By Matt Reese
After years of playing second fiddle to meal, soybean oil has seen a spike in demand for food and fuel uses and inspired domestic expansion in crush capacity. Nationwide, crush capacity is expected to grow by as much as 30% over the next 3 years as additional food and biofuel demand creates a need for more soybean oil.
“With the biofuel revolution, we are adding crush capacity,” said Darren Kadlec, a farmer from North Dakota on the U.S. Soybean Export Council board. “We used to want the meal because that was where the value was. Now, we want the meal and the soybean oil, and there is increased demand for both.”
Ohio soybean growers will benefit from this crush capacity increase, especially around projects based in Shelby County and Wyandot County. This fall, Cargill completed an expansion and modernization project at its integrated soybean crush and refined oils facility in Sidney. The $225 million upgrade for the facility, which came online in September, will help Cargill better serve farmer customers and meet the growing demand for soy products across food, feed and renewable fuel markets.
“We’re proud to make this investment at our Sidney facility. We’ve been in business for 45 years here, and we appreciate the long-standing relationships with local farmers, food and feed customers, and the local community,” said Justin Rismiller, U.S. Crush Soy Commercial Leader for Cargill. “This has been a complex project, as we continued to run the existing plant during construction. Thanks to our dedicated team, we are able to provide a state-of-the-art facility to better serve our customers and the community for generations to come.”
The project nearly doubles the previous crush capacity at the facility, providing greater market opportunities for area farmers and feed customers through creating demand for soybeans and offering greater access to soybean meal and hulls. Additionally, customers will have an improved on-site experience, as they will be able to more quickly and efficiently receive soybeans and load out products.
“We already had the infrastructure. By in large the supply chain is intact and it’s already established, so it made a lot of sense. The region grows a lot of soybeans and then last but not least, you’ve also got a tremendous livestock sector and we can market the soybean meal,” Ryan Martin, bean merchandiser with Cargill Sidney, told Dale Minyo last fall after the project was announced. “It’s also about the expanding oil use for renewable diesel and what we’re going to see with that. We know that this is coming. You’ve got a lot of plants being built in the west. Cargill is building one in Missouri, but we’re also expanding Sidney.”
Moving forward, Martin thinks the draw area from the Sidney facility could expand another 30 to 60 miles to meet increased demand.
“It is certainly doable and it’s going to take some work, don’t get me wrong, but it’s one of those things where we were looking forward to the challenge,” Martin said.
The refined oil from the facility can be used for different types of growing demand for soybean oil.
“It’s a great story for our farmers to be able to say, ‘Hey my soybeans went to that oil that is going to that restaurant or going to that store.’ Because we are fully integrated here, it’s just a story that not all of our sites get to tell and it’s a great one,” Andrea Flowers with Cargill Sidney told Minyo. “It’s not like the population is getting smaller. We need more oil. We need more protein. This just allows us to hit those emerging markets that are continuing to grow. It gives us a broader reach into that food business in this area and some of the industrial and biodiesel and renewable diesel we do as well. This allows us more capacity to get into some businesses and markets we’ve not seen in the past.”
As the Sidney plant expansion was getting up and running, Ohio soybean producers received news of another huge crush facility being planned in Upper Sandusky by Louis Dreyfus Company (LDC). The new facility will have an annual crush capacity of 1.5 million metric tons, or over 55 million bushels — around 20% of Ohio’s 282-million-bushel 2022 soybean production.
“This additional crush capacity represents a long-term investment in Ohio’s soybean industry. It will benefit soybean farmers and our partners in the animal agriculture sector,” said Jeff Magyar, Ohio Soybean Council chairman and Ashtabula County soybean farmer. “It’s clear that companies like LDC see enormous potential in our state, and future generations of farmers will prosper from that.”
Ohio Governor Mike DeWine, Lt. Governor Jon Husted, Ohio Department of Development Director Lydia Mihalik, and JobsOhio president and CEO J.P. Nauseef announced in October that the new LDC soybean processing plant in Upper Sandusky will bring more than 100 new jobs to Ohio.
“With the announcement of this new crush facility, LDC has reiterated how important agriculture is to our state’s economy, and how important our beans are on an international scale,” said Patrick Knouff, Ohio Soybean Association president and Shelby County soybean farmer. “We are grateful to Gov. DeWine, Lt. Gov. Husted, Director Mihalik and JobsOhio for the role they played in making this a reality.”
LDC is a leading merchant and processor of agricultural goods with plans to invest approximately $500 million to construct the new plant in Wyandot County.
“Soybeans are Ohio’s top exported agriculture product, so we are very excited to welcome LDC to Upper Sandusky,” said Governor DeWine. “This new facility will not only bring in new jobs, but it will also lead to new avenues for growth and innovation in Ohio’s agricultural sector.”
There are approximately 26,000 soybean farmers in Ohio, and the annual economic impact from soybean production in Ohio is $5.3 billion. LDC’s state-of-the-art soybean processing plant will have integrated crushing, edible oil refining, and lecithin production and packaging capabilities.
“LDC choosing Upper Sandusky for its expansion grows our robust agricultural industry and adds to the list of innovative companies choosing Ohio because of our talented workforce and dedication to business growth,” said Ohio Lt. Governor Husted. “The positive ripple effect of this project on local communities and across the state is something we look forward to seeing.”
Wyandot County has long been recognized as a center for manufacturing, agri-business, and farming, backed by an ideal location and highly skilled workforce. The partnership between JobsOhio, Regional Growth Partnership, Wyandot County Economic Development, and the City of Upper Sandusky created an ideal environment for LDC.
“This is a memorable moment for the people of Wyandot County,” said Mihalik, director of the Ohio Department of Development. “This significant investment by LDC, and the jobs that will be created out of it, not only will strengthen the economy throughout the region, but are proof that Ohio is an attractive landing spot for businesses looking to expand.”
The State of Ohio and JobsOhio will consider assistance for the project, which will be made public after any incentives are approved.