Soy far, soy good for Ag Processing (AGP), the largest farmer-owned soybean processor in the world, and roughly the fourth-largest soybean processor in the US based on capacity. It purchases and processes more than 5.5 million acres of members' soybeans per year. The farmer-owned cooperative is also a leading supplier of refined vegetable oil in the US. It procures, processes, markets, and transports grains and grain products, ranging from human food ingredients to livestock feed to renewable fuels. AGP is owned by about 180 local and regional cooperatives and represents more than 250,000 farmers in 15 states throughout the US.
AGP operates nine soybean processing plants, including six located in Iowa. Other soybean processing plants are located in Minnesota, Missouri, and Nebraska. The company operates a growing ethanol plant in Nebraska to serve the renewable fuels market and soybean methyl ester plants in Iowa and Missouri. (Soy methyl ester, an alternative to petroleum-based products, is a byproduct that is used in everything from biodiesel to solvents.)
In addition to its soybean processing and vegetable oil refining facilities, AGP operates a merchandising and trading group called Ag Products, subdivided into three areas of focus: Grain, Protein, and Export. Ag Products Grain focuses on marketing grain for members seeking to better compete in the global grain industry. Ag Products Protein markets soybean meal and soy hulls; it also manufactures AMINOPLUS, a protein that improves milk production. Ag Products Export offers international marketing of soybean meal, oilseeds, grains, and other bulk agricultural commodities. Its main gateway to the fast growing Pacific Rim market is through a West Coast export shipping terminal in Washington state.
AGP also holds investment stakes in Masterfeeds, a Canadian feed manufacturing business, and in Protinal/Proagro, Venezuela's largest poultry processor and one of country's largest animal feed producers.
AGP recorded its fourth best earnings year in the company's history in fiscal 2011. Its earnings from continuing operations (before income taxes) nearly doubled from 2010. Soybean processing rebounded from the previous year partly due to more aggressive export efforts. The company's vegetable oil business had its most profitable year yet as a result of improved demand from the soy biodiesel market, improved oil quality, and improved plant efficiency. Its renewable fuels business (ethanol and biodiesel) started slowly but finished 2011 strong, posting improved earnings over 2010.
With evolving EPA mandates, the potential is still strong for integrated biodiesel producers like AGP, which led it to acquire a 60-million gallon biodiesel plant in Algona, Iowa in 2011. The acquisition doubled AGP's biodiesel production capacity, now totaling about 120 million gallons.
Another major component of AGP's strategy is investing in expanding, upgrading, and modernizing various facilities for improved capacity and efficiency. In 2011 the company initiated major upgrade and modernization projects at soy processing plants in Sergeant Bluff, Iowa and Dawson, Minnesota. It also undertook a multi-million dollar expansion project at its Aberdeen, Washington-based export terminal as overseas shipments to Pacific Rim countries increases.
In 2012 Ag Processing merged its Masterfeeds subsidiary with the Canadian commercial feed business (Feed-Rite) of Ridley to form the second-largest feed provider in Canada, Masterfeeds LP. The new entity operates 22 manufacturing plants across the Quebec, Ontario, and Prairie provinces. Ridley and Ag Processing each own relative shares in Masterfeeds LP.