2018 IOMSA Convention | March 25-27 | Denver, CO

The 2018 IOMSA Convention will be held March 25-27 at the Embassy Suites Downtown Denver, CO.

The convention will be co-located with the Grain Elevator and Processing Society’s (GEAPS) Exchange 2018. While the two events are separate, they are located in adjacent buildings and are running simultaneously.

IOMSA is in no way merging with GEAPS.

Co-location provides IOMSA Convention attendees the opportunity to attend the GEAPS Exchange Expo on Sunday, March 25. A special rate will be offered to IOMSA Convention attendees who would like to visit the GEAPS Exchange Expo.

For more information about GEAPS Exchange, go to www.geaps.com/exchange-expo.

For more information on the 2018 IOMSA Convention, look for future issues of Oil Mill Gazetteer and check www.iomsa.org regularly.

Online registration will begin in October, so check back regularly! 

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ZFS Ithaca LLC Announces Plan for Soybean Processing Plant in Ithaca, MI

A new plant capable of processing more than 40 million bushels of soybeans annually, increasing the state’s total soy processing capacity to more than 50 million bushels per year, is planned for Ithaca.

Officials with ZFS Ithaca LLC, an affiliate of Zeeland Farm Services Inc., announced plans for the plant, which they’re calling a “major new investment,” in early October. The announcement came soon after Zeeland Farm Services celebrated the 20th anniversary of Michigan’s first soybean processing plant, according to a company news release.

“We are not building and sizing the facility for today, but for tomorrow. This is a long-term, 40- or 50-year investment in Michigan agriculture,” Cliff Meeuwsen, president of ZFS Ithaca, said in a statement.

“We are building a legacy plant that will fulfill all of Michigan’s soybean processing needs for generations.”

The new facility is to be located on a 435-acre site in Ithaca, which is located in Gratiot County and about 30 miles south of Mount Pleasant. It will be built and operated by ZFS Ithaca. Construction is to begin this year and the plant is expected to be operational in late 2018 or 2019, according to officials.

The project is contingent upon permits, incentives and other approvals.

Initially, the ZFS Ithaca plant will include grain receiving and storage, soybean processing and feed ingredients transloading. Officials say it “will be sized to meet the soy processing and soybean meal needs in Michigan for the next generation and beyond.”

The project is expected to create about 75 full-time jobs and help bring road and utility upgrades to aid in future development in Gratiot County, the release states.

Gary Brower, assistant marketing manager, said these jobs will include positions in management, operations and transportation. Some positions are open now and job seekers can apply online at www.zfsinc.com. He said “compensation will be competitive with the prevailing wages in the area and within the industry.”

Brower said the project is estimated to cost $130 million.

“This announcement is the latest example of the leadership and vision ZFS has always offered Michigan agriculture. Their commitment to growth and providing services and opportunities to Michigan farmers and businesses is well know, and their investment in Ithaca reflects that commitment,” Jim Byrum, president of the Michigan Agri-Business Association, said in a statement.

“Just like the first soy processing plant in Zeeland that has been in operation for two decades, the new facility in Ithaca will boost local soybean prices for Michigan farmers, serve as a convenient, reliable source of soybean meal and hulls for livestock producers and allow Michigan’s agriculture sector to tap into growing markets at home and abroad for soy products.”

In a statement, Gail Frahm, executive director of the Michigan Soybean Promotion Committee, said “This processing plant is a win for everyone involved.”

“Livestock, poultry and aquaculture farmers will greatly benefit from having additional Michigan-grown soybean meal available to their industries. Also, soybean farmers will enjoy additional opportunities to provide soybean oil for the human consumption and industrial use markets,” Frahm said in the statement.

For this project, ZFS Ithaca has partnered with Greater Gratiot Development Inc., the city of Ithaca, Gratiot County, Gratiot County Road Commission, Michigan Department of Transportation, Michigan Department of Agriculture and Rural Development and Michigan Economic Development Corp.

Pipeline Foods Expands Missouri Soybean Facility, to Add St. Louis Office

Pipeline Foods, a Minneapolis-based company focused on non-GMO and organic food and feed, is adding a regional office in St. Louis as part of its expansion in the Midwest.

