DuPont Pioneer, Perdue AgriBusiness Announce Soybean Program Expansion

DuPont Pioneer and Perdue AgriBusiness recently announced that, in 2018, more farmers will be able to produce Pioneer brand Plenish high-oleic soybeans under contract and be eligible for a grain premium. Participating growers will be able to deliver grain to a participating elevator or directly to designated Perdue facilities for processing.

“Thanks to an expanding market for this improved soybean oil, Perdue is offering more contracted production acres for 2018,” said Gary Cordier, vice president of domestic soy sales for Perdue. “Plenish high-oleic soybeans offer the right combination of higher yield and profit potential for growers and more healthful, functionally superior oil for our food industry.”

Soybean growers who contract to grow Pioneer brand Plenish high-oleic soybeans in the 2018 growing season will receive a 50 cents/bu. incentive for producing and storing the beans or a 40 cents/bu. premium for a harvest delivery contract.

“Since we started working with Perdue in 2013, grower interest in Pioneer brand Plenish high-oleic soybeans has been exceptional,” DuPont Pioneer area lead Cynthia Ericson said. “The varieties we offer for contracting provide the defensive characteristics and high yield potential that area growers need to significantly improve income per acre.”

The development and commercialization of Plenish soybeans illustrates how biotechnology can provide direct benefits to the food industry, consumers and growers, the companies said.

Plenish high-oleic soybean oil provides companies and foodservice operators with a sustainable, U.S.-grown, soy-based trans-fat alternative with 0 g of trans fat per serving and 20% less saturated fat than commodity soybean oil. The improved fatty acid profile provides the highest oxidative stability level of any commercially produced soybean oil. Additionally, the enhanced stability means longer fry life in restaurant applications and less polymerized oil buildup on equipment, which reduces cleaning costs.

The oil’s stability extends the shelf life for packaged food products without sacrificing flavor and eliminates the need for artificial preservatives, creating the opportunity for a cleaner ingredient label.

The exceptional stability of Plenish oil also allows it to be utilized by the chemical industry as a renewable, environmentally friendly alternative to petroleum-based products, the announcement said.

Pioneer brand Plenish high-oleic soybean varieties are being developed with genetics using Pioneer’s Accelerated Yield Technology (AYT) 4.0. Local testing over multiple years has confirmed that yields are on par with similar elite commercial soybean varieties, the company said.

Traits included in Plenish high-oleic soybean products have received regulatory approvals in nearly all key U.S. soybean export markets, and approvals are pending in remaining export markets.

Advertisements

CHS Closes Sioux City Soy Plant, Lays Off 63 Workers

CHS Inc. on Monday closed its soy protein plant in South Sioux City, IA eliminating 63 jobs. The Minnesota-based farmers cooperative hinted the plant could reopen under new a owner early next year.

In a news release, CHS said the closure was part of its strategic plan to help restore financial flexibility by “reviewing all company assets to determine which are a strategic fit for CHS now and into the future.”

“CHS continues to negotiate the sale of the South Sioux City, Nebraska, facility to a Fortune 500 food company,” the news release said. “If the parties can reach a deal, we anticipate that CHS will finalize the potential facility sale in January 2018.”

 CHS employees displaced by the closing will be eligible for undisclosed severance pay and separation benefits.

CHS acquired the the South Sioux City plant for $133 million in 2012 from Israeli-based Solbar Industries.

“We are sad to see any thriving business leave South Sioux City or anywhere else in (the) Siouxland area,” said Rod Koch, mayor of South Sioux City. “We are going to miss the 63 jobs; however, we think the economy in the city is very vibrant right now and we’re hopeful those jobs will be replaced in short order with new industries that we are working on to come to South Sioux City and Siouxland.”

 Koch also wished CHS luck in its future endeavors.

The 195,000-square-foot plant in the Roth Industrial Park opened in 2008 under the Green Planet Farms name. A group of northeast Nebraska investors built the facility at a cost of $40 million. Specializing in organic soy processing, the company struggled to develop markets and failed to turn a profit in the face of a national economic downturn, forcing the owners to shut down production and put the plant and equipment up for sale in 2011.

Solbar, one of the world’s largest producers of specialty soy proteins, reopened it as a crush plant that turned soy flour into an isolate used in nutrition bars, sports drinks and vegetarian foods.

Researchers Discover New Use for Soybean Oil

Soybean growers may be excited to learn that University of Guelph researchers have recently found a new use for the oil from a specialty soybean variety.

