Register Now for the 125th Annual IOMSA Convention!

Registration is underway for the 125th Annual IOMSA Convention to be held June 23-25, 2019 at the Four Seasons hotel in St. Louis, MO.

Look for more information in the March/April issue of Oil Mill Gazetteer!

For online registration and sponsorship, click here!

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$10 Million Soybean Processing Plant Coming to Michigan

A Wisconsin-based soybean processor is getting $10 million from the Michigan Economic Development Corp. to help open a new soybean processing plant in Michigan’s thumb.

State Rep. Phil Green, R-Millington, announced that Quality Roasting LLC will be developing a new soybean processing plant in the village of Reese and the state is giving them $10 million in private activity bonds to build the new processing plant.

“I’m happy to see this partnership between the state and a business within our community,” Rep. Green said in a news release.

The company will use the money to acquire the land, construct the manufacturing facility and purchase the equipment needed.

He said it will will bring 6-8 permanent jobs in the area, in addition to construction and utility jobs as well.

It will be another soybean processor in the state of Michigan. Zeeland Farm Services is one of the main ones in Zeeland. That soybean processor also plans to build a second processor near Ithaca, Michigan as well.

“Any more usage of soybeans is a good thing,” Jay Ferguson, vice president for Michigan Soybean Association District 4. “A lot of the beans got to go to Toledo or Windsor or Zeeland.”

The Tuscola County project was previously awarded an $80,000 Michigan Business Development Program performance-based grant in support of this project.

China (COFCO) Continues Purchasing U.S. Soybeans

China’s state-owned procurer Cofco Corp. bought another 1 million metric tons of the grain last week, just days after placing its previous orders, Bloomberg reports.

Last Saturday it announced that it had bought 2 million tons from US suppliers following the last set of trade talks in Washington. Since the two countries agreed to a 90-day truce period ending March 1, China has pledged to increase its purchases of US agricultural products, on which it had previously placed 25% tariffs.

Sales are now picking up after almost entirely ceasing in the second half of 2018. Soybeans are a significant US export to China, which buys on average 30 million to 35 million tons a year.

The speed at which new orders are being placed, and their size – recent week’s included some of the largest daily soybean transactions on record – suggest that China is making good on its pledge, potentially as a sign of continued good will as the two countries search for a resolution.

U.S. Soy Processors Expand Domestic Crush Capacity

A recent study indicates that two new crush facilities are expected to open their operations in 2019, with a third crush plant expected to start up by the end of 2021. The initial facilities to open are to be in Michigan and South Dakota, with the third to be located in North Dakota. U.S. soybean processors have historically built crush plants near major livestock feeding areas, as it is more cost effective to ship the beans than it is the finished protein meal.

For the U.S., that means that most crush plants are in either the Midwest, to supply hog, cattle and dairy operations, or in the Mid-Atlantic and Southeast where the majority of U.S. poultry production is based. The map that follows highlights states with plants that are members of the National Oilseed Processors Association, or NOPA. NOPA is the major organization of North American oilseed processors and is estimated to capture about 95 percent of all oilseeds processed in the U.S.

Once up and running, these additional processing plants are expected to grow U.S. crush capacity by 6 to 10 percent and consume an estimated 120 million bushels per year. The new plants are expected to crush soybeans at a higher rate of 100,000 to 120,000 bushels per day, whereas older facilities could process just 70,000 to 120,000 bushels per day. With this improved technology, these plants are expected to result in adding 2.8 million short tons of soybean meal and 1.4 billion pounds of soybean oil to the market per year.

The facilities in the Dakotas are expected to move most of its soybean meal that isn’t consumed in the local feed market out via the Pacific Northwest while the crush facility in Michigan would be able to move product not consumed locally via the Great Lakes and out to the Atlantic.

The impacts of this expansion are expected to be mostly favorable for U.S. soybean farmers as the additional demand support basis levels and cushions farmers from export risk.

For processors, the additional capacity may hurt margin structure in the short-term as supply outpaces demand forecasts, but in the long run, the new facilities may close some processing and focus capacity at more profitable facilities. For global buyers, the additional crush capacity means larger supplies of U.S. Soy-based meal and oil to meet growing populations and developing consumer needs.

