As the Corn Belt expands 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, MI; Aberdeen, SD; Spiritwood, ND; and Crookston, MN, 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.
For the full report, visit U.S. Soy.
