ADM to idle Iowa soy facility during record US harvest
By Julie Ingwersen and Karl Plume
CHICAGO, Oct 4 (Reuters) -Archer-Daniels-Midland Co ADM.N is idling its only soybean processing plant in Iowa for weeks in the thick of a record U.S. harvest, the grain merchant told Reuters, tightening supplies of soymeal fed to livestock.
The temporary closure eliminates a market for farmers to sell their soy as low crop prices slash incomes and removes a source of livestock feed for buyers in the U.S. and overseas. Expectations for the shutdown helped push cash soymeal prices at the Gulf export terminal to their highest level in a decade.
ADM's facility in Des Moines will close for maintenance work from mid-October through November, the company said in response to a query by Reutersthis week.
"We forecasted for this project and have plans in place to ensure we can meet customer needs throughout this time frame."
The facility in the No. 2 U.S. soybean state crushes about 5 million bushels of soybeans a month on average, brokers said. That figure would represent about 12% of Iowa's monthly soybean crush, according to U.S. government data.
"It's an odd one," Don Roose, president of Iowa-based U.S. Commodities, said of the shutdown during harvest. "Some guys are afraid: what if it doesn't come back up?"
ADM did not comment on the reason for the closure but agreed to upgrade the plant this year to resolve alleged air quality violations under a 2023 consent decree with the Iowa Department of Natural Resources. In August, firefighters were called to the site for a blaze that was extinguished in about an hour, local news reports said.
The U.S. soybean crushing sector has expanded in recent years as processors opened new plants to capitalize on rising demand for vegetable oils from renewable fuels producers. The facilities crush soybeans into soyoil and soymeal, a key source of protein in livestock feed.
Despite the added capacity, the monthly soybean crush fell to a near three-year low in August as numerous U.S. facilities were idled for seasonal maintenance and repairs ahead of the massive harvest.
The extent of the downtime surprised traders and contributed to a soymeal shortfall at a time when traders had already struck deals for domestic and U.S. export sales based on faulty expectations for stronger production, brokers said.
"The trade anticipated the new crush capacity coming online and did not hold back when the consumer came calling," said Kent Woods of CrushTraders, an analytical firm. "Then came the delays in the new crush capacity relative to expectations."
Chicago Board of Trade October soymeal futures SMV24 surged to three-month highs this week as exporters scrambled to cover sales commitments. Cash basis bids for prompt soymeal shipments into the U.S. Gulf export terminal soared to 10-year highs.
Hurricane Helene prompted ADM to close another crushing plant in Valdosta, Georgia, on Monday, according to the facility's website.
Reporting by Julie Ingwersen; Editing by Richard Chang
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