While 26 tons of soybean meal are loaded into Mick Schmiesing’s semitrailer at the CHS soy processing facility at Mankato in southern Minnesota, he’s focused on getting the meal home to feed 10,000 hungry pigs. Later, after feeders are full, he assesses the big picture.
“In the United States, we may eventually have too much soybean meal with all the soybean crushing we’re doing,” Schmiesing says, wondering how oversupply could affect farmers and agriculture. But that’s a worry for the future, he says, because today increased competition for soybeans due to rapid expansion of the crushing industry and resulting soybean meal production benefits him and other grain and livestock producers. “It’s an advantage.”
Every three weeks, Schmiesing or one of his family members makes the 20-mile trek from their Vernon Center, Minn., farm to Mankato for a load of soybean meal that’s fed to pigs in the family’s wean-to-finish operation. In mid-December 2024, meal prices were at 10-year lows at about $285 per ton — $145 per ton less than the year before.
The Schmiesings also sell 15,000 to 25,000 bushels of soybeans to CHS annually, delivering to the Mankato facility, sometimes making a soybean delivery and meal pickup on the same trip. He says soybean marketing opportunities have improved in recent years, along with basis levels to the tune of 15 cents per bushel or more.
As a CHS farmer-owner, Schmiesing says he benefits from the cooperative’s soy processing operations, market access for his beans and patronage opportunities for selling soybeans and buying soybean meal.
Soy crush
U.S. soybean processing is expanding to meet rising demand for soy oil from the biofuels industry, primarily to make renewable diesel, says Scott Gerlt, chief economist with the American Soybean Association. Soy oil has the most growth potential among biomass-based feedstocks, which include used cooking oil, tallow and other sources. A slight increase in demand for soy oil by food processors also plays a role in crush expansion.
Gerlt reports soy crush capacity was about 2.2 billion bushels in 2021 when the market signaled the need for more soy oil. Since then, he says plans for nearly two dozen crush plant expansions or new builds have been announced, including a potential new CHS plant in Evansville, Wis., which the company is evaluating.
If carried out, Gerlt estimates those plans could increase U.S. crush capacity by about 30%, or more than 600 million bushels.
But whether all projects will be completed or operate at capacity is up in the air due to uncertainty with future biofuel policies and rules, Gerlt says.
“Crush margins are not as good as they were a year ago, but for now at least, ‘keep crushing’ is the signal the market is sending.”
Message received.
U.S. soybean crush surged to an all-time monthly high in December 2024. More than 206 million bushels were processed that month by members of the National Oilseed Processors Association (NOPA). NOPA members account for 95% of U.S.-processed soybeans.
Several new crush facilities have come online in recent months and new monthly crush records have been set the previous four months as well as in 10 of the past 12 months.
“We are in new territory in terms of crush,” says Darrin Carlson, director of soybean meal trading for CHS. “Records will continue to fall.”
U.S. broilers consumed 18.2 million tons of soybean meal in 2022, more than any other livestock group, according to the Soybean Meal Info Center.
Mighty meal
Since soy oil is the driver behind processing more soybeans, Gerlt says the No. 1 question he is asked by farmers and industry officials is whether there’s enough demand to absorb the growing supply of U.S. soybean meal. A 60-pound bushel of soybeans produces about 11 pounds of oil and 44 pounds of soybean meal.
U.S. soybean meal production increased from 51.7 million tons in the 2020-2021 marketing year to a projected 56.7 million tons during the current marketing year, which ends Sept. 30, 2025, according to the U.S. Department of Agriculture (USDA). If crush capacity increases by 600 million bushels, Gerlt says that would add more than 13 million tons of soybean meal production.
“As supply increases, soybean meal will be more competitively priced and the market will find a way to clear it,” Gerlt says. “I think inclusion rates in livestock feed rations can be increased in the United States and abroad. I also think there are a lot of opportunities to increase exports.”
CoBank released a study in March 2024 about the rapid expansion of the soybean crush industry. It concluded domestic demand for soybean meal is expected to increase, but not at the same pace as supply, requiring exports to increase.
“Domestic meal consumption is growing 2% to 3% per year, but the crush industry is expanding more quickly,” Carlson says. “It takes time, but the incentive is there to feed more livestock and increase the amount of soybean meal in feed rations.”
Cooperative advantage
The cooperative system is uniquely positioned to benefit from crush expansion and opportunities to market more soybean meal, says Jason Marthaler, vice president of oilseed trading and risk management for CHS. Strategic investments by CHS in soy processing, animal nutrition and export capabilities will leverage the changing market.
“CHS owners will benefit from the growth in domestic and global demand for fats, oils and protein,” he says.
CHS was at the forefront of the crush surge. In 2021, the company completed a $100 million renovation of its soy processing plant in Fairmont, Minn., increasing crush capacity by 30%.
Related: Crushing it: CHS celebrates 20 years of soybean processing and community support at Fairmont, Minn.
