You could call it a soybean processing boom, akin to the corn ethanol boom over a decade ago. Recent announcements have been made for new soybean processing plants being developed in Norfolk, Neb., and David City, Neb., by two separate entities, along with other soybean plants being developed in Iowa, North Dakota, Kansas and other Plains states.

On Jan. 28, Ag Processing Inc. (AGP) announced plans to build a new state-of-the-art soybean processing plant near David City, with a capacity to process more than 50 million bushels per year and plans to employ 60 people.

On Feb. 3, N Bowdish Co. announced plans for Norfolk Crush LLC, a new soybean-crushing plant to be built in Madison County north of Industrial Highway on the northern edge of Norfolk. This $375 million plant will crush 38.5 million bushels annually, or about 110,000 bushels each day, and it will employ between 50 and 55 people with a payroll of about $4 million.

Soy processing boom

“Global trends are such that consumers want access to lower carbon products,” says Nick Bowdish, president and CEO at N Bowdish Co., developer of Norfolk Crush. “When it comes to transportation fuels, liquid or other modes, the marketplace is shifting from petroleum-derived products to renewable-derived products, like corn ethanol. That’s the direction the total soybean production and the supply chain is headed.”

In the past couple of years, Bowdish points out huge advancements in technology for converting all kinds of vegetable oils to mix with diesel. “All across North America, there is expansion of all types of oilseed processing and value-added facilities,” he adds.

Norfolk Crush, for instance, will crush soybeans to produce soybean meal, soybean oil and soy hulls. “Meal by volume is the largest output,” Bowdish says. “It has been growing in the mid-single-digit percentages, as diets include meats fed with protein and some direct protein, all boosting expansion. On top of that, the marketplace is filling a consumer demand for energy, and those are all factors behind the expansion in crush.”

Norfolk Crush is set to produce 847,000 tons of soybean meal annually and 77,000 tons of pelleted soybean hulls per year, all for livestock feed. In addition, the plant will produce 450 million pounds of crude soybean oil per year for a variety of applications, including renewable diesel.

The development of Norfolk Crush is coming at the same time as development on Platinum Crush, a similar-sized soybean-crush plant also being built by Bowdish in Alta, Iowa, with both projects slated to begin moving dirt this spring and coming on line by mid-2024.

Growing up in an agriculture community in south-central Wisconsin, Bowdish in his youth was a shadow to his father who managed a grain elevator. “Those sets of experiences built not only in my youth and through my agribusiness background in college, but also with starting my career in the corn ethanol space, and my roots in rural communities are key aspects that drive me in the businesses I run every day,” he says. “We want to lift people up in our rural and ag-based communities.”

Bowdish chose his siting for the plants first and foremost near where soybeans are grown. “After that, we looked at infrastructure and a combination of access for rail, roads and natural gas,” he says. “It was a combination of things that drove our interest.”

AGP plans

 “The soybean-processing industry is experiencing tremendous growth, and we believe a facility in east-central Nebraska is strategically located to serve our cooperative members and their farmer-owners,” Lowell Wilson, AGP chairman of the board, said in a news release upon the announcement of the plant in David City.

“Domestic and global demand for soybean meal and soybean oil continues to grow,” says Chris Schaffer, AGP CEO, in the same news release. “The David City location will also improve the company’s ability to market soybean meal to the Pacific Rim through AGP’s export terminal in Aberdeen, Wash. We have carefully evaluated this opportunity and are confident this investment will generate solid returns for our membership and benefit producers throughout the region.”

The growth in soybean yield and expansion of production has played a big role in the development of new processing. “Producers keep telling me they are planting a lot of soybeans this year,” Nebraska Extension economist Cory Walters says.

With production gains over the past few years, the expansion of soy processing in the state offers opportunities for farmers. Although the plants will not be completed for another few years, farmers can begin to understand how processing in local communities could boost price potential from the farm, Walters explains.

“Farmers who operate close to these plants are really looking good, because of price potential and less transportation costs,” he says. “Farmers from farther away will still gain good prices because the basis will be more in their favor.”

Market plan adjustments

This seismic shift in where processing takes place for soybeans may require a similar shift in market planning, Walters adds.

“You may reevaluate how you strategize marketing,” he says. “This competition for soybeans will require local elevators to up their game as well. There may be adjustments in how soybeans are stored, because traditionally soybeans are not stored as much. That may change, so you can’t maintain the status quo.”

He notes that corn buyers may also bid better at times to essentially ensure enough corn gets planted in the area to fill demand.

“The big picture is that you have these multimillion-dollar state-of-the-art plants showing up in rural communities,” Walters says. “This brings jobs, economic development and all kinds of other services.”

Bowdish says that the exciting part of the Norfolk Crush project is to be able to provide some of the essential needs in energy and offer increased economic value to farmers in Nebraska, and to have those dollars turn around in local communities.

“It allows all people involved in the supply chain to participate. and that has tremendous positive impact,” Bowdish says. “One of the things we saw in the expansion of corn ethanol economic opportunities was a significant increase in research in seed genetics, so we’d expect that portion of the ag supply chain to see the same kind of opportunities unfolding today in soybeans.

“That’s what it takes for capitalism to work, to have markets that have reasonable profits and give people the incentive to invest in crush plants, and seed companies to develop genetics to help us do more with less over time.”

The growth in soybean acreage and production are encouraging to developers such as Bowdish. Average yields have been consistently up year-over-year over the past several years, even in seasons such as 2021 when moisture was limited across much of the region.