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Soy processors ready for better times

Photo courtesy of AGP

There may be good news for the soybean industry, from grower to processor to exporter, as a partial trade deal with China has been reached.

How have soybean processors been doing? What about biodiesel? If China trade normalization does not come through, what is their future?   

I spoke with Adam Piper, merchandising manager for AGP, in mid-November. His cooperative is a major player in soybean processing.

AUDIO: Adam Piper, AGP

AUDIO: Profit Matters 12-13-19

Ken Root: At the 2019 Farm Broadcaster Convention – At an AGP booth. Adam Piper is here with me. Adam, your merchandising manager over in St. Joseph, Missouri. Is that correct? 

Adam Piper: That is correct. It’s one of our largest facilities. We’ve been running a soy plant,  biodiesel facility, and soy oil refinery down there for the past 35 years now as a cooperative.

Ken Root: AGP, in their size, is nothing to sneeze at. Are you the biggest in soybean processing? 

Adam Piper: We are the largest cooperative-owned soybean processor in the U.S., (and) that’s something we take a lot of pride in. Our owners are ultimately the producers that are growing soybeans for our facilities.

Ken Root: Are the beans you get from them mostly being crushed or are they going out to the West Coast whole and being export? 

Adam Piper: Everything that we buy, in terms of raw soy, gets crushed. It gets made into soybean meal, soybean oil and then further refined on the oil side into food grade oils, as well as made into biodiesel.

Ken Root: What about your biodiesel facility? Is that in St. Joe? 

Adam Piper: Yes. We have three biodiesel facilities in our company – One in St. Joe, one in Algona, Iowa and one in Sergeant Bluff, Iowa. 

Ken Root: Economically, are they able to be a profitable enterprise converting soy into biodiesel?

Adam Piper: Right now, the market conditions are difficult. There’s a lot of headwinds with the tax credit being unknown at this point. It’s a difficult situation, but we are still running. We have optimism that something will get done and just look forward to the future.

We do firmly believe in biodiesel and want to help create that value for the producer. We were the starter of biodiesel in the state of Iowa, (and) want it to continue. 

Ken Root: What about trade? What about being able to move more product out of the country? Can you feel it – the trade problems we’re having now – slowing down the export of crush products out of Iowa? 

Adam Piper: It’s certainly a change. The timing of flows of products. For the producer, that’s probably their number one concern right now is what happens with China. Our hope is that something does get done and we get back to a free trade where markets will dictate where products go, not tariffs, that type of thing. It has made it more difficult for us to move to certain markets. That’s just forced us to develop new markets. So we look at it as an opportunity to deal with new clients and move our products elsewhere and hopefully in the long run that makes us all better. 

AGP also has an export facility in the State of Washington. They send unit trains with whole soybeans or crushed products by unit train from their member cooperatives in the Midwest and load ships bound for Asia.

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