Pipeline Foods, a supply chain solutions company, plans to open the St. Louis office by the end of the year. It will be led by Wade Ellis, director of food and ingredients.

“We will expand the portfolio of value-added services and drive a clearer path from farmers to food companies in support of growing consumer demand,” Ellis said in a statement.

Earlier this year, Pipeline Foods acquired Malden Specialty Soy, a specialty processing facility in southeastern Missouri. The company is investing in infrastructure and new equipment to double the capacity at the Malden facility.

The Malden facility will be an anchor for Pipeline Foods’ food and ingredient division, producing organic and non-GMO soybean meal as well as mechanical expeller-pressed oils.

Pipeline Foods announced in September that it planned to invest between $300 million and $500 million in the non-GMO, organic food and feed sector over the next three to five years.

The Golden Crop: The Story for Canola Keeps Getting Better

Canola is king across Alberta — and there’s no reason to think it won’t have a long and healthy reign.

“Canola offers a leading and consistent mix of superior agronomics and strong demand,” said Greg Kostal, president of Kostal Ag Consulting.

“Yeah, it has its ups and downs, and there’s little micro-reasons for it. But if you filter out all the noise, there’s a growing demand.”

The market for Canadian canola is on the rise, while demand for wheat for human consumption is “relatively flat,” growing only as incomes and populations grow.

“If our (canola) crop were one million or two million tonnes bigger, I wouldn’t have a problem finding a demand slot for it,” said Kostal.

“That doesn’t mean prices need to giddy-up and go, but we’re almost in a position at a 21-million-tonne crop size threshold where more canola is not more price negative. It just caps how high we go.”

A visit to any crush plant shows just how strong demand is.

In mid-October, Canadian canola crushers were processing near-record levels of the oilseed, topping out at 204,820 tonnes — only a little short of the 208,268-tonne weekly record set in March. And that happened even as margins were $40 a tonne lower than year-ago levels.

“I think that’s a strong testament to the companies involved feeling confident that not only is off-shore demand strong, but also there is a consistent push to provide the supply,” said Kostal.

While the crop’s profitability is obviously its biggest attraction for growers, strong and consistent demand is another big plus.

“Farmers depend on it for a big chunk of their income,” said John Guelly, who farms near Westlock.

“It’s a really handy crop — it’s very liquidable when you need some cash flow. It’s pretty easy to just pick up the phone, sell some, deliver it, and pick up a cheque.”

Industry investment in crush plants over the past five years has helped with that, Guelly added. “We’ve got a lot of domestic infrastructure in place. There are a lot of crush plants across Western Canada now.”

And, knock on wood, it may even get better.

China is starting to transition from soybean crushing to canola crushing, converting at least two — and possibly three — soy-crushing plants to process canola instead.

“You can’t talk about canola — or any markets, for that matter — without China,” said Kostal. “China has been a steady market, but that just opens the door for another incremental leap in canola.

“When you look at what China imports out of Canada, it has been consistently around four million tonnes for the last three years. That could catapult us to maybe five million tonnes.”

But China is just one potential growth market, Kostal added.

“As long as Canada has the export capacity to move it — which we have been — China is just one demand growth variable that sits very well with the Canola Council of Canada’s 2025 target of 26 million tonnes,” he said.

“Where China can come and swing a big bat, all these other little places take 50,000 tonnes or 100,000 tonnes here and there. It all adds up.”

Kostal also sees possibilities for more canola going into the U.S. biofuel sector, although for Guelly, the biodiesel market is “a tough one.”

“One never knows these days what the Americans are going to do,” he said. “I’m not sure that the growth of biodiesel in Canada is necessarily going to get much larger than it is now. It has its place, and I think it’s holding its own. But what the Americans do probably has a much larger effect on it than what Canada does.”

And there will be “speed bumps and hurdles” in the canola market, said Kostal.

“I’m not concerned, but you can’t just put the blinders on and think everything is going to be good forever. You do have some of these hiccups you have to contend with.”

Even in growing markets, supply and demand don’t move in unison, he said, and gyrations in both palm and soyoil markets affect canola.

But Guelly, too, sees canola’s Cinderella tale continuing to get better.