To process the additional crude soy oil produced at Fairmont, CHS modernized its soy processing plant in nearby Mankato and increased refining capacity by 39%. South-central Minnesota farmers typically produce more than 50 million bushels of soybeans annually, according to Minnesota Department of Agriculture data. Having soy processing plants nearby is a boon for area soybean growers.
“For soybean farmers, adding more crush means stronger local markets,” Marthaler says. “For livestock producers, they’re seeing some of the cheapest meal now than in the last decade, which improves their margins.”
About 50% of the soybean meal CHS produces is fed to livestock — predominantly swine and poultry, plus some beef and dairy — within a 100-mile radius of its crush facilities. About 25% is shipped by rail to livestock producers in feed-deficit regions and the rest is used by the CHS animal nutrition business or exported.
A ship is loaded with soybean meal and other commodities at the CHS export terminal in Myrtle Grove, La.
Export expansion
In late 2024, CHS completed a $105 million expansion of its export facility in Myrtle Grove, La., in part to facilitate shipping soybean meal produced by CHS and other companies around the globe.
“We can’t store soybean meal for months like we can store soybeans, so each day we’re producing soybean meal, it needs to be shipped,” Carlson says.
Remember the claw and crane games you may have played as a kid and the excitement of trying to pluck a stuffed animal from the prize bin?
Perched high above the CHS export terminal at Myrtle Grove, Stephen Rogers says he has that feeling every time he operates the facility’s new E-Crane, part of the recent upgrades to increase export capacity by 30%. Other new additions at Myrtle Grove include increased storage and systems to speed barge unloading and ship loading with grain and soft commodities like soybean meal.
Sitting in the crane’s cab, with a joystick in each hand, Rogers skillfully removes barge lids with a claw attachment. Then he uses the crane’s clamshell bucket to scoop out soybean meal and drop it into a hopper and conveyer system that whisks it away to storage bins or a waiting ship for export. The crane also handles distillers dried grains with solubles (DDGS) and occasionally grain.
“It’s like playing a video game but in real life,” Rogers says. “This is one of the smoothest cranes I’ve ever operated. It makes the job of unloading barges much safer and faster.”
While a fun job, it’s no game. Rogers is part of an elaborate supply chain to export more soybean meal.
The Myrtle Grove terminal is now better equipped to load vessels with more than one commodity, often called grocery boats.
“The flexibility of being able to load multiple products in a single vessel is exactly what our buyers in Latin America and other regions need,” says Diego Gavilanez, a commodity marketing expert with CHS. “I would say eight of 10 vessels loaded at Myrtle Grove are now grocery boats.”
Gavilanez projects the lion’s share of increased soybean meal production will find a home overseas. More feed is needed for expanding poultry, swine and aquaculture production in many countries, including Colombia, Vietnam and Morocco, to satisfy the desire for more protein, he says.
The U.S. exported a record 16.1 million metric tons of soybean meal in the 2023-2024 marketing year, according to USDA estimates. Exports are projected to increase to 17.4 million metric tons during the current marketing year, which started Oct. 1, 2024.
“The U.S. will become more relevant as a soybean meal exporter due to competitive pricing and it has a slight advantage in meal quality over other origins because of protein content,” Gavilanez adds. “Every day, our team is working to strengthen market access and deliver more value back to our U.S. owners for their high-quality soybean meal.”
Mick Schmiesing sometimes unloads soybeans and picks up a load of soybean meal on the same trip to the CHS soy processing plant in Mankato, Minn.
Domestic demand
Domestic disappearance of soybean meal is steadily rising. During the 2022-2023 marketing year, 38.5 million tons was utilized, according to USDA. Use increased by an estimated 120,000 tons in 2023-2024 and is projected to exceed 40 million tons during the current marketing year.
“Soybean meal inclusion rates for livestock are picking up as meal prices come down,” Marthaler says.
Schmiesing confirms his operation is feeding more soybean meal. While meal inclusion rates can range from 10% to 35% of the diet, depending on animal size and the price of feed ingredients, he says he was mixing diets to include soybean meal near the lower end of the spectrum a year ago and is now using rates closer to the middle of that range.
Dairy and beef cattle are less efficient than pigs and poultry at using soybean meal’s high protein content, but are still important feed markets, says Rod Benson, a dairy and swine feed expert with CHS. He says soybean meal sales to dairy operations have increased significantly, indicating market forces are working to use growing meal supplies.
“It really comes down to supply and demand,” he says. “When meal is reasonably priced, it’s hard for other protein sources to compete. It’s a pretty significant shift.”
Ken Bryan, who leads animal nutrition product development for CHS, says the company’s team of nutrition experts works with livestock producers and animal nutritionists to determine the best and most cost-effective feed rations. With increased affordability of soybean meal, “I anticipate seeing increased use.”
With constant shifts in market and input prices for livestock producers, increased soybean meal supply gives them opportunities to shop around for the best quality and most economical feed, says Sam Bild, animal nutrition sales director at CHS. The company’s animal nutrition logistics and procurement teams are working together to move soybean meal where it’s needed most.
“Whether that’s through CHS directly or through our cooperative owners, we have the network to get soybean meal where it needs to go.”
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