their crops, and reducing transport costs.