“Canola oil certainly has room for growth,” he said. “There’s a lot of other countries out there that are still not using as much canola oil as they could. So market-wise, I think there’s a lot more opportunity out there.”

Grower Eyes Grant to Build New York Soybean Processing Plant

Todd DuMond’s goal to establish a soybean processing plant on his Fleming, NY farm may soon bear fruit.

DuMond’s operation has applied for a $655,000 grant from Empire State Development, an offshoot of the state’s Division of Commerce. Because of the 20 jobs that would be created, the business would also receive $224,000 in tax credits.

DuMond wants his proposed $3.27 million plant to make soybean meal and oil because he believes it’s needed in New York. Presently, farmers must send their soybeans out of state for processing. Farmers must buy feed shipped into the state, which adds more expense. A nearby soybean processing plant would save on those expenses, he said.

 Processing soybeans in central New York would place the soybean meal where it’s needed.

“We have a big demand for feed with all the dairies, especially in Cayuga County,” DuMond said. “I have a good relationship with many dairies.

“The impetus for this year is I’ve added staff and have a greater ability to do it at this point. We have the location and facility to make it happen,” he said.

DuMond said that his project has been prioritized but he won’t know whether he’ll receive the grant until December.

“There are a lot of good projects,” he said.

The proposed processing plant would make animal feed. He also plans to generate biodiesel, another product largely imported from other states to New York.

“It would be great to develop the market in upstate,” he said. “If I can grow to the size and scale I imagine, we could process up to 50 percent of New York’s soybeans within three years.”

DuMond said the facility would be about 6,000 to 10,000 square feet, plus extra space for grain storage and dryers. He said he is leaning toward purchasing equipment from Indiana-based InstaPro because he wants consistency in heat while processing.

If all goes well, it should take about a year for the facility to open, he said.

DuMond’s parents, Eric and Marge DuMond, started the farm in 1980. After Todd DuMond finished his education and returned to the farm in 2003, he assumed ownership of DuMond Farms LLC.

The farm began roasting soybeans that same year, an operation that became known as DuMond Grain LLC. Eventually, Todd DuMond began purchasing other farms’ grain to process and resell.

DuMond Farms grows 1,300 acres of soybeans and has 7,000 acres of total farmland, making it one of the largest soybean producers in Cayuga County.

Land stewardship is big on the farm, as evidenced by the farm’s use of filtration strips, permanent waterways, high-resolution/sub-surface drainage, high-flow surface water catch basins, poly-culture cover crops, crop rotation, narrow row spacing, reduced tillage, and optimal nutrient application through timing, and placement.

 The farm’s goal is year-round ground cover and no-till farming, using primarily organic nutrient management. DuMond also operates equipment using biodiesel.

After seven years of grain roasting, the DuMonds founded DuMond Trucking LLC to make transporting grain easier.

Two years ago, the farm began grinding corn.

Todd DuMond also sells cover crop seed as a Center Seed dealer.

He has served on the American Soybean Association’s board of directors since 2011.

He also grows corn, wheat and alfalfa rye.

The New York State Agricultural Society lauded him as the Next Generation Farmer of the Year in 2015.

MPSG Supports Efforts to Bring a Soybean Processing Plant to Manitoba

Manitoba Pulse & Soybean Growers (MPSG) supports efforts to attract a soybean-crushing plant to Manitoba, but is neutral on where it’s built, says association executive director Francois Labelle.

“We want to see a facility built in Manitoba,” Labelle said in an interview Sept. 29. “That has been our position since we first started talking about this in 2014. We want to make sure Manitoba works together to make that happen. That’s what we need to have. There are different thoughts about how it should happen, but it’s really the builder that will decide (the location).”

The MPSG issued a news release last week with the same message, partly in response to rumours it has a preferred location.

Westman Opportunities Leadership Group (WOLG), which has the backing of the Keystone Agricultural Producers, MPSG and a number of municipalities, has been working for almost a year to build the case for a soybean-crushing plant in western Manitoba.

A Manitoba farmer tweeted Sept. 18 that he’d heard the MPSG board wanted a plant built in eastern Manitoba.

