Growing Soybean Crush Capacity Signals Need for Greater Meal Export Diversity

The USDA estimates that with the expansion of soybean crush capacity, including the High Plains Processing plant in Mitchell, South Dakota, the U.S. can now process three billion bushels of soybeans annually. The agency’s estimate of actual soybean crush for the 2025/26 marketing year is 2.55 billion bushels, about 85 percent of total processing capacity.

“However, 2.55 billion bushels is still a record, and it's 100 million bushels higher than last year because of this new capacity that we're seeing,” said Bree Baatz, a grains and oilseeds analyst with Terrain. “What will drive the pace of crush in the future is going to be some of this biofuel clarity that the industry's kind of been in a holding pattern waiting for.”

Crush capacity is expanding because of demand for soybean oil to make renewable fuels, according to Baatz, who spoke at South Dakota AgOutlook 2025 on December 4^th, in Sioux Falls. The challenge, she adds, is that only 20 percent of the soybean is oil, while 80 percent is meal, creating a surplus of the livestock feed.

“However, we might just be rearranging the soybean complex as we sit here today,” Baatz told the South Dakota Soybean Network, following her presentation at AgOutlook. “If we have less whole bean exports going to China for multiple reasons, which we can talk about, we will have a more diverse customer base on the soybean meal side that will come to the U.S. market as we continue to outperform South America's market share in the global soybean meal marketplace.”

The other facet of demand is that from exports, notably of late, exports to China. But Baatz questions how much that demand can be counted on. Her remaining question is just how big China’s business will be.

“We believe there's a handful of boats that have actually shipped. But the word of caution I have for producers is sales not shipped could be canceled if all of a sudden, this trade truce were to re-escalate,” she said. “We also have yet to have confirmation from China that any of this narrative is accurate. And so, I think that kind of concerns the market. And then [U.S. Treasury] Secretary [Scott] Bessent came out and said it's really the end of February that China is going to buy 12 million metric tons; and he assured the marketplace that [China is] on track.”

While not looking for significant market relief from soybean oil demand in the short term, Baatz is confident of greater growth in oil demand as more solid information becomes available about biofuels policy. That, she pointed out, will leave producers reliant on China coming to market to buy more soybeans.

“And if China doesn't, the USDA has come out and said that they're going to be offering support payments to producers,” said Baatz. “And so, I'm hopeful that that will help bridge to another season and that we get some biofuel clarity in the interim that picks up the crush pace here at home.”

The USDA on Monday, December 8^th, announced $12 billion in Farmer Bridge Assistance (FBA) Program relief payments to producers of several crops.

“FBA will help address market disruptions, elevated input costs, persistent inflation, and market losses from foreign competitors engaging in unfair trade practices that impede exports,” said a news release from the USDA announcing the payments.