The variety, OAC 13-55C-HL, is high in linoleic fatty acids, which work well in the production of industrial materials such as paints, coatings and epoxies, according to today’s Oilseed Innovation Partners (OIP) release.

The oil from this soybean “has a fatty acid profile that is approximately 33% higher in linoleic acid than commodity soybean oil,” the release stated.

Through this discovery, producers could see new market opportunities for their oilseeds.

“Recent studies point to a possible 16% market share for the oil and that will require an estimated 60,000 acres of identity preserved soybeans,” Rob Roe, director of bioproduct commercialization with OIP, said in the release.

“These soybeans would be grown under contract and the growers would receive a premium,” Roe told Farms.com.

The specialty oil was tested against the oils of other feedstocks, including commodity soybean oil, linoleic sunflower oil and linseed oil, the release stated.

The results from the first trial were promising, as the resin made from the new soybean oil showed performance characteristics superior to those made from the other oils, Roe said.

Researchers and industry partners (OPC Polymers and The Material Solution) have began the performance testing phase.

Dr. Gary Ablett, a soybean breeder at the University of Guelph, developed the variety two decades ago. Before passing away in 2012, he shared the research with Dr. Istvan Rajcan, another soybean researcher at the university, who continued the work with graduate students.

Soybean oil refining and bottling to be launched in Blagoveshchensk, Russia

A plant for refining and bottling of soybean oil will be built in the city of Blagoveshchensk, Amur region. The presentation of the plant, which is projected to release 50 MMT of the product a day, will be held on December 20, the press service of LLC ANK-Holding reports.

The facility is to produce soybean oil under a new brand named “Pearl of Amur”. Its annual production capacity is estimated at 15 KMT of soybean oil that is equivalent to 15 Ml one-liter bottles, reports UkrAgroConsult.

An oil extraction plant releasing soybean oil and meal (concentrated feed for animals) operates in the region since 2014. Its construction cost RUB 250 Ml. The facility currently produces 200 MT of products a day, processing up to 70 KMT of soybeans a year. Its output includes some 10 KMT of oil and 50 KMT of meal from non-GMO raw material. The extractor uses modern automated equipment. Also, it has an own laboratory and spacious production storage facilities with a system of well-thought-out technical processes and logistics.

ADM Reaches Agreement to Sell Bolivian Oilseeds Operations

Archer Daniels Midland Company (NYSE: ADM) announced today that it has reached an agreement to sell its oilseeds operations in Bolivia to Inversiones Piuranas S.A. The sale encompasses ADM’s processing facility in Santa Cruz de la Sierra, as well as nine grain silos and ADM’s Bolivian distribution business.

“We regularly review our portfolio, and the sale of our Bolivian Oilseeds operations is part of our long-term growth and transformation strategy,” said Greg Morris, president of ADM’s Oilseeds Processing business unit.

ADM’s oilseeds operations in Bolivia process soybeans and sunflower into oils and protein meal. ADM has approximately 400 employees in Bolivia.

The transaction, which is subject to regulatory approvals, is expected to close in the first half of 2018; until then, ADM will continue to operate its oilseeds business in Bolivia.

Forward-Looking Statements

Some of the above statements constitute forward-looking statements. ADM’s filings with the SEC provide detailed information on such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements.

U.S. Soy Processors Build New Capacity at Fastest Rate in 20 Years

U.S. agricultural cooperatives are building new soybean crushing plants at the fastest rate in two decades as farmers in the world’s top producer prepare to sow another record area with soy.

 The growth worldwide in the number of consumers with income to spend on pork and chicken has led to a rapid rise in demand for food to raise animals. Crushing plants produce high-protein soymeal feed for livestock and soyoil for food and fuel.U.S. processors are expected to open plants with capacity to process at least 120 million bushels of soybeans in 2019, up around 5 percent from existing capacity of an estimated 1.9 billion bushels.

The last time outright capacity grew that much was in 1997-98, according to U.S. Department of Agriculture and soy industry data.

Strong demand for feed has boosted crushing margins, the measure of profitability for the plants. Margins stand at more than a $1 per bushel, the strongest for 18 months, according to the CME Group.

The margins have encouraged processors to build more plants.

“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,” said Mark Sandeen, vice president of product marketing at farmer cooperative Ag Processing Inc (AGP).

Growth in feed demand means crushing capacity worldwide will need to expand further.