“OMG. Just build it! Help every MB farm’s basis!” the tweet read.

The rumour is wrong, Labelle said.

The MPSG represents all Manitoba’s pulse and soybean growers, chair Jason Voth said in a news release.

“The possibility of a crush plant is an encouraging topic and we’re working hard on the research and market development side to shed light on the correct path,” he said. “MPSG is sitting at the soybean crush table to make sure the plant gets built in Manitoba. We are not here to choose a specific location or take sides. We are involved because we have a deep understanding of the subject matter and are happy to share it.”

Even though soybean plantings and production have been growing dramatically in Manitoba more of both is needed to attract a plant, which would cost at least $400 million to build, Labelle said.

“I can’t expand on that enough,” he said. “Even though we are producing lots of soybeans we’re not in a position yet that somebody is going to jump out and build a plant.

“No company is going to buy all the beans, so you need a fair acreage.

“I think one of the things people miss is it’s not whether it’s going to be built in Brandon, or Portage or Winnipeg or Altona that really counts. It’s whether it will be built in Manitoba, whether it will be built in China, whether it will be built in Brazil. When you spend $400 million you’re going to look where you get your best return in the world.”

However, Manitoba does have some advantages, including the demand for soybean meal from its hog producers, Labelle added.

In June the MPSG held a seminar “to deliver industry knowledge and expertise” to groups interested in a Manitoba soybean facility,” the MPSG said in its release.

The WOLG, agriculture consultant Mark Rowe and Manitoba Agriculture officials attended. Rowe had information on plant operating costs, energy demands and the high volume of processing required to be profitable.

“To go from a 2,000-tonne (a day crush) plant to a 3,000 it’s in the $10- to $15-a-tonne margin improvement,” Labelle said.

A proposed North Dakota soybean plant will crush 3,400 tonnes a day (1.24 million tonnes a year operating at full capacity), which is considered small. A 5,000-tonne-a-day plant is being built in Brazil, he added.

Earlier this year Manitoba Agricultural Services Corporation (MASC) estimated Manitoba farmers insured a record 2.3 million tonnes of soybeans. Assuming five-year average yields of 38 bushels an acre (1.02 tonnes an acre) that’s 2.3 million tonnes of production — not quite double the volume needed by a 3,400-tonne-a-day plant. But Manitoba soybean yields are expected to be slightly below average this year.

In May 2015 a study prepared for the MPSG and Soy 20/20 concluded Manitoba soybean production could sustain a 2,000-tonne-a-day soybean-crushing plant, in part because of poor and expensive rail service to export soybeans and import soybean meal.

Since then, rail service has improved and the grain industry hopes western Canadian-grown soybeans will be included under the maximum revenue entitlement, resulting in lower rail shipping costs.

Manitoba soybean plantings of just 18,419 acres in 2000, have exploded, increasing 125-fold.

Insured plantings nearly tripled in 2001 and increased again in 2002 and 2003, fell in 2004 and 2005, increased in 2006, fell in 2007 and since then have gone up every year.

Plantings this year were up 39 per cent from 2016’s record.

Last year average insured soybean yields in Manitoba set a record at 42 bushels an acre.

For many years soybeans have been Manitoba’s third-biggest crop behind canola and wheat, respectively. But MASC projects for the first time crop-insured soybean acres had exceeded insured acres of red spring wheat — MASC’s biggest wheat category, which covers varieties in the Canada Western Red Spring wheat class.

North Dakota Soybean Processors Plant Continues Planning

Organizers of the equity drive for the North Dakota Soybean Processors crushing plant planned for the Spiritwood Energy Park Association industrial park are pausing their efforts until the end of the month, according to Scott Austin, general manager of Minnesota Soybean Processors, the parent company of North Dakota Soybean Processors.

“We’re taking a bit of a hiatus because of the harvest,” he told the Jamestown/Stutsman Development Corp. Monday. “We’ve been working on other planning issues.”

Those planning issues have included work on the air quality permit from the North Dakota Department of Health and other permits needed for construction and operation of the plant.

Along with arranging financing for the plant, the company is working on forming strategic partnerships with companies in the soy oil industry, Austin said.