Source: USSoy.org

Cargill Plans $37 Million Investment in Cedar Rapids, IA

Agricultural giant Cargill is proposing a multimillion upgrade to its soybean processing plant in Cedar Rapids.

The Minneapolis-based company plans a $37.62 million expansion and facility modernization to what is called the Cedar Rapids east soybean facility at 410 C Ave. NE, in an industrial section north of downtown near Cedar Lake.

“The potential investment is more about upgrading our equipment to continue to provide employees a safe place to work, while also increasing our efficiency,” said Victoria Bagley, a Cargill spokeswoman.

Cargill is seeking a resolution of support for a Business Financial Assistance Application to the Iowa Economic Development Authority for tax credits under the state’s high-quality jobs program. Cargill also is asking the city for a local match if it receives the state grant of $429,800, estimated to be worth $367,700 in tax breaks over 10 years.

The City Council is scheduled to vote on the plan when it meets at noon Tuesday at City Hall, 101 First St. SE.

“It says a lot about Cargill’s commitment to the area,” said Ron Corbett, business retention and expansion strategist for the Cedar Rapids Metro Economic Alliance. “This is a great way to start the new year with a $37 million investment by one of our anchor companies.”

Such an investment also supports a secondary economy of plumbers, electricians and others to service the equipment for years to come, and with farmers throughout Eastern Iowa supplying the plant with soybeans, he said.

By comparison, Heart of America plans a renovation and hotel project in Cedar Rapids of more than $50 million, which city officials have said is the largest private investment ever in the city’s downtown.

The Cargill expansion comes after the acquisition of Cedar Rapids-based animal nutrition company Diamond V in 2017. Cargill also has proposed a $6.5 million rail yard on public land in the Rompot neighborhood. The council initially supported the project, but has slowed the process under pressure from resistant neighbors.

Cargill, which has about 400 employees in Cedar Rapids, also operates a corn milling plant in southeast Cedar Rapids and a west soybean processing facility.

Cargill’s plans for the east soybean facility include $6.12 million in building construction and site preparation and $31.5 million in machinery and equipment, design and engineering. The expansion would add 27,000 square feet and retain 48 jobs, according to city documents. The plan does not call for new jobs.

“This would primarily swap out equipment for their processing and add some building improvements,” said Caleb Mason, a Cedar Rapids economic development specialist. “This is to modernize the plant with current equipment.”

He said the expansion would be within the existing site footprint and occur this year.

The property’s value, which is $3.3 million, according to the Cedar Rapids Assessor’s Office, is projected to increase by $2.1 million from the improvements. The tax break would apply only to new value. Cargill would still pay a net of $1.8 million in taxes over the next 10 years, according to city documents.

More Soybeans Headed to China as Trade Talks Planned

China is back in the market for U.S. soybeans after taking a holiday break as Washington and Beijing plan more trade discussions.

On Wednesday, Cofco Corp., China’s biggest food company, was asking for prices, according to four traders familiar with the process, who asked not to be identified because talks are private. The inquiries were for February and March delivery, three of the traders said. While there’s market talk that some purchases have been concluded, both Cofco and state stockpiler Sinograin declined to comment.

The renewed interest comes as trade officials from the two countries are scheduled to sit down in Beijing next week for the first face-to-face negotiation since President Donald Trump and his counterpart Xi Jinping agreed to a 90-day truce to their trade war last month. The prospect of more buying sent futures in Chicago up 1.3 percent on Wednesday.

“It was a good start to 2019 for the beans,” Charlie Sernatinger, global head of grain futures for ED&F Man Capital Markets Inc. in Chicago, said in an emailed report. “Shorts covered off of talk that China was coming back in to buy U.S. cargoes and forecasts for Brazil went drier.”

China last made a big purchase of soybeans before Christmas, scooping up about 1.2 million metric tons for delivery by Aug. 31, according to the U.S. Department of Agriculture. That was on top of 1.56 million tons in the week ended Dec. 13. Cofco said it made two purchases, while Sinograin said it bought in batches “to implement the consensus achieved by state leaders.”

Bulk carrier Spitha is en route to China after loading soybean at the Export Grain Terminal in Longview, Washington, according to vessel tracking and USDA inspection data. EGT is a joint venture between Itochu Corp. and Bunge Ltd.

U.S.-China trade discussions are “coming along very well,” Trump said in a Cabinet meeting at the White House Wednesday.

