Dive Brief:
- Louis Dreyfus Company will build a soybean processing plant in Ohio, the crop merchant said last week, adding to a wave of new crushing facilities across the U.S. as biofuel demand soars.
- The plant in Upper Sandusky will have the annual capacity to produce 1.5 million metric tons of edible soybean oil and 7,500 metric tons of lecithin, a common emulsifier used in food manufacturing.
- The facility also provides the company the option to "participate in renewable energy feedstock markets and help meet growing demand for biofuels," the announcement said. Louis Drefyus will invest $500 million in the plant, according to a local economic development group.
Dive Insight:
Renewable diesel demand is underpinning strong demand for soybean oil, and processors are rushing to increase production in a bid to keep up.
At least 23 new facilities or plant expansions were announced as of the end of 2022, according to the American Soybean Association, which would increase crush capacity by 34%.
The increase comes as soybean oil makes up a larger share of renewable diesel production. Use of soybean oil in production of biofuels grew 22% in the first half of 2023 compared to last year, while use of corn declined 2%.
Louis Dreyfus has invested heavily in its own network of crush plants, recently expanding a biodiesel refining and oilseed facility in Indiana and announcing plans to more than double capacity at its canola processing plant in Yorkton, Canada.
Construction on the Ohio plant will begin in 2024 and the facility is set to employ over 100 people.
However, processors' plans for future production growth could stall. The U.S. Environmental Protection Agency pulled back on biofuel blending targets in June, which could impact demand and complicate new construction.
Louis Dreyfus' plant gives the company the option to participate in the biofuels market, while still responding to robust demand in the natural ingredients market. The company this year established a food and feed solutions business responding to "customer preferences toward healthy, nature-based products."
