ASA: 2025 update on soybean-crush expansion

Figure 1.

The soybean-processors industry has been expanding over the past two years. The practical domestic capacity of the industry has increased from about 2.23 billion bushels per year at the beginning of 2023 to about 2.55 billion bushels per year at the beginning of 2025, for an increase of 14 percent. Outstanding announcements for expansion would increase the total to over 2.78 billion bushels per year by 2030 if they are actualized. Since 2023, nine new or expanded plants have increased domestic crush capacity while another seven are still slated to expand or come online. This article provides an update to a previous article on this topic published by the American Soybean Association in November 2022.

Soybeans are almost never used whole but are instead “crushed” to produce soybean meal and soybean oil. Approximately 80 percent of the crushed bean results in soybean meal, which is used for protein content in livestock feed, and hulls. The other 20 percent is soybean oil, which is primarily used for human consumption and biofuels. The latter has primarily driven the growth in the crush sector, as rising renewable diesel production has elevated the domestic demand for soybean oil (for a background of renewable diesel, see this article). Domestic renewable capacity (including renewable jet fuel and biointermediates) went from 791 million gallons per year in 2021 to 4.58 billion gallons currently.

US crush growth

There are currently 68 solvent crushing plants in the U.S. (Figure 1). While soybean production has expanded in the Northern Plains over the past several decades, the ability to process those beans had not followed at the same time. Instead, growth in soybean acres in the Dakotas was almost exclusively for the export market through the Pacific Northwest. The expectations of increased demand for soybean oil has expanded the geographic boundaries of soy processing abilities in the U.S.

Figure 2.

Figure 2 shows the expansion by state compared to soy production in the state. North Dakota was only able to process 6 percent of its soy production in the state before 2023. That percentage has increased to 47 percent. Kansas capacity has increased from about 38 percent of production to 70 percent the past couple of years. The large increase in Louisiana is from one expanding plant along the Mississippi River. It is a swing plant that can process more oilseeds than just soybeans.

Timeline uncertainty

The timeline for completion of the new plants spans the next six years, with 75 million bushels per year of capacity slated to come online in 2025 and another 114 million in 2026 (Figure 3). The total announced increases in capacity still to come online total 234 million bushels per year. Note that these numbers are based off announcements.

Figure 3.

Plants that are planned to come online soon are already under construction, making them fairly certain. Plants that have longer timelines may or may not come online, depending on economic and policy conditions. Figure 3 does not include any plants that have been confirmed to be on hold or that have not released details. For these many reasons, the actual domestic capacity over the next five years can easily vary from what is shown here.

Figure 3 shows capacity as practical annual capacity. Plants will have a “nameplate” capacity that they could achieve if they operated without any issues or maintenance. Practical capacity accounts for likely down time to represent what the industry could likely be expected to crush.

Crush margins react

Soybean processors capture the difference between the value of the meal and oil and the cost of the soybeans (crush margin). A price increase to either of these coproducts increases crush margins, incentivizing the processors to crush more. Expanding crush capacity opens more places for farmers to sell their beans while providing additional soybean meal and oil for the domestic market. This in turn increases local soybean prices while bringing down the prices of soybean oil and meal.

A recent study sponsored by the United Soybean Board and ASA looked at how crush plants affect local soybean markets. The researchers looked at basis, or the difference between the futures price and local cash price, for areas around crush plants. They found that distant crush plants, those 80 to 100 miles away, raised basis by about nine cents. Basis continued to strengthen the closer the crush plant. For locations within 20 miles of a plant, basis increased by about 23 cents per bushel. The increasing number of plants allows farmers within their radius of influence to experience prices that are noticeably higher.

After running at high levels over the past several years, crush margins have fallen significantly (Figure 4). Note that the plant would have to cover all other operational costs and overhead out of the crush margin. Imported biofuel feedstocks have displaced soybean oil in biofuels. Low mandated blending obligations set by EPA and uncertainty around biofuel tax credits have also contributed to soybean-oil price drops. Plentiful meal supplies from the increased crush have also pushed down meal prices.

The case for higher blending volumes

These factors—coupled with higher construction costs from higher steel and aluminum prices, increased interest rates and other increases—have caused more uncertainty about the feasibility of plants further in the future without better biofuel-blending levels starting in 2026. It also raises concerns about stranded assets if blending levels under the Renewable Fuel Standard are not increased.

While concern about the crushing industry has increased since late 2024, the expansion of capacity has greatly benefited farmers. More parts of the country now have the ability to utilize soy domestically. This increases the basis for farmers in those areas by up 23 cents per bushel. The growth in the industry is not yet done. Approximately 189 million bushels per year in new capacity is slated to come online in the next couple of years, and almost another 45 million bushels of capacity awaits beyond that window.

If all the crush capacity is built by 2030, it would represent a 22 percent increase in domestic crush capacity since the beginning of 2023. The health of the crush industry and buildout of plants with longer timelines will depend on biofuel-blending levels to be announced for 2026 and beyond. Favorable numbers would allow soybean farmers to receive increased value for their crop.