With the U.S. government shutdown, there won’t be any USDA confirmation if purchases are made. Despite speculation, traders said Wednesday that there were still no Chinese bids for other feed grains such as corn or sorghum.

“We heard indications out of China that buyers could come for U.S. corn in January, but we have yet to see confirmation,” said Arlan Suderman, chief commodities economist in Kansas City, Missouri for INTL FCStone. “Supplies are ample, but the balance sheet would quickly tighten if China re-enters the market with significant purchases.”

China Trade War Rattles Investors in New U.S. Soy Processing Plants

The U.S.-China trade war is spooking potential investors in soybean crushing plants planned for Wisconsin and New York state, developers said, casting doubt on the future of a sector that had been a rare bright spot in the U.S. farm economy.

Crushers in the United States have been posting near-record profits by snapping up cheap and plentiful soybeans no longer purchased by China and making soymeal and soy oil for export to Europe and Southeast Asia.

But margins are not predictable as the United States and China attempt to resolve their trade differences before a March 2 deadline, adding another puzzle as investors parse out the costs and impacts of a trade dispute between the world’s two largest economies.

WSBCP LLC, or the Wisconsin Soybean Crushing Plant, is struggling to find backers for the state’s first soy processing facility because of uncertainty in agricultural and financial markets over the trade conflict, said Phil Martini, chief executive of industrial contractor C.R. Meyer & Sons Co, who is overseeing the project.

“I’m not a mental giant, but it doesn’t take one to think people are uncertain about what’s going on,” Martini said. “The crush margin is very good, but it can go the other way.”

China bought about 60 percent of U.S. raw soybean exports last year in deals worth $12 billion, but has mostly been buying beans from Brazil since imposing a 25 percent tariff on American soybeans in July in retaliation for U.S. tariffs on Chinese goods.

U.S. President Donald Trump and his Chinese counterpart Xi Jinping agreed on Dec. 1 not to impose additional tariffs for 90 days, a truce that spurred Chinese purchases of a few million tons of U.S. soybeans this month.

It is unclear when or if Beijing will remove its soy tariff, a move that would spur more deals and lift U.S. soybean prices in a boon to U.S. farmers and a blow to crushing margins.

Construction on the $150 million plant in Waupun, Wisconsin, is set to begin in 2019, with a projected opening in 2020, according to a June statement from the city, which owns the land where the facility would be located.

Martini said it remains to be seen whether the timetable needs to be postponed. He is also looking for livestock producers to commit to buying the plant’s products.

Kathy Schlieve, Waupun’s economic director, said the project would likely be delayed because the investor pool is not finalized.

“It’s different dynamic and we’re really trying to understand that,” Schlieve said about the trade war.

Shift from 2017

The uncertainty is a turnaround from last year when farmer-owned agricultural cooperatives were building new soybean crushing plants at the fastest rate in two decades after several years of large crops.

U.S. grain merchant Archer Daniels Midland Co set a new record for crush volumes in the third quarter and benefited from strong margins.

But after months of soybean futures prices hovering around 10-year lows due to the lack of Chinese buying, farmers have little room for new ventures.

“There isn’t a lot of extra money out there to invest in something like that,” said John Heisdorffer, an Iowa farmer and chairman of the American Soybean Association.

New York plant

The trade war also prolonged the search for investors for a $54 million soybean crushing plant that St. Lawrence Soyway Company is planning for Massena, New York, near the border with Canada, CEO Doug Fisher said.

Fisher tried to win over investors worried by the trade war with charts and graphs showing how the conflict improved margins for U.S. crushing plants.

“These tariffs with China rattle them, when in fact they have increased crush plant profits,” Fisher said.

As of Wednesday, the company had raised about 85 percent of the total, Fisher said.

St. Lawrence Soyway’s plant is projected to process soybeans into feed for dairy cows. The livestock industry has also been hit by Chinese tariffs on dairy products and pork, though.

“As those farmers are not doing as well, their ability to buy meal at higher prices is not there,” Fisher said.

Sunflower Leaders See Growth Potential Ahead

A recent move by the FDA to designate high oleic sunflower oil as a cholesterol-reducing product could fuel further growth in demand, according to industry leaders who attended a production meeting early this week in Lamar, Colorado.

