- Archer Daniels Midland (NYSE:ADM) said today it is gearing to expand its soybean crushing operations in North America, backed by strong demand from the renewable fuels industry.
- Seeking to become a major feedstock supplier to the rapidly growing U.S. renewable fuels industry, ADM broke ground on a 600M lbs/year soybean processing facility in North Dakota that CEO Juan Luciano said during today's earnings conference call would be operational in 2023.
- In the medium term, ADM forecasts North American soy meal demand will rise 2%-3% every year, which Luciano says would require the company to open a crushing plant every couple of years.
- "We expect the demand for U.S. green diesel to continue at a higher rate of growth, increasing by ~1B gallons per year and reaching up to 5B gallons by 2025 [and] vegetable oils will be a key feedstock to meet that growing demand," Luciano said on the call, adding that it takes ~7.5 lbs. of soybean oil to produce a gallon of renewable green diesel.
- Weak soy crush margins in China and logistical problems in Brazil and Argentina also are supporting ADM's North American crushing operations and allowing U.S. soy products to become more competitive in the global market, the CEO said.
- Reflecting increased exports to China and strong demand for vegetable oils, ADM's Q2 net earnings jumped more than 50% Y/Y to $712M.
Strong biofuel demand prompts ADM to expand soybean crushing operations
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