China to Rely on South America Soybeans in Fourth Quarter – Analyst

Top soybean buyer China can do without supplies from the United States in the fourth quarter and can rely on imports from South America instead, said an analyst with a government-backed think-tank on Friday.

The comments by Zhang Liwei, a senior analyst at the China National Grains and Oils Information Center, come after China’s Commerce Ministry said earlier this month that Chinese companies had stopped buying U.S. farm products in the latest escalation of the trade war between the world’s two largest economies.

China is the world’s top buyer of soybeans, buying around 60 percent of globally traded supplies. The United States is typically China’s second-biggest supplier, accounting for the bulk of its imports in the fourth quarter of each year.

Chinese crushers stopped purchasing soybeans from the United States last year after Beijing slapped tariffs of 25 percent on the beans in response to U.S. tariffs.

But state-owned companies had purchased about 14 million tonnes of soybeans in recent months, after a temporary trade truce late last year. Further purchases were thrown into jeopardy, however, after U.S. President Donald Trump ratcheted up tensions between the two countries with threats early in August of another wave of tariffs.

Speaking at a conference in Harbin, Zhang said that even if China and the United States fail to reach an agreement on trade in coming weeks, “we will have enough soybean supplies as we can buy from South America.”

Zhang said sales from the state reserves could also help to bolster supplies.

Outbreaks of the deadly pig disease African swine fever are helping to reduce demand for soybeans, he also said. Soybeans are crushed into meal to feed pigs and poultry.

China said on Thursday its pig herd had declined by 32 percent in July versus a year earlier. Zhang said the decline will continue into the second half of the year.

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IOMSA Enters a New Era – Association Restructuring to Continue with Annual Conventions

Despite the celebratory atmosphere of IOMSA’s 125th annual convention, June 23-25, at the Four Seasons hotel in St. Louis, MO, there had been much uncertainty regarding the future of the association.

Associate Members Offer SupportHowever, an idea to restructure the organization – borne of the Oil Mill Miller’s Booster Club meeting the morning of June 24 – was discussed at length during a general meeting of the membership.

The idea, which garnered widespread support from Regular and Associate Members in attendance, would be to reorganize the leadership structure of the association to:

– Give full voting rights to Associate Members.
– Give Associate Members the right to hold an uncapped number of leadership positions, including on the Board of Directors and as officers.

The goal of these proposed changes is to keep the Board of Directors and leadership positions of IOMSA filled per the requirements of IOMSA’s Constitution and Bylaws, thereby allowing the association to continue into the future.

There also is hope that Associate Members who take leadership positions will be able to offer new perspectives and a creative approach to the way IOMSA operates moving forward, including a renewed effort to attract producers to the association and annual convention.

Special Committee Appointed
In the coming weeks, a special committee will be making the necessary revisions to the Constitution and Bylaws.

The committee consists of:
– John Rever, Ag Processing Inc, Omaha, NE.
– Denver Hance, Valley Coop Oil Mill, Harlingen, TX.
– John Mulholland, N. Hunt Moore & Associates, Franklin, TN.

Once the revisions have been completed, they will be subject to vote via email sent to all Regular Members and Emeritus Members. (Under the current Constitution and Bylaws, only Regular Members and Emeritus Members have voting rights.)

An affirmative vote of two-thirds of the members voting is required to pass the revisions.

To ensure that you are able to vote on the revised Constitution and Bylaws, verify that you have paid membership dues for 2019-2020 and your email address is current with IOMSA.

To pay membership dues online, click here.

To update your contact information, click here.

Next Stop, Des Moines
If the revised Constitution and Bylaws pass the membership vote, two Associate Members will be added to leadership positions – second vice president and first vice president – in the event that no Regular Members volunteer for these roles beforehand.

The first and second vice presidents will support IOMSA’s new president, Ken Boggs, ZFS Creston LLC, Creston, IA, in planning the 2020 IOMSA Convention to be held at the Embassy Suites in downtown Des Moines, IA.

Coshocton Grain Co. Soybean Processing Plant Nears Completion

Coshocton Grain Company, Coshocton, OH, reports it is on schedule with its new soybean plant construction and starting dates of operations.

Sugarcreek Concrete recently completed the concrete work for the drive-thru under the meal storage bins and other areas inside and outside the building, and the oil loading system with a spill containment tank is next to be installed near the meal bins.

Rhoda Crown,CEO of Coshocton Grain, said operations should start by the end of July and meal for sell should be available in early August. They expect to service not only Coshocton, but the seven surrounding  counties – Muskingum, Guernsey, Tuscarawas, Holmes, Knox and Licking.

