ADM Shutters South Carolina Soybean Plant as Trade Wars Squeeze Processing Margins

ADM is permanently closing its soybean processing plant in Kershaw, South Carolina, marking the first U.S. crush facility shutdown amid a perfect storm of trade headwinds, biofuel policy paralysis, and corporate restructuring. The move comes as the global grain trader slashes 500M–500M–700M in costs following a 2023 accounting scandal that cratered its stock.

Why Kershaw?

• Capacity Crunch: The plant (50K bushels/day) is ADM’s smallest U.S. soy processor, dwarfed by mega-facilities in Iowa and Illinois.
• Trade War Fallout: With China buying 57% fewer U.S. soybeans year-to-date (per USDA), excess capacity weighs on margins.
• Biofuel Uncertainty: Renewable diesel demand growth has slowed amid RFS policy delays and potential Trump-era tariff escalations.

Bigger Picture

1. Industry Contraction: The closure follows a 5-year, 20% expansion in U.S. soy crushing capacity (2020–2025) driven by biofuel hype. Now, firms like Bunge and Cargill are reassessing investments.
2. ADM’s Scandal Hangover: Last year’s $4B market cap loss forced aggressive cuts, with Kershaw as the first domino.
3. Labor Impact: 11–50 jobs will be lost (per SC state data), with severance offered—but local farmers lose a key buyer.

What’s Next?

• More Consolidation: Analysts expect 2–3 additional plant closures if China trade relations worsen.
• Biofuel Policy Watch: The EPA’s pending Renewable Volume Obligations (RVOs) could revive—or further depress—vegetable oil demand.
• Geopolitical Risk: Trump’s proposed 10% tariff on all imports (including Chinese EV batteries) may indirectly pressure soy oil markets.

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Why This Matters:

• Farmers’ Pain: Fewer processors mean lower basis bids for soybeans in the Southeast.
• Energy-Food Nexus: The renewable diesel boom that fueled crush expansions now faces policy whiplash.
• Rural Economies: Kershaw (population 2,100) joins a growing list of small towns hit by agribusiness consolidation.

Data Point: U.S. soy crush margins have fallen 22% YTD to ~1.80/bushel—belowthe∗∗1.80/bushel—belowthe∗∗2.00+** needed to justify older, smaller plants.

Need adjustments? I can:

• Add competing plant capacity maps
• Detail ADM’s accounting scandal fallout
• Highlight state-level political reactions