South Dakota Soybean Processors Reports 91.3% Revenue Growth but Faces Net Loss in Latest Quarter

South Dakota Soybean Processors, LLC reported significant financial changes in its latest 10-Q filing for the quarter ending March 31, 2026. The company generated revenues of $225.5 million, a substantial increase of 91.3% compared to $117.9 million in the same period last year. This growth was primarily driven by a 91.2% rise in soybean processing volumes, attributed to the operational commencement of the Mitchell facility, which effectively doubled the company's processing capacity. However, the company faced challenges with a gross loss of $5.5 million, a stark contrast to the gross profit of $5.9 million reported in the previous year, largely due to mark-to-market losses and initial operational costs associated with the new facility.

The company's net loss for the quarter was $4.3 million, compared to a net income of $4.4 million in the first quarter of 2025. This decline was primarily due to softened demand for soybean oil, influenced by regulatory delays in the renewable fuels market, which compressed oil values and operational margins. Additionally, the Mitchell facility experienced startup inefficiencies and lower utilization rates, further impacting financial performance. The increase in interest expenses, which rose by 434% to $6.1 million, was also a contributing factor, driven by higher borrowings under the company's credit facilities.

Operationally, South Dakota Soybean Processors reported a notable increase in its current assets, totaling $234.3 million as of March 31, 2026, compared to $183.7 million at the end of 2025. This increase was largely due to higher inventories, which rose to $182.8 million from $132.8 million, reflecting the company's expanded processing capabilities. The company also reported a working capital of approximately $46.8 million, up from $36.9 million a year earlier, despite the challenges faced during the quarter.

Looking ahead, the company anticipates a recovery in financial performance for the remainder of 2026, driven by the Environmental Protection Agency's recent release of record-level Renewable Volume Obligations (RVOs), which are expected to boost demand for soybean oil, particularly in the renewable diesel sector. Additionally, strong demand for soybean meal is projected to continue, supported by robust domestic and export markets. The company expects to capture margins previously deferred by mark-to-market accounting as current forward margin positions mature, indicating a potential turnaround in profitability in the upcoming quarters.