US soy crush expansion prospects

There was massive interest in our story about the potential for the planned new soy processing facilities in the US to come on stream.

Gordon Denny, US soy industry consultant, believes US soy crush capacity​​ will continue to increase; it just won’t be as large as originally anticipated due to a variety of factors from US EPA proposals, the increasing volumes of other oils and fats being used as feedstocks for renewable diesel, the higher costs of steel, concrete and labor in terms of building plants, and multiple other factors.

“Expansion is ongoing. We are still seeing the most significant growth we've ever seen in the industry. But instead of a 30 to 32% increase over the next three years, I think it will be more in the region of a 25% gain in crush capacity. Some plant builds are likely to be put on hold, others might see their construction delayed.”

The perception, said Denny, is that, for some players, the expansion in the sector is “too much, too fast” and too dependent on the fickleness of politics. “I mean it all comes down to subsidies, mandates, tax credits and tariff protection.”

Photo credit: GettyImages/JTSorrell