Global soy production would have to increase by 20 percent over the next decade to keep up with feed consumption, said Tom Hammer, president of industry group National Oilseed Processing Association.

U.S. soy plantings totaled a record 90.2 million acres this year and the USDA in a preliminary forecast set plantings next year at 91.0 million acres. And while industry capacity could reach 2 billion bushels in under two years, the USDA said crushings likely will not reach that level until 2020-21.

AGP broke ground earlier this year on a new soy plant in Aberdeen, South Dakota, that will have annual capacity to process 40 million bushels.

Another cooperative, North Dakota Soybean Processors, planned to build a similarly sized facility for an estimated $287 million near the town of Spiritwood.

The plants will increase demand for local soybeans, potentially pushing up prices that farmers nearby will receive for their crops, and reducing transport costs.

Ryan Wagner, who grows soybeans about 50 miles away from the new soy plant in South Dakota, said the processor could add 10 to 15 cents to the local soybean price – an amount that might mean the difference between making or losing money.

Chicago Board of Trade soybean futures on Friday were $9.89-3/4 per bushel, down 2-1/4 cents.

“That basis will be nice but in the long run I think the greater economic impact will be the attraction of more opportunities for raising livestock because of the new supply of soybean meal,” Wagner said.

“We are already starting to see interest in our area for more pork and poultry production since the announcement.”

Family-owned Zeeland Farm Services plans to build the second plant in the state of Michigan with capacity of 40 million bushels, to open in 2019. The company built Michigan’s first soybean processor in 1996 in Zeeland.

The company will supply soybean meal to hog, turkey, dairy and aquaculture farms in Michigan and export both soymeal and soyoil, said Cliff Meeuwsen, president of Zeeland.

Due to a lack of processing plants in Michigan, much of the soybeans there are shipped to Ohio where merchant giants Archer Daniels Midland Co, Bunge Ltd and Cargill Inc [CARG.UL] have plants.

Soymeal then gets shipped back to Michigan to feed animals, raising costs.

 “We hope to cut those costs out, thereby raising the price of soybeans to producers and cutting the cost of feed and protein to livestock producers,” Zeeland’s Meeuwsen said.

Earlier this year Perdue Farms opened a processor with capacity for 17.5 million bushels in Pennsylvania, that state’s first large-scale soy crushing plant.

Many of the new facilities are in places outside the central U.S. Midwest soy belt, taking advantage of increased supplies from farmers in those areas that have switched to soybeans from less profitable crops such as wheat.

Grain handlers will increase their profits by building the plants, as the margins are bigger for crushing than they are for simply buying and shipping soybeans, said Mike Steenhoek, executive director of the Soybean Transportation Coalition.

“The old adage is it’s better to export meat than (soy) meal and better to export meal than soybeans. You are always trying to export that higher-value product,” Steenhoek said.

American Soybean Association Board Elects John Heisdorffer as President

John Heisdorffer of Keota, Iowa, will serve as the 2018 president of the American Soybean Association, following a vote of the ASA board this morning in St. Louis.

Heisdorffer raises soybeans, corn and hogs with his wife, Deanna and son Chris.

“There is a so much facing the soybean industry today, and I am very aware of the responsibility that this position carries with it.

“For the first time in history, American farmers harvested more acres of soybeans than any other crop.

“We are a leading voice in the ongoing dialogue on food and farming, and as a leader, it’s our duty to stay engaged and stay passionate on the issues that affect soybean farmers every day.

“Whether that’s trade or biotechnology or regulation, there is plenty to be done. I am excited to get to work, and I look forward to leading this wonderful organization in the coming year.”

Heisdorffer replaces Illinois’ Ron Moore as president, and Moore will move to the role of ASA Chairman.

Former Chairman Richard Wilkins of Delaware rotates off the nine-member ASA Governing Committee.

The ASA Board also elected Davie Stephens to serve as Vice President, a position that places him in line to serve as the association’s president in 2019.

Stephens lives in Clinton, Ky., and farms in Kentucky and Tennessee with his wife Judy and his father, raising soybeans, corn and poultry.

In addition to Heisdorffer, Moore and Stephens, the ASA board voted to elect Kevin Scott of South Dakota as Secretary; Bill Gordon of Minnesota for a second term as Treasurer; and Bret Davis of Ohio, Eric Maupin of Tennessee, Joe Steinkamp of Indiana, and Charles Atkinson of Kansas as at-large Governing Committee members.

