US processors are now producing more soybean oil and meal per bushel, despite crushing the same volume of soybeans, reports an insider.
US soy industry consultant and former Bunge procurement manager, Gordon Denny, notes unusually low field moisture for the 2024 US soybean crop, which averaged 10.5% compared to the standard 13% base moisture grade.
Lower moisture beans offers clear benefits for buyers - longer storage life, reduced freight costs, and improved processor yields, he says.
“However, for farmers, low-moisture soybeans represent a significant economic loss. With moisture levels below the standard grade, US soybean producers missed out on an estimated $1.4bn in revenue—or $0.32 per bushel.
“Buyers, however, reaped the advantages, purchasing less water weight while benefiting from higher-value components like oil and protein.”
Dry soybeans though are not without their processing challenges, they can strain crushing facilities, leading to issues like poor dehulling, increased solvent use, excessive dust, and overloaded equipment, explains Denny.
According to one company operating North America’s largest extractor, some plants were forced to slow crushing by as much as 20% due to these operational issues, he reveals.
Surge in US crush capacity
Since March 2023, US crush capacity has expanded dramatically, adding approximately 800,000 bushels per day. New plants, including Shell Rock, Spiritwood, Platinum, Bartlett, Norfolk, Casselton, and Scoular, have entered the market, alongside expansions at existing facilities, outlines the consultant.
Despite this growth, start-up and operational challenges plagued many facilities, with issues such as equipment failures, fires, and poor execution leading to inefficiencies, he comments.
However, amid these hurdles, gross processing margins for certain soy processors, those in the Eastern US, have remained strong, averaging $1.59 per bushel, with combined fixed and variable costs of $0.50 per bushel, according to Denny.
“A net margin of $1.09 per bushel remains a strong margin, and plants will aim to operate at full capacity as long as there is demand for the meal. However, Northern plants are facing challenges due to significantly cheaper markets for both meal and oil,” he tells us.
He believes that the industry, though, will begin reducing crush volumes and will make low-cost export meal sales by spring.
Soybean meal supports margins
SBM continues to dominate margins, contributing 54% of the total gross processing margin compared to 43% from soybean oil (SBO), says Denny.
"This sustained reliance on SBM profitability comes as a surprise to many, given the billions of dollars invested in new capacity, driven by expectations for strong SBO demand fueled by renewable diesel (RD) and sustainable aviation fuel (SAF) policies."
Global competition
March 2025 could be particularly challenging for US soybean processors, as South American exports take center stage, with Brazil beginning its harvest and Argentina accelerating exports of old-crop meal.
Brazil, the world’s largest soybean exporter, ships more soybean meal than the US, while Argentina dominates in terms of export meal tonnage on an annual basis.
Plants struggling with unsold meal inventory may face shutdowns if margins no longer justify operational costs, cautions Denny.
Meanwhile, Canadian canola crush has grown 7% year-over-year, signaling broader competitiveness in the oilseed market.
Looking ahead
As policy clarity around tax credits and renewable fuel standards emerges, the balance between oil and meal profitability will remain a key determinant for the US soy industry’s trajectory in 2025 and beyond, he concludes.
