Company: SDSYA
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001163609-25-000010
Chunk: 10

Company: SOUTH DAKOTA SOYBEAN PROCESSORS LLC
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 10
---
 guide our net position limits are inadequate, we could suffer adverse financial consequences.

Our business is not diversified. Our success depends primarily on our ability to profitably operate our soybean processing and soybean oil refining plants.  We do not have any other material lines of business or other material sources of revenue if we are unable to operate our soybean processing and soybean oil refining plants. This lack of diversification may limit our ability to adapt to changing business conditions and could cause harm to our business.

9

We are dependent on our management and other key personnel, and the loss of their services may adversely affect our business. Our success and business strategy is dependent in large part on our ability to attract and retain key management and operating personnel. This can present challenges for us, because we operate in a specialized industry and our business is located in a rural area. Key employees are in high demand and are often subject to competing employment offers in the agricultural value-added industries within the local and regional area. Any loss of the key employees or the failure of these individuals to perform their job functions in a satisfactory manner would have a material adverse effect on our business operations and prospects.

We operate in an intensely competitive industry, and we may not be able to continue to compete effectively. We may be unable to continue to successfully penetrate the markets for our products. The soybean processing business is highly competitive, and other companies presently in the market, or that could enter the market, could adversely affect prices for the products we sell. We compete with major soybean processors such as Archer-Daniels Midland (ADM), Cargill, Bunge, and Ag Processing (AGP), among others, all of which are capable of producing significantly greater quantities of soybean products than we do and may achieve higher operating efficiencies and lower costs due to their scale. AGP's processing facility in Aberdeen, South Dakota, could increase the competition for soybeans and adversely affect our business.

Our profitability is influenced by the protein and moisture content of soybeans in the local area. The northern portion of the western soybean belt, where our two soybean crushing plants are located, typically produces a lower protein content soybean, which results in lower protein soybean meal. Because lower protein soybean meal is sold at a lower price, we may not be able to operate as profitably as soybean processing plants in other parts of the country. If adverse weather conditions further reduce the protein content of the soybeans grown in our area, our business may be materially harmed because we will be required