South Dakota Soybean Processors Reports 20.5% Revenue Decline in Q1 2025

South Dakota Soybean Processors, LLC reported a decline in financial performance for the first quarter of 2025, with revenues totaling $117.9 million, a decrease of 20.5% from $148.3 million in the same period of 2024. The company's net income also fell to $4.4 million, down from $5.5 million year-over-year. This decline is attributed primarily to a significant drop in the average sales price of soybean products, particularly soybean oil, which decreased by 21.4% due to reduced demand from the energy sector and increased competition from lower-priced alternatives.

In terms of operational metrics, the company experienced a notable increase in inventories, which rose to $66.3 million from $45.1 million at the end of 2024. This increase in inventory levels reflects the company's strategic decision to bolster its supply chain in anticipation of future demand. Additionally, the company reported a working capital of approximately $36.9 million, a significant decrease from $151.2 million in the previous year, largely due to capital expenditures related to the construction of the High Plains Processing plant.

The company is actively progressing on the construction of the High Plains Processing facility near Mitchell, South Dakota, which is expected to begin operations in the fall of 2025. This facility is anticipated to enhance the company's processing capabilities and market competitiveness. As of March 31, 2025, the company had approximately $118.6 million in unpaid commitments for the construction and acquisition of property and equipment, indicating a strong investment in future growth.

Financially, South Dakota Soybean Processors has maintained a robust capital structure, with total assets amounting to $582.4 million, up from $541.9 million at the end of 2024. The company’s long-term debt increased significantly to $133.1 million from $57.7 million, reflecting the financing of the ongoing construction projects. The company has also established various credit facilities to support its operational and capital needs, with available borrowing capacity of approximately $62.6 million under its seasonal loan agreement.

Looking ahead, the company remains cautiously optimistic about market conditions, with soybean meal and oil exports tracking at record levels. However, potential global tariffs may pose challenges to future growth. The management believes that the ample supply of soybeans from the previous crop year will provide operational flexibility and enhance export competitiveness in a dynamic market environment.