South Dakota

New processors to reshape North Dakota’s export-focused soy sector

By Karl Feder

SPIRITWOOD, North Dakota (Reuters) – North Dakota’s soybean industry is at the forefront of what could be a once-in-a-generation transformation in the coming years, with two new processing plants scheduled to open in 2023 and 2024 , to meet the growing domestic biofuel production.

U.S. soybean processing capacity could increase by as much as 30% over the next four years, with more than a dozen new facilities or expansions planned as part of a nationwide wave of investment in processing the top U.S. export crop, primarily to supply Vegetable oil for producers of renewable diesel.

The surge would upend traditional trade flows as exports of whole soybeans to markets like China give way to stronger domestic demand and greater foreign shipments of soy flour, a product China does not typically import.

Nowhere will this shift be more evident than in North Dakota, the fourth-largest US soybean state by acreage, which ships about 70% of its high-protein oilseed crop to China annually. Instead, the new facilities will be able to process half of the state’s soybean crop into oil for biofuel and flour for animal feed.

Although China has imported more U.S. soybeans this year after a less-than-expected 2022 South American harvest, the world’s largest soybean buyer has increasingly relied on Brazil to meet its soybean needs in recent years.

Meanwhile, US biofuel makers are looking to more vegetable oils, like soybean oil, to make renewable diesel as demand for lower-carbon fuels increases.

But growth in soy meal demand has lagged, suggesting a glut in feed ingredients if markets don’t expand.


Weather-beaten concrete grain elevators tower over the tiny town of Spiritwood, which sits on the mainline of the BNSF Railway that connects North Dakota’s farms to the export terminals of the United States’ Pacific Northwest.

Here, global grain trader Archer-Daniels-Midland and Marathon Oil are building a $350 million milling facility where a barley malt factory once stood. Green Bison Soy Processing LLC’s facility is scheduled to open in late 2023.

The crusher will source soybeans from farmers within 60 miles in each direction, said Mike Keller, vice president at ADM.

It could also prompt growers to plant more oilseeds instead of crops like wheat and barley, and change marketing plans for the state’s crop and grain flows, farmers and analysts said.

Monte Peterson, a farmer in Valley City, about 25 miles from Spiritwood, expects to stock more soybeans on the farm after the facility opens and schedule sales selectively, rather than shipping them all out at harvest time, when prices are typically lower are.

“As crush capacity builds here, growers will stockpile more soybeans to ship 12 months of the year,” Peterson said.

All soybean oil produced at Spiritwood is shipped to a Marathon facility in Dickinson 200 miles west to produce renewable diesel, a lower-carbon biofuel that can be used interchangeably with petroleum-based diesel.

The ultimate destination for soy flour is less certain. ADM said this summer that it is initially targeting livestock and poultry producers in the region and expects exports to increase in the coming years. Trade missions from the US Department of Agriculture and industry groups have targeted some buyers, but growing markets will take time.

Exporters will look to boost sales to Southeast Asia and Europe, potentially crowding out supplies from top supplier Argentina in markets like Australia and New Zealand, said John Baize, president of consulting firm John C. Baize & Associates.


US grain exports have been reaching global buyers through terminals on the Gulf Coast and Pacific Northwest for decades.

But most of the existing export facilities there were built to ship dry whole grains, unprocessed products like soy flour, which can clog grain-handling equipment.

Some Gulf Coast exporters use smaller mid-river rigs that unload barges directly onto ocean-going vessels.

A meal-focused terminal at the Port of Grays Harbor in Aberdeen, Washington, owned by agricultural cooperative AG Processing Inc (AGP), is working to double its export capacity to 6 million tons annually by 2025.

The US Maritime Administration last month approved a $25.5 million infrastructure grant to expand the export terminal. US soybean growers and industry groups pledged an additional $1.3 million to help offset design and development costs.

“AGP’s Grays Harbor expansion project is arguably the most immediate opportunity for soybean farmers to meet the need for increased soybean meal export capacity,” said Mike Steenhoek, executive director of the Soy Transportation Coalition.

(Reporting by Karl Plume in Chicago; Editing by Andrea Ricci)

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