August 24, 2011

 

ADM shuts down western Illinois soy plant

 

 

Archer Daniels Midland Co shut its soy processing complex in Galesburg, Illinois, late on Monday (Aug 22), abolishing 31 local jobs, a company spokesman said Tuesday.

 

"Several factors-including the growing soybean export market, the increasing cost of beans and a decrease in domestic demand for soybean meal-put severe pressure on the profitability of the Galesburg plant and drove the decision to close the facility," Roman Blahoski, ADM  spokesman, said in a statement.

 

Profit margins at soy processors have been squeezed by slow demand for the animal feed soymeal, both domestically and abroad. The Chicago Board of Trade board crush is trading at the lowest level in at least five years.

 

Meanwhile, export demand for soy has grown in recent years. The USDA has forecast about 45% of soy grown in the US will be sold to importers in the marketing year that begins on October 1.

 

The Mississippi River, the main export channel from the prime US growing region of the Midwest to the US Gulf Coast, is located roughly 30 miles west of Galesburg.

 

Grain terminals along the river bid aggressively to buy soy from farmers. Soy processors have to pay higher costs if they want to compete with the export market even as they discount soymeal in an effort to spur sales.

 

The Galesburg plant had been idle since April, Blahoski said. Some of the 31 workers at the processor will have an opportunity to transfer to other ADM facilities, while processing operations will be absorbed at plants in Quincy and Decatur, Illinois; Des Moines, Iowa; and Mankato, Minnesota.

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