South Dakota Soybean Processors, LLC processes and sells soybean products, such as soybean meal, oil, and hulls. The company’s principal operations are located where it has plants in Volga and Miller, South Dakota.
The company is the owner and operator of two soybean processing plants and a soybean oil refinery in the state of South Dakota. The company’s principal place of business is in Volga, South Dakota, where the company operates a soybean processing plant and refinery, and the company’s a...
South Dakota Soybean Processors, LLC processes and sells soybean products, such as soybean meal, oil, and hulls. The company’s principal operations are located where it has plants in Volga and Miller, South Dakota.
The company is the owner and operator of two soybean processing plants and a soybean oil refinery in the state of South Dakota. The company’s principal place of business is in Volga, South Dakota, where the company operates a soybean processing plant and refinery, and the company’s administrative offices are located. The company also owns and operates a small oilseed processing plant near Miller, South Dakota, which is approximately 100 miles from Volga. The company recently acquired and own a controlling interest in a subsidiary which indirectly owns and, following completion of construction, will operate a large oilseed processing plant and refinery just south of Mitchell, South Dakota. Construction of the Mitchell facility commenced in September 2023 and is expected to be completed and operational by the fourth quarter of 2025.
The company is owned by approximately 2,200 members, many of whom reside are agricultural producers in South Dakota and neighboring states who deliver and sell soybeans to the company’s plants for processing and production of the company’s products. All its assets and operations are domiciled in South Dakota, and all of the company’s products are produced in South Dakota.
The company’s core business consists of processing locally grown soybeans into soybean meal and oil. The company markets and sells soybean meal primarily to resellers, feed mills, and livestock producers as livestock feed. The company markets and sells multiple grades of soybean oil, in either crude or refined formats, to food, biodiesel and chemical industries. Under certain market conditions, the company may register and deliver warehouse receipts for crude oil under specific terms and conditions of a Chicago Board of Trade (CBOT) soybean oil futures contract. The company also markets and sell contracting services for the construction and management of oilseed processing plants.
In 2023, the company took major steps toward developing and operating a new oilseed processing facility near Mitchell, South Dakota. The company formed a subsidiary, High Plains Partners, LLC, a South Dakota limited liability company, to help finance and develop the Mitchell facility and made a large investment of approximately $100.4 million into it. High Plains Partners subsequently formed a subsidiary, HPP SD Holdings, LLC, a Delaware limited liability company, of which it owns and controls a majority interest, to hold a one-hundred percent ownership interest in High Plains Processing, LLC, a Delaware limited liability company, which is the owner-operating company of the Mitchell facility. The Mitchell facility will be a switch-processing facility, making it capable of processing soybeans and other oilseed varieties. The facility will have the capacity to process 35 million bushels of soybeans annually. Storage volume for the facility is expected to be 4 million bushels of soybean/oilseed, 8,000 metric tons of meal/hulls, 12.3 million gallons of crude oil and 3.52 million gallons of refined oil. Construction of the facility commenced in September 2023 and is scheduled to be completed by the fourth quarter of 2025.
Suppliers
The principal raw material used in the company’s production process is soybeans. The company primarily purchase soybeans for the company’s Volga and Miller plants from soybean producers and elevators located within approximately 50 miles of these plants.
Products and Services
The three principal products produced at the company’s Volga and Miller plants are soybean meal, soybean hulls, and soybean oil. The company also offers construction and operational management services for processing oilseed and related companies. The company typically enter multi-year agreements to manage the construction or operation of oilseed companies, receiving a fee for services performed based on the type of services being performed. This portion of the company’s business is small, generating only a nominal amount of revenues, historically. The company serves as owner’s representative during the construction phase of the Mitchell facility under an owner’s representative agreement, where the company is responsible for overseeing and managing the facility’s construction phase. Upon completion of construction of the Mitchell facility, the company will manage this facility under a management agreement, where the company will be responsible for managing the facility’s entire operations.
Sales, Marketing and Customers
The company’s soybean meal is primarily sold to resellers, feed mills, and livestock producers as livestock feed. The meal is primarily sold to customers in the local area (typically within 200 miles of the company’s Volga plant), Western U.S., and Canada. The company’s crude oil is sold to refining companies for further processing or refined at the company’s facilities and sold directly to the food industry for human consumption, or to the biofuel industry as transportation fuel.
Over half of the company’s products are shipped by rail. The company’s rail service is provided by the Rapid City, Pierre & Eastern (RCP&E) rail line, which is owned and operated by Genesee & Wyoming, Inc., which connects to the Burlington-Northern Santa Fe, Canadian Pacific (CP), and the Union Pacific rail lines.
Utilities
Volga Plant
The company uses natural gas and electricity to operate the crushing and refining plants in Volga, South Dakota. Natural gas is used for processing heat and drying soybeans. The company’s natural gas provider is NorthWestern Corporation, Sioux Falls, South Dakota. The company is at risk to adverse price fluctuations in the natural gas market but have the capability to use fuel oil and biofuel as a backup to natural gas in the event of delivery interruption or market conditions dictate. The company also employs forward contracting to offset some of this risk. The company’s electricity provider is the City of Volga, South Dakota.
Miller Plant
The company uses electricity and propane to operate the mechanical press plant in Miller, South Dakota, as natural gas distribution lines are not located in the area. The company’s electricity provider is NorthWestern Corporation, Sioux Falls, South Dakota, and CHS Farmers Alliance, Mitchell, South Dakota, is the company’s propane provider.
Government Regulation and Environmental Matters
The company’s business is subject to various laws and regulations that are designed to protect the environment, which are administered by the U.S. Environmental Protection Agency, the South Dakota Department of Agriculture and Natural Resources, and local government agencies.
Competition
The company competes with other soybean processors such as Archer-Daniels Midland (ADM), Cargill, Bunge, and Ag Processing (AGP), among others.
History
South Dakota Soybean Processors, LLC was founded in 1993.
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