Work on the new facility was announced earlier this month at the Northern Soybean Expo and Trade Show.
The cooperative currently has a processing site in Brewster, Minnesota that crushes about 115,000 bushels of soybeans a day, and the new facility would manage about 125,000 bushels, said Scott Austin, general manager with the cooperative.
“There hasn’t been much building in the last [several years] and more acres are being put to soybeans, so you have a market that is looking for additional crush capacity,” he told FeedNavigator. “Those things are all combining and that’s the rationale behind this – it’s basic economic growth.”
The expansion to the new facility is being done at this point because the current facility has already been expanded and is reaching its limit, he said. The board of directors also was interested in seeing the co-op continue to grow.
“It turns out that North Dakota is the ninth largest [state] when it comes to growth of soybeans, and while there is some crushing and some processing, nothing is to this scale,” he said.
The cooperative currently is working to finish the feasibility and engineering stages of the project, said Austin.
The site selected offers 150 acres and is located in the center of regions growing soybeans in the state, he said. It took several months to settle on the location and spots in both Minnesota and North Dakota were evaluated.
“Soybeans are now the number one crop in North Dakota from an acreage [perspective],” he said. “They’ve increased their production to the point where it makes sense to having processing in state.”
Crop quality and yield also have improved in recent years, he said.
When completed the new facility is expected to offer 55-60 full-time jobs in the region, the co-op said. It also would generate about 900,000 tons of soybean meal for livestock feed, along with 490m pounds of soy oil, both for biodiesel and food-grade oil.
“The plant fits perfectly, it puts us on both mainline railroads in the western US and it’s a nice fit,” said Austin. “It’s a great location and the state of North Dakota has been wonderful in the process in developing the project and supporting it.”
In addition to the road and railway infrastructure in place, the location also offers steam for the facility, he said. “That’s a huge plus to have steam provided,” he said.
Markets for the processed soybeans, soybean meal and other products will include the Pacific Northwest, Mexico, Canada and areas available through export from either the western coast of the US or port of New Orleans, said Austin.
The second facility also is expected to allow the co-op to continue to be competitive as other soybean processors are also expanding at this time, he said. There has not been much growth of new soybean processing facilities in the US since the economic downturn in 2008.
“There are other plants that are increasing production capacity, and the market is telling you that there needs to be more crush capacity,” he said. “That’s borne out by what the USDA is saying in demand for livestock and soybean meal.”