New South Dakota Processing Plant Could Bring Farmers ‘More Stability’ Amid Tariffs, Ag Leader Says

By Makenzie Huber

MITCHELL — U.S. Senate Majority Leader John Thune was blunt in his opening remarks during a Dakotafest policy discussion on Wednesday last week about the state of agriculture.

While South Dakota farmers in parts of the state can expect bumper yields due to good weather this season, he said, “commodity prices are in the tank.”

“Input costs are at an all-time high, and the margin for farmers across South Dakota is upside down,” added Thune, a Republican.

Increasing demand for agricultural products through opening markets and trade is a component to improving profitability for farmers, Thune said. South Dakota exports about 60% of its soybeans.

But export markets to some countries like China and in southeast Asia have slowed in recent months as President Donald Trump’s trade and tariff policies play out. The American Soybean Association sent a letter to Trump this week saying that soybean farmers can’t survive a “prolonged trade dispute” with China — the country’s largest soybean customer.

South Dakota Soybean Processors CEO Tom Kersting boasted about another option for South Dakota soybean farmers in the wake of tariffs: the High Plains Processing plant expected to open in mid-October near Mitchell.

Kersting participated in a panel discussion on Wednesday about the new plant before South Dakota’s congressional delegation took the stage. The $500 million plant is expected to process up to 37 million bushels a year — roughly 16% of the state’s 2024 soybean production, according to USDA data.

The processing plant will include a refining operation and offer byproducts such as soybean meal and hulls as well as lecithin, which has uses ranging from food to lubricants.

The plant aims to fill growing demand in the U.S. for biofuels, Kersting said. The processing plant will offer “more stability in an uncertain future,” Kersting told South Dakota Searchlight after the presentation.

“This will kind of take the place of that export problem and uncertainty out of the marketplace that farmers are facing right now,” Kersting added. “We’re there every day. These export customers come and go.”

South Dakota Soybean Association President Kevin Deinert told South Dakota Searchlight after the panel discussion the operation will allow producers to become less dependent on whole soybean exports to China. Local processing will encourage more use locally, Deinert said, and open markets to other countries.

Kersting added that the processing plant is the first of its kind in South Dakota, with equipment to process seeds from other plants like camalina, canola and sunflowers. Canola and camelina seeds have up to 40-45% oil content, versus the 18-22% present in soybeans.

“Whatever the market demands or takes, we’ll make the most of our money,” Kersting told attendees. “This flexibility was driven off of the increasing demand, not just in the U.S. but globally, for vegetable oils.”

That demand is for biofuels that have “transformed oil markets.” A decade ago, most soybean oil went into food, but about 46% of soybean oil in 2022 and 2023 went toward biofuel production.

Republican U.S. Sen. Mike Rounds said during the policy panel that “the jury is out” on whether tariffs will help or hurt agriculture. If trading partners who normally buy farm and ranch products impose retaliatory tariffs, then that’s a concern.

On the other hand, the tariffs or trade deals arising from tariff threats could force countries to increase their imports of U.S. goods. Some countries in the Pacific Rim are interested in purchasing U.S. ethanol because of the tariffs, Rounds said. That means “at least part of the ethanol that we’ve got right now is going to benefit from those tariffs being imposed,” Rounds said.

“We’ve absolutely got to be adding value to every single product we’ve got here in South Dakota,” Rounds said. “That means running it through as many times as we can. The ethanol plants have got to be able to maximize as much as they possibly can.”

South Dakota Searchlight launched in 2022. The Searchlight is an affiliate of States Newsroom, the nation’s largest state-focused nonprofit news organization, supported by grants and donations. The staff of the Searchlight retains full editorial independence.