Coshocton Grain looks to process an average of 3.36 million bushels of soybeans every year to produce 81,000 tons of soybean meal and 12,600 tons of soybean oil that would be for sale through the plant. That arm of the company will be known as Coshocton Soy Processing ExPress Meal & Oil. ExPress Meal will include a chemical-free, trademarked process from Insta-Pro International of Des Moines, Iowa.

The grain company currently has nine employees with two at its branch in Hebron. Crown said they would be adding 11 more full-time and two part-time workers at harvest time. Payroll and benefit for the additional employees is estimated at $580,000 a year. Ron Warnock, a 17-year employee of the company, will remain operations manager and also oversee soy processing.

Warnock said the project is about 90 percent complete on equipment installation, about 60 percent done with electrical work and the building is almost totally finished. He said nearly all of the equipment for the plant is American-made.

“Since we are a local company, we always want to try to use as many local (contractors) as we can. Some of the equipment and processes are not available here, but we try to use as much local as we can,” Crown said.

Coshocton County contractors include William Albert Inc. for site preparation, Philip A. Wagner doing HVAC and plumbing work and Double H Manufacturing of West Lafayette producing oil tanks.

“It was a project we really wanted to take on and we really appreciated them willing to go local,” said Double H co-owner Mike Hershberger. “Most of our business isn’t local, it gets shipped out. So, we do really like local business when we can get it.”

The 100×170-foot building is between the scales and railroad tracks. There are overhead load out bins for meal and also one-ton totes. Oil will be loaded on trucks and transported to a biofuels refinery in Erie, Pennsylvania. The meal is expected to be used for dairy, swine and poultry farmers within a 75-mile radius.

Soybeans will be taken from storage tanks for cleaning, drying and breaking down before entering the plant on an enclosed conveyor. From there they are heated in a barrel for about 20 seconds at a very high temperature. They are mechanically extruded and put through a press, which produces the oil. The oil is stored in internal tanks before sent out on trucks. The resulting meal goes through a crusher before storage in overhead bins. Trucks will pull under and load from the top.

Coshocton Grain will be able to accept soybeans in excess of 14 percent moisture because of the new processing, which is a much higher moisture level than they take now. Crown said they expect to consume about 33 percent of the available soybeans in Coshocton and the surrounding seven counties. Crown said their slogan for the plant is “grown locally, processed locally and fed locally.”

“We want to provide a good market for the local bean producers and livestock feeders in our area,” Crown said.

American Soybean Association Gives Testimony About Impact of Trade War on U.S. Soybean Producers and Agricultural Economy

American Soybean Association (ASA) Board Member and Missouri farmer Ronnie Russell appeared today before the House Financial Services Committee Subcommittee on National Security, International Development and Monetary Policy, testifying on the impact of trade and tariffs on soybean producers and the larger agricultural economy.

“Soybean farmers like me are feeling the impacts of the tariff war, and they are unsure if they will be able to make it through another growing season,” Russell said.

“Older farmers are considering retiring early to protect the equity they’ve built up in their farms, while younger producers are looking at finding other employment.

“We may also see the shuttering of more businesses in rural communities whose livelihoods depend on the health of the farm economy.”

The 25% retaliatory tariff imposed last July has all but halted shipments to China, which up until last year was the largest export destination for U.S. soybeans.

In 2017, China purchased $14 billion worth of U.S. soybeans. Now, the tariff has caused immediate and severe damage to the price of U.S. soybeans, which fell from $10.89 to $8.68 per bushel last summer.

“Our finances are suffering and stress from months of living with the consequences of tariffs is mounting. Soybean growers need China’s tariff removed now,” Russell continued.

“Long-term, what farmers and rural communities need is predictability and certainty, which only comes through maintaining and opening new markets where we can sell our products.

“While we are working hard to diversify and expand other market opportunities, the loss of the China market cannot be fully replaced.”

Russell concluded his remarks by calling on Congress to urge the Administration to conclude negotiations with China that include an immediate lifting of the soybean tariff.

He also asked both Congress and the Administration to finalize and enact the US-Mexico-Canada Agreement (USMCA), to bring a sense of progress and stability back to U.S. soybean growers and rural America.

For more information, please contact Jessica Wharton at 202-969-7040 or jwharton@soy.org

Minnesota Soybean Processors Continues Equity Drive For Planned Soybean Processing Plant in Spiritwood, ND

The final push of the equity drive for the planned North Dakota Soybean Processors plant at Spiritwood is concentrating on area investors, according to Bruce Hill, president of Minnesota Soybean Processors, the parent company of North Dakota Soybean Processors.

