Company: SDSYA
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001163609-25-000023
Chunk: 21

Company: SOUTH DAKOTA SOYBEAN PROCESSORS LLC
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 8
Chunk 21
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 results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.

Executive Overview and Summary

During the six-months ended June 30, 2025, we recorded a $8.1 million decline in net income compared to the same period in 2024. The primary cause of the decline was weaker product values for both soybean meal and soybean oil.

Soybean oil prices were significantly impacted by reduced demand from the biofuels sector. A key factor in reduced demand was the federal government’s delay in implementing critical components of the biofuel programs, prompting many biodiesel and renewable diesel producers to cut production. Additionally, a surge of imported feedstocks, such as used cooking oil, entered the U.S. market, challenging soybean oil's competitiveness due to less favorable carbon intensity scores.

An increase in soybean processing capacity resulting from several new plants coming operational further impacted the market. This expansion boosted the supply of both soybean oil and soybean meal. Although soybean meal exports remained strong, the additional domestic supply and heightened competition from South American producers pressured U.S. cash basis values, which fell to record lows in the latter half of the period.

Looking ahead, the federal government has issued guidance that is expected to strengthen biofuels demand. The proposed Renewable Volume Obligations (RVOs) under the Renewable Fuel Standard for 2026 and 2027 represent a significant increase over prior years, likely driving robust demand from the biofuels sector beginning in late 2025 and continuing through 2027.

Further, new legislation has been introduced to address the impact of imported feedstocks and biofuels on domestic markets. Elements of the recently passed "Big Beautiful Bill," including  more favorable carbon intensity scoring for soybean oil under the 45Z tax credit framework, have already contributed to stronger soybean oil values and significantly improved board crush margin.

Construction of the High Plains Processing plant near Mitchell, South Dakota, continued to progress steadily. A relatively mild winter once again supported construction efforts, helping to keep the project on schedule. Costs remained within budgeted estimates, and design changes were minimal. The plant remains on track to begin operations in the fall of 2025.

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RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2025 and 2024

Three Months Ended June 30, 2025Three Months Ended June 30,