The planned soybean processing plant at Spiritwood has an estimated cost of $287 million. Minnesota Soybean Processors are investing $66 million, another $60 million is being sought from individual and institutional investors for the project, and the remaining $161 million will be financed with loans.

When completed, the plant will crush 42.5 million bushels of soybeans each year producing soy oil that can be used for biodiesel and soy meal used for livestock feed.

Austin said the project will still take 24 months from the time work starts until the end of construction. Work on the project could start as soon as the equity drive reaches its goal of $60 million.

The equity drive will continue in November when officials from North Dakota Soybean Processors return to this area to meet with potential investors.

In other business, the JSDC Board of Directors approved changes to the reports that must be filed by businesses receiving economic incentives. Corry Shevlin, JSDC business development manager, said the changes make the reports to the JSDC more consistent with reports the businesses must file with the Bank of North Dakota.

Palm Recovery Weighs on Oilseed Price

The price of canola is determined by a host of factors.

The supply and demand of canola is a key determinant but so too the global supply and demand for other types of oilseeds, particularly soybeans and palm oil.

Currency fluctuations also work into the price. Canola prices are also affected by the markets for its processed products, meal and vegetable oil.

Given the fairly high level of oil in canola, developments in veg oil markets, such as palm oil production and biofuel policies, also play a role in pricing.

These two stories look at factors in the global veg oil market.

One of the world’s leading oil-seed analysts expects downward pressure on prices as world vegetable oil supply recovers in 2017-18.

In a Sept. 15 presentation at Globoil 2017 in Mumbai, India, Thomas Mielke, analyst with Oil World, said palm oil production is rising after a rough year in 2016.

Palm oil is a key driver of the world vegetable oil complex. Vegetable oil prices have a strong effect on canola because of its high oil content.

After falling sharply from last winter to this spring, palm prices have been climbing since July, but Mielke believes that is temporary.

Crude palm oil prices f.o.b. Indonesia were $727 per tonne as of Sept. 14, up $75 since early July.

Palm production through 2016 was hurt by a drought associated with the El Nino of 2015-16, and that led to low stocks.

“The global production deficit of palm oil as well as of all vegetable oils was unprecedented in calendar year 2016, which resulted in a steep decline in stocks in the 12 months ending December 2016,” Mielke wrote in the presentation.

World stocks of palm oil were down 3.6 million tonnes from a year earlier as of the beginning of 2017. With the end of the drought, palm production was expected to rise in 2017 and cause prices to fall. The market did drop into the spring. However production did not recover as quickly as expected and prices held on much better than expected and actually staged a rally in late summer.

Factors that helped support the rally include continued strong demand, poor coverage by buyers and indications that production in September and October will be lower than anticipated.

Mielke was surprised by the magnitude of the price increases in August and September, but the good times may be coming to an end.

“I expect some downward adjustment in the near to medium term,” said Mielke.

“I would not be surprised to see palm oil prices in Southeast Asia and Europe to drop by $30 to $50 U.S. (per tonne) from the level registered on Sept. 14.”

That is because palm oil pro-duction is expected to recover in 2017 to 66.1 million tonnes, up from 59 million tonnes during last year’s drought.

Oil World forecasts a record 69.7 million tonnes of production in 2018, leading to a surplus of the product.

“Stocks will recover more or less sharply, and this could result in some downward pressure in palm oil prices in 2018,” he said.

Soybeans are another major player in the vegetable oil complex.

Mielke said South American soybean stocks were 15 million tonnes higher than a year ago as of the beginning of September.

It is unusually dry in parts of Brazil and unusually wet in Argentina, which could result in a five to seven million tonne reduction in production when the crop comes off in South America in early 2018. However, the United States is harvesting a bumper crop that will increase its stocks by 12 to 15 million tonnes by the end of 2017-18.

Global soybean stocks are expected to be ample at 97 to 100 million tonnes, rivalling last year’s record carry-out.

World soybean crush will have to rise by 12 million tonnes in 2017-18 to compensate for insufficient supply of other vegetable oils and to replenish soy oil stocks.

The huge soybean stockpile is offsetting tightness in world supplies of rapeseed and canola, which will remain tight in 2017-18 with a global crop of 63 to 64 million tonnes.

