January 9, 2012

Cargill to upgrade Iowa soy crushing facilities

Cargill will spend US$20 million this summer to modernise its soy crushing plant on the east side of Cedar Rapids, with additional work over the next few years ending in an investment totalling US$60 million, announced the company on January 5. 

Meanwhile, reflecting industry overcapacity in soymeal production, Cargill will optimise its soy crushing operations in Iowa by closing its Des Moines, Iowa, US, crush plant on February 4.

"Iowa is core to Cargill's soy crushing strategy," said Mark Stonacek, president of Cargill Grain & Oilseed Supply Chain North America in Minneapolis, Minnesota, US.  "We remain committed to serving Iowa farmers and our soy product customers, which we can do more competitively through our Iowa locations in Sioux City, Iowa Falls, and our two plants in Cedar Rapids. The decision to close the crush plant in Des Moines was a difficult one due to the long history and loyal employees at this facility."

Declining domestic meat consumption, substitution of competing proteins such as dried distillers grain in feed, and growth in international oilseed processing have created a difficult industry environment for soymeal, Stonacek said.

Cargill will continue some business activities at the Des Moines site. Cargill will still purchase soy at its Des Moines elevator. Cargill will also continue to operate its vegetable oil refinery and produce specialty feed products at the Des Moines facility. Additionally, Cargill has a regional office in West Des Moines.

A total of 22 jobs will be eliminated by the closure of the soy crushing operation in Des Moines. Cargill will still have approximately 70 employees in the Des Moines metro area. Cargill employs more than 4,100 in its nearly 30 Iowa locations.

"We appreciate the service provided by our colleagues at the Des Moines soy crushing plant," Stonacek said. "Iowa continues to be an important place for Cargill, as reflected by our planned investments for Cedar Rapids."

Soymeal customers supplied by Des Moines will be served by other Cargill plants, including the facilities in Iowa Falls, Sioux City and Cedar Rapids. All existing contracts will be honoured.