“We’re hoping for North Dakota investors and putting a couple on the board of directors of the plant,” Hill said. “… I think we have a little movement. No details, but it will take a little time.”

Connie Ova, CEO of the Jamestown/Stutsman Development Corp., said local investors would increase the economic impact of the plant to the local economy.

“Definitely would like to see those benefits coming back to North Dakota shareholders,” she said.

Minnesota Soybean Processors announced plans to construct a crushing plant in the Spiritwood Energy Park Association industrial park in February 2017.

Hill said the private placement memorandum, a document that projects the profits of the venture and the possible return to investors, has been updated to take into account the current levels of commodity prices and value of the products the plant would produce.

“Everybody should like what they see,” he said. “… The soybean market is working in our favor.”

Ova said the document includes a higher return on investment than previous projections.

While attempting to raise those investments, project leaders from Minnesota Soybean Processors are interviewing for some plant leadership positions and finalizing permits and agreements with local governments.

“All of the plans are working,” Hill said. “We finish the equity drive and get the contractors on the site and working.”

Brandy Johnson, administrative assistant who works with investor relations for North Dakota Soybean Processors in Jamestown, said much of the recent efforts by the company have been reviewing previous work.

“We’re working on making sure everything is where it needs to be,” she said. “Then, when we get the money, we can start digging.”

Upon completion of the equity drive and with a commitment from Minnesota Soybean Processors to move ahead with construction, the JSDC will transfer land south of the current Dakota Spirit AgEnergy plant to Spiritwood Energy Park Association as a site for the North Dakota Soybean Processors plant. The Energy Park Association would then contract for the construction of the rail sidings for the soybean plant.

Ova said the Energy Park would collect future lease and infrastructure payments to recover the cost of the land and rail sidings.

Hill said the plans still call for a 125,000 bushel per day processing plant with an engineer’s estimate of about $287 million for construction costs. The plant would process locally grown soybeans into a variety of products including biodiesel as a renewable energy source.

Minnesota Soybean Processors has actively sought investors since 2017. In April 2019, the company changed leadership with the termination of Scott Austin as CEO of Minnesota Soybean Processors.

In May, Hill said the company was still seeking $50 million in investments with a goal of completing the equity drive that month.

“I’m still as optimistic as I’ve ever been,” he said, referring to a new goal of completing the drive in time for construction to start in July.

French Oil Mill Machinery Company Hosts Manufacturing Open House

the French Oil Mill Machinery Company, a family-owned manufacturer of hydraulic press systems and processing equipment for the oilseed and polymer industries, hosted an open house for area educators, students, city officials, company employees and their families.

The event drew over eighty attendees who experienced a behind the scenes view of the company and their manufacturing processes.  Visitors observed machining operations on a four axis vertical
turning lathe and a five face bridge mill with SolidWorks part drawings and initial and finished parts on display.  In the Assembly Department, company representatives described assembly in
process on machines such as hydraulic press systems for composite and rubber molding and dewatering presses used in the production of synthetic rubber.  An electrical engineer demonstrated the electrical programming involved for the machines to operate. Some of the machines sold will ship to U.S. customers, while others are for customers in various foreign companies.

A new company video celebrating the company’s 119 year history and emphasizing the benefits of choosing a career in manufacturing was shown.  In addition, representatives from the Upper Valley Career Center, Edison State Community College and DRMA – the Dayton Region Manufacturer’s Association manned table top displays and shared information about the manufacturing industry and local educational programs offered.  The Company provided a raffle, a t-shirt giveaway and dinner to round out the evening event.

Tayte French Lutz, who is fourth generation of the family in the business and serves as French’s Director of Marketing commented, “At the top of our company core value list is Customer First. To us, the word customer extends beyond our traditional customers and incorporates our employees, their families and our community.”  She continued, “By opening our doors for this event, we strengthen those relationships for the mutual benefit of us in the Piqua area and for the manufacturing industry at a whole.”

French Oil Mill Machinery Company is an ISO-certified, 4th generation family-owned U. S. company that custom designs, manufactures and supports process equipment for the molding, oilseed and synthetic rubber industries. Since 1900 French has partnered with their stakeholders in over 80 countries worldwide to provide products with superior value and superior service that improve their customers’ productivity and reduce their overall production costs. French’s 225,000 square foot worldwide headquarters and manufacturing facility are located in Piqua, Ohio.

$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.