New members beginning their nine-year terms on the ASA board are Dennis Fujan of Nebraska; Josh Gackle of North Dakota; Jered Hooker of Illinois; Ryan Kirby of Louisiana; Alan Meadows of Tennessee; Scott Metzger of Ohio; Nick Moody of Virginia; Scott Persall of Canada; Caleb Ragland of Kentucky; Ronnie Russell of Missouri; and Brandon Wipf of South Dakota.

The new ASA Directors replace retiring directors Ed Erickson, Jr., of North Dakota; Bruce Hall of Virginia; Mark Huston of Canada; Jim Miller of Nebraska; Dave Poppens of South Dakota; Jeff Sollars of Ohio and Lawrence Sukalski of Minnesota.

CHS Closes Plants in Kansas, Iowa, and Minnesota

A soy processing plant in Hutchinson has closed, costing 77 people their jobs.

CHS Inc. announced Friday that the Hutchinson plant was one of three it was closing as it moves out of soybean protein production.

The others were in Creston, Iowa, and its Innovation and Technology Center at Eagan, Minnesota. Spokeswoman Annette Degnan says a total of 144 employees at the three locations will be affected.

The Hutchinson News reports eligible employees will be paid through Jan. 30 and will be eligible for severance pay and outplacement assistance.

The company reported net income of $127.9 million for the fiscal year ended Aug. 31, compared to net income of $424.2 million for fiscal 2016.

Rabobank: Grain and Oilseed Margins at Risk Due to High Freight Costs

Higher global freight rates are expected to have an increasing influence on grains & oilseed trade dynamics and trade flows in 2018 as the cost of dry-bulk sea freight increases. Rabobank anticipates the margins of grain & oilseed importers and exporters are at risk.

In its latest report “A Bigger World to Sail: Impact of Rising Freight Rates on Global Grains & Oilseed Trade,” Rabobank anticipates that increasing time charter rates as well as high bunker fuel costs will lead to higher freight costs in the coming years. As a result, Rabobank expects a shift in the movement of commodities worldwide with higher freight rates eroding the competitiveness of exports which come from farther afield.

Global dry bulk time charter rates and bunker fuel costs are expected to continue to stay strong in 2018 and 2019

The Baltic Dry Index – an indicator of global commodity freight costs – has increased almost 60% since January 2017 as additional supply of new bulk freight capacity has slowed. With demand growth for dry bulk capacity forecast to surpass supply growth of dry bulk capacity in the next two years, dry bulk time charter rates are forecasted to increase between 10% and 20% YOY in 2018 and 2019.

At the same time, crude oil prices have increased to their highest level in two years in 2017, appreciating to over USD 60/bbl (Brent Oil), making bunker fuel for vessels more expensive and adding to the rise in freight rates.

With more than 85 percent of global G&O trade (more specifically corn, wheat, soybeans, and soymeal) transported by dry bulk carriers, the higher freight costs will have increasing influence on G&O trade dynamics and trade flows in 2018-2019.

G&O exports from Australia to Asia to benefit, while more distant G&O exporters will face pressure.

With Asian countries being net importers of grains and oilseeds and relying heavily on dry bulk carriers to supply G&O products, G&O exporting countries closer to Asia, like Australia, stand to benefit while more distant G&O exporting regions like South America, US and Black Sea will see their competitiveness impacted as freight rates increase. To stay competitive, G&O exporters at a greater distance from their destination will need to reduce their G&O purchasing costs, supply chain costs and margins to trim their FOB price in order to remain competitive.

Asia to face higher G&O import costs

With Asian countries importing a total of 242.5 million metric tons in grains and oilseeds in 2016, Asian countries rely heavily on dry bulk carriers to supply their G&O products from South America, US, and Black Sea.

Increased freight rates will drive up the landed costs of G&O imports such as wheat and soybean to Asia, resulting in higher ‘cost of goods sold’.

Faced with higher freight rates, both G&O exporters and importers should position themselves to preserve their margins. There are a number of strategic options for them to do this, such as choosing an appropriate shipping strategy, improving supply chain efficiency and choosing an appropriate origination and procurement strategy.

Consumers should be ready to face increasing food prices.

Importers may also opt to pass the rising freight costs to customers, which will result in increased food prices.  According to FAO’s latest “Food Outlook – Biannual Report on Global Food Markets, November 2017” report, the cost of importing food is set to rise in 2017 to USD 1.213 trillion, a 6 percent increase from the previous year and the second highest tally on record.  Consumers should be ready to face increasing food prices.

You can find the report here.

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.