“We’d like to get back to around 2 million acres of sunflowers annually, that’s what wed like to see,” said Karl Esping, the president of the National Sunflower Association whose term ends this weekend at the group’s annual meeting in North Dakota.

Esping farms a four-way rotation that includes corn, soybeans and winter wheat as well as sunflowers in central Kansas near the town of Lindsborg. He is the group’s first national president from the Sunflower State.

Kansas and Colorado both grow around 70,000 acres annually, a figure dwarfed by the production in the northern Great Plains, he said.

“It’s not unusual for farmers up there to plant 6,000 or 8,000 or even 10,000 acres of sunflowers at a time,” he said.

Esping believes the High Plains has room to expand production. At one time, Kansas was growing more sunflowers.

“Then soybeans started coming in, and everyone said how much easier they are to grow,” he noted. “Roundup made poor soybean growers good. But we’ve abused Roundup and now we are paying for it (with herbicide resistant weeds).”

He expects things to shift back the other way.

“There’s no question we could double production easily on the High Plains,” he said. “Right now the soybean thing is difficult, with seven-and-a-half dollar beans. At 18 cents a pound for sunflowers, that’s a pretty good price. If you’re growing 2,500-pound sunflowers, it’s a profitable deal.”

Kevin Swanson, marketing manager with Colorado Mills in Lamar, admitted there’s a perception among farmers that sunflowers are hard on the soil. To produce the rich, oil-laden seeds, the plants draw on a long taproot that pulls nutrients from deep in the ground, and those nutrients have to be replaced.

But Swanson contends area farmers often get higher yields from other crops following sunflowers because they loosen up the soil.

In central Kansas, where annual rainfall is around 25 inches, Esping plants his sunflowers as a double-crop after wheat.

“It works really well. The sunflowers can find nutrients that would otherwise be lost,” he said.

Swanson acknowledged that management has become an issue, too, as farms get bigger.

“Sunflowers take a little more management, but growers repeatedly tell us it’s their most profitable crop year after year,” he said.

Growers do need to scout and carefully manage several pests, including worms, weevils and moths, according to Ron Meyer, executive director of the Colorado Sunflower Administrative Committee and an area agronomist for Colorado State University.

But sunflowers have unique advantages, he pointed out.

Because they require less water, especially late in the season, some farmers with declining irrigation wells are planting half of their circles to corn and the other half to sunflowers. The sunflowers get full irrigation early in the season, during stand establishment, and the corn gets the water late in the season, when its needed for ear fill.

“We grow a lot of grassy crops, like corn, wheat and millet, so it’s good to rotate away from that to help control weeds,” Meyer added while speaking in Lamar. “Any grass is easy to take out of sunflowers.”

John Spring, an area weed specialist with Colorado State University, went through a list of 18 herbicides labeled for use in sunflowers. He said it’s important to start with a clean field, since sunflowers aren’t very competitive when they first emerge.

For optimal weed management, farmers should plan on three or four herbicide passes in a season, he added.

Meyer doesnt recommend attempting to double-crop sunflowers in eastern Colorado, due to soil moisture constraints, but noted equipment is available that allows farmers to plant right into standing wheat stubble, which helps alleviate crop residue concerns.

In a well-managed irrigated trial in the Prospect Valley area, Meyer came close to cracking 5,000 pounds per acre yield in 2015. Although successive crops have fallen short of that goal, he thinks it’s still possible to hit that mark in the future.

Growers in southeast Colorado have a great marketing outlet right at their doorstep. Esping credited Colorado Mills with being a national leader in marketing sunflower-derived products, partnering with the national association on several promotional campaigns and undertaking consumer outreach efforts of its own.

Since branching out from specialty feed manufacturing into oil refining back in 2010, Colorado Mills has taken a unique approach.

“We do not solvent extract,” said Rick Robbins, Colorado Mills’ general manager. “That makes for a very high quality feed. Our goat feed is now nationally known. We make over 4,000 ton a year, and it’s just an amazing product.”

The processing method sets the mill apart from ADM, Bunge and other large oilseed crushers that use chemical extraction.

“We are continually value adding to the end consumer, and we haven’t come to the end of what’s possible on that road yet,” Robbins said.

