ADM to idle Iowa soy facility amid record harvest

Archer-Daniels-Midland Co (ADM) has announced a temporary shutdown of its only soybean processing plant in Iowa, coinciding with one of the largest U.S. soybean harvests on record. This decision is poised to significantly impact local farmers and the broader livestock feed market, the company revealed to Reuters.

The Des Moines facility, crucial for processing soybeans into soymeal, a primary component of livestock feed, will cease operations from mid-October to November for maintenance. This move comes at a critical juncture when farmers typically look to sell their harvest, potentially affecting their revenue due to prevailing low crop prices.

This closure is expected to tighten soymeal supplies, pushing prices at the Gulf export terminal to their highest in ten years. Approximately 5 million bushels of soybeans are processed monthly at this plant, representing about 12% of Iowa’s total monthly soybean crush, based on U.S. government statistics.

The timing of the shutdown raises concerns among industry insiders. Don Roose, president of U.S. Commodities in Iowa, expressed unease about the facility’s operational future post-maintenance, given its strategic importance to the state’s agricultural output.

Further, the plant’s closure aligns with ADM’s commitments under a 2023 consent decree with the Iowa Department of Natural Resources to address air quality violations. This agreement followed an incident in August when a fire at the facility required intervention from local firefighting teams, although it was swiftly controlled.

The U.S. soybean crushing sector has seen significant growth recently due to increased demand for vegetable oils by renewable fuel producers. Despite this expansion, the industry experienced a dip to a near three-year low in its monthly crush in August, as plants across the nation paused for seasonal maintenance.

The unexpected extent of these shutdowns has led to a shortfall in soymeal, impacting traders and buyers who had anticipated stronger production levels. According to Kent Woods of CrushTraders, the market had high expectations for new capacity, which were not met due to these delays.