It’s hard to justify a soybean crushing plant for Western Canada without the region having a bigger crop.
That’s the conclusion of analyst Jon Driedger.
Soybean acres boomed to almost three million in Manitoba and one million in Saskatchewan last year, but that probably won’t be enough to entice the capital needed for a plant.
“You need to see that production growth continue, I think, to maybe see that investment,” said Driedger at the Grain World conference held Nov. 14-15 in Winnipeg.
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If a modern plant requires about 700,000 tonnes to run at peak efficiency, that equals a big portion of today’s entire prairie crop.
Slightly more than three million tonnes were produced last year, with 2.3 million tonnes in Manitoba and 850,000 tonnes in Saskatchewan.
“It’s a pretty good chunk of that pie,” he said. “It’s not to say that it couldn’t work, but… it would consume a pretty good chunk of what we produce today.”
Banking on continued rapid growth might not be a safe bet, Driedger said. Acreage has grown from 800,000 acres five years ago, but “each incremental acre be-comes a little bit more difficult to steal.”
Acreage might plateau this year because of disappointing yields in some areas in 2017, and demand for canola and high protein wheat is strong.
The easiest acres to soybeans to take might already have been grabbed.
“I think we might see some slowing down of growth.”
