Economic Tidbits

Nebraska’s Crushing It

Nebraska’s soybean crush capacity will increase 34 percent if three announced expansion projects come to fruition, says Scott Gerit, chief economist for the American Soybean Association. The three projects—Norfolk Crush near Norfolk; AGP at David City; and a potential facility in North Platte—would have a combined capacity to process nearly 125 million bushels. The expansions, along with existing facilities in Lincoln, Fremont, and Hastings, would mean crush capacity would equal almost 80 percent of the state’s soybean production. Gerit says Nebraska is among the top states for increases in crush capacity along with North Dakota and Louisiana.

Figure 1. Soybean Crush Capacity by State

Source: Gordon Denny and American Soybean Association

Twenty-three crushing facility expansions have been announced in the U.S. The expansions would enlarge crushing capacity 750 million bushels per year. The increases in processing capacity is being driven by the demand for renewable diesel. Renewable diesel is expected to help meet the rising demand for low carbon fuels, especially in California. Soybean oil is a feedstock in the production of renewable diesel, so to produce more oil, more crush facilities are needed.

The growth of soybean processing could have several impacts for Nebraska. More in-state consumption of soybeans could mean an increase in the overall demand for soybeans grown in the state if exports or other uses do not change. It could also lead to more soybeans grown in the state. In 2020, the top soybean-producing counties were located in a corridor one or two counties west of the Missouri River in the eastern third of the state. Gage (2.91 percent of total state production), Saunders (2.88 percent), and Platte (2.56 percent) were the largest producing counties (Figure 2). Any growth in soybean production would likely occur in this area, particularly given the Norfolk and David City facilities are in the region. Increased crushing capacity could also benefit livestock producers as more soybean meal would be produced, increasing feed supplies. Finally, the expansions will create jobs and spur economic activity in communities where they are located, always a plus for rural Nebraska.

Figure 2. Top Soybean Production Counties, 2020

Source: USDA National Agricultural Statistics Service

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