Some wild card factors that could affect the vegetable oil complex are a labour shortage in Indonesia, the potential for worsening weather conditions in South America and imports from important markets such as India, China and Pakistan.

“China in particular has a big problem in its domestic vegetable oil balance, mainly in respect to the domestic tightness in rapeseed oil and palm oil,” Mielke said.

“Higher imports and crushings of soybean can only partly moderate the vegetable oil shor-tage in China. The country will have to sizably step up imports of palm oil and soy oil.”

Canadian Canola Crush Markets Remain Range-Bound

The chart at right shows the trend in a calculated canola crush margin index, which has remained range-bound since mid-July, ranging from $73.84/metric ton over the nearby future

 for the week of July 17 to a low of $51.46/mt over the nearby future for the week of Aug. 14. Today’s close was $59.47/mt, which is in the lower one-half of the range traded.

The calculation is largely based on the formula used by the Canadian Oilseeds Processors Association, which is described as follows:

Canola Board Crush Margin in CAD/metric tons = ((BO*22.04623* Noon Rate*.40) + (SM*1.103*Noon Rate*.6*.75)) – ICE Canola seed future

(Where: BO = soybean oil future, SM = soymeal future and Noon Rate = daily report from the Bank of Canada)

 Given that the Bank of Canada ended the daily reporting of the historical noon rate as of March 1 2017, it is assumed that COPA’s formula continues to rely on a daily exchange rate reported by the Bank of Canada. The CAD/USD rate is now just one of 26 currency pairs reported by the Central Bank that is based on an average trading level over the course of each business day. Instead, the index calculated on today’s chart is based on the closing spot Canadian dollar trade.

Since the recent high reached of $131.74/mt for the week of Jan. 9, the return has been challenged by weakness in soybean oil futures, soymeal futures along with a higher Canadian dollar trade. For example, the continuous soybean oil chart points to a drop of 6.7% from the close the week of Jan. 9 to today’s close, soybean has fallen by 7.7% while the Canadian dollar has increased by 5.2%, all three factors negatively affecting potential crush margins. One potential distortion to the formula is the contribution of oil that is pegged at 40%, while the Canadian Grain Commission’s Preliminary quality of western Canadian canola 2017 points to a mean oil content of 44.8% across all grades, although this represents early results and is far from final.

The current index calculated is just 52% of the level reported this time last year while also below the three-year average for this week at $90.86/mt. Despite this, the latest Canadian Oilseed Processors Association crush data as of Sept. 27 shows the weekly crush at 184,831 metric tons, up 8.9% from the previous week and 14.6% higher than the previous four-week moving average. Despite weaker crush margins, the cumulative crush is just 63,617 metric tons behind the record pace set in the 2016/17 crop year.

Producers continue to deliver seed at a record pace, with the most recent Week 8 data showing 2.9346 million metric tons delivered into the licensed handling system, including crushers, which is 7.6% or 206,500 metric tons ahead of the pace set last year as of Sept. 24 data.

ASA Welcomes Approval of Soybean Oil Heart Health Claim

The American Soybean Association (ASA) welcomed news on Aug. 1 that the U.S. Food and Drug Administration (FDA) has approved a qualified health claim linking consumption of soybean oil to reduced risk of coronary heart disease.

The petition, filed by Bunge North America, pointed to the potential heart health benefits of soybean oil, and manufacturers may now communicate that soybean oil may reduce coronary heart disease risk and lower LDL-cholesterol when replacing saturated fat and not increasing calories. ASA President Ron Moore, a farmer from Roseville, IL, applauded the news in a statement Monday.

“The cooking oil market is extremely important for U.S. soybean farmers, and the newly-approved health claim will enable manufacturers of soybean oil to communicate to consumers about the heart-healthy benefits of soybean oil. As we compete within the market against other cooking oils, having FDA recognize the ability of soybean oil to provide a superior omega-3 fatty acid profile while also lowering bad cholesterol levels is a benefit to consumers and to producers alike. Heart-healthy soybean oil creates a potential for growth in a time when net farm income is down. This development is a welcome one, and we congratulate the Bunge team for their work in seeing it to fruition.”