Chefs and restaurateurs like high oleic sunflower oil because it checks all of the trendy boxes: it’s nonGMO, zero trans-fats and heart healthy. It’s also a long-lived frying oil.

FDA’s recent announcement that edible oils with at least 70 percent oleic acid likely reduce the risk of coronary heart disease was also a boon for the industry.

“Sunflower and soybean oil used to be considered equivalent products, but now sunflower oil has separated itself out, and soybean oil is exiting the food industry,” Robbins said.

“What’s neat is that the high oleic oil makes a crispier chip, but when you put it on the skin it absorbs readily too,” he added. After supplying a cosmetics company for several years, Colorado Mills decided to enter that market by creating its own line of skin care products.

Sunflower oil is also being used as a natural fly and mite repellant and as an adjuvant for crop inputs.

“Crop oils are actually more expensive than cooking oils are,” Robbins said.

Colorado Mills is passing back the added value to producers through a loyalty program that can add up to an extra dollar per hundredweight premium to a grower’s contracted price. The contracts also contain an “act of God” clause that helps limit production risk.

Colorado Mills sources most of what it needs within 175 miles of Lamar, according to Swanson, but its reach extends beyond that. Esping, for example, often delivers his crop to Lamar on trucks that need a backhaul after delivering white wheat from Colorado to mills and food manufacturers in central Kansas.

Colorado Mills is ready to take more seed from more suppliers, Robbins said.

“We can crush up to 60 million pounds a year, and we can market every bit of that oil,” he said.

USDA Announces Deregulation of GE Low-Gossypol Cotton

The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) announces today the deregulation of Texas A&M’s cotton variety genetically engineered to have ultra-low levels of gossypol in its seed.

Gossypol is a naturally occurring compound in the pigment of cotton plants and protects them from pests and diseases.  This GE variety maintains protective levels of gossypol in the plants, but the compound is significantly reduced in the seed.  This benefits agriculture by lowering cottonseed oil refining costs, and potentially expands the use of cottonseed in the livestock and aquaculture feed industries, as well as for human food uses.

As part of the petition process, APHIS prepared a draft plant pest risk assessment (PPRA) and draft environmental assessment (EA), and made these documents available for a 30-day public review and comment period on August 1, 2018.

APHIS considered all of the public comments and conducted a thorough review of the potential environmental impacts in its final EA pursuant to the National Environmental Policy Act (NEPA), reaching a finding of no significant impact (FONSI).

APHIS concluded in its final PPRA that this variety of GE cotton is unlikely to pose a plant pest risk to agricultural crops or other plants in the United States and is deregulating this variety of GE cotton.

The Federal Register notice is available for public viewing today and the deregulation will be effective upon publication of the official Federal Register notice on October 17, 2018.

Soybean Plant Planned for Missouri Bootheel Expected to Create 60 New Jobs

A state lawmaker who represents southeast Missouri says a soybean processing plant planned for the Caruthersville area will be a “real shot in the arm” to the impoverished region. Nine out of the ten poorest counties in the state are in southeast Missouri. State Rep. Don Rone, R-Portageville, says Sedes Soy Crush will build the soybean crushing/processing facility near Caruthersville, at the Pemiscot County Port. He says the facility will create about 60 new jobs.

Rone says the plant will process non-GMO specialty soybeans that focus on high proteins.

“It’s a new seed, it’s going to be processed, it’s non-GMO,” Rone says. “The oil and the meal will be non-GMO.”

Sedes Soy Crush is part of Palindromes Incorporated. The company website says Palindromes is focused on sustainable and socially-responsible access to the world’s most basic needs, such as food and water.

“It’s going to export the meal into Arkansas into the chicken industry, and hopefully abroad to the oil business to Europe, non-GMO,” says Rone.

Caruthersville is located on the Mississippi River. Its website says more than 30% of the town’s residents are living below the poverty level. Four of Missouri’s highest counties with free and reduced school lunch participation rates are located in the Bootheel. Despite high poverty rates, there has been positive economic news in southeast Missouri, in addition to the soybean plant.

Rone says the newly-reopened smelter in Marston has hired more than 400 employees, and says it is considering whether to open a third line and a rod and wire mill.

That would mean an additional 150 to 200 jobs.

And New Madrid city administrator Richard McGill says the city is still in the running for a steel mill, adding that good progress has been made in discussions with the steel mill owner.