January 26, 2004

ADM To Reduce Soybean Crush 10%

Archer Daniels Midland Co. (ADM), the top U.S. soybean crusher, announced on Friday its decision to reduce soybean crush by 10 percent company-wide.

A company spokesman had no comment on Friday, but soymeal industry sources said the crush cutbacks were intended to ration the small U.S. soybean crop.

Industry sources also said that other top U.S. crushers could follow suit.

"ADM has informed its meal customers that it is cutting back its crush by 10 percent," a meal broker said.

He said ADM began reducing its crush about a week ago.

The U.S. Agriculture Department last week forecast U.S. 2003/04 soybean ending stocks at a 27-year-low 125 million bushels. And 2003 U.S. soybean production was estimated at 2.42 billion bushels, down 12 percent from 2.75 billion in 2002 and below the USDA's December forecast for 2.45 billion.

The soybean crushing industry had been expected to begin reducing crushing operations early this year to make the thin soybean supplies last until the 2004 harvest beginning in September.

Agribusiness giant Cargill Inc., the largest privately held company in the United States, said last month it will temporarily shut its soy processing plant in Guntersville, Alabama, due to tight supplies and poor profits. But a Cargill spokesman said the company had no comment on market speculation about future crush slowdowns.

"We do not comment on market rumors or provide information on the level of our crush operations," said Cargill spokesman David Feider.