Bunge North America, the North American operating arm of Bunge Limited, recently announced it would idle production at its soybean processing facility at Marion, Ohio, U.S., until margins improve.
The current weak margin environment has been caused by declining demand for domestic soybean meal in the short term and a smaller than anticipated U.S. soybean crop harvested last fall.
"While we continue to believe that long-term prospects for soybean processing in the U.S. are attractive, this is the first time since 1989 that domestic consumption of soybean meal is running below the previous year," said John E. Klein, president and chief executive officer of Bunge North America.
He said factors adversely affecting U.S. demand for soybean meal included lower demand from the pork and poultry sectors, which have experienced production cutbacks. Klein added that although world meal demand continued to grow, record soybean crops in South America had reduced demand for U.S. meal exports.
The announcement marks the third time in 2003 that Bunge has acted to curb U.S. soybean processing capacity in the existing low-margin environment. In January, Bunge announced it was postponing a planned expansion of its soybean plant in Morristown, Indiana, and in February, Bunge announced the idling of a plant in Cairo, Illinois.
Bunge is not alone in its efforts. In December, Archer Daniels Midland Co. announced it would decrease soybean crush rates at several of its U.S. locations, and earlier this year, ADM announced the permanent closure of its soybean plant in Fredonia, Kansas.