Editor's Note: As the year came to a close, we once again asked the DTN/Progressive Farmer reporting team to pick out the most significant, most fun or otherwise their favorite, story of 2025. We hope you enjoy our writers' favorites, continuing the series with today's story by DTN Lead Analyst Rhett Montgomery.

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In the September issue of Progressive Farmer magazine, I discussed the steady expansion seen in soybean processing capacity in the United States, specifically in response to growing demand for soybean oil as a biofuel feedstock.

The article specifically discussed the June 2025 EPA proposed biofuel volume obligations, as well as suggested protections for North America produced feedstock as very bullish for the industry during the next few years.

While the political side of the story remains up in the air to begin 2026, the soybean crush program is off to yet another record-breaking start for the soybean marketing year.

Through the first quarter (September through November 2025), U.S. plants crushed 663 million bushels (mb) of soybeans, 8.2% more than the same period in 2024, while setting an outright monthly record in October and individual monthly records for each respective month.

Early forecasts would suggest USDA may be underestimating 2025-26 crush demand by as much as 50 mb, which certainly would help soften the blow from a very slow start to export demand for U.S. soybeans, while U.S. soybean ending stocks are already forecasted by USDA to be the lowest in three years despite a 13-year low in export demand. In the grand scheme, U.S. soybean crush has only decreased year-over-year once in the past decade and remains a steady foundation of demand throughout the Midwest.

I enjoyed writing this column and I think it is very important because it keeps the dynamics of the soybean market in perspective. Specifically, with so much media attention in 2025 going to the trade war with China and the resulting slump in soybean exports, I felt the impressive growth in crush demand was being overlooked. Also, given that the U.S. has only exported more soybeans than have been crushed domestically in four years throughout history, I wanted to take a moment to give the spotlight to the industry as the demand leader.

The following is the original Progressive Farmer article from September 2025.

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Inside the Market

Crushing It: U.S. Soybean Processing Continues To Make Its Mark

At long last, political support for the biofuel sector has left little doubt of booming soybean oil demand in 2025-26, and U.S. crushers are ready to answer the call for added supply.

By Rhett Montgomery

DTN Lead Analyst

The past year, 2024 into 2025, was a bit of a lost year when it comes to the biofuel industry in the U.S. and soybean oil's place within it. On one hand, rampant imports of used cooking oil and a general sense of uneasiness regarding tax incentive and mandate support at the federal level led to a four-year low in soybean oil used for the production of biomass-based diesel in February of 2025. On the other hand, the value of U.S. soybean oil was not lost on the rest of the world, and exports more than quadrupled over the 2024-25 marketing year as compared to the previous year.

Now, the landscape looks to shift once again with the early-June Renewable Fuel Standard proposal from the EPA, which increased proposed volume requirements from 3.35 billion gallons (bgal) in 2025 to 5.61 bgal in 2026 and 5.86 bgal in 2027. Not only is this a steep increase in mandated biofuel production, but the EPA has proposed that feedstocks not originating from the U.S., Canada or Mexico face reductions on RIN (Renewable Identification Number) generation by up to 50%. This, combined with the 2025 budget bill's 45Z tax credit excluding the same feedstocks, essentially looks to end used cooking oil's growing dominance within the industry. As of the July "World Agricultural Supply and Demand Estimates" report, USDA has added 3.25 billion pounds of soybean oil to go to biofuel creation in 2025-26 as compared to 2024-25 while reducing exports. USDA is essentially signaling that there simply won't be enough supply to satisfy both domestic and foreign demand for U.S. soybean oil.

As for the need for soybean oil supply, U.S. processors stand ready to provide it. Crush volume in the U.S. is expected to expand another 5% through 2026 after having already grown just under 6% the previous year. Bearish traders have focused on the expected decline in soybean exports through next year and the falloff from record export years immediately post-COVID.

But what seems to be overlooked is that this is how demand has usually been structured within the U.S. soybean market. In fact, exports have only exceeded domestic crush in four years historically. It would appear that those four years occurring within a six-year span from 2015-2021 has distorted the view on how the market has typically functioned, that being that domestic users get first priority. More so, I can think of no better way for President Donald Trump to push his agenda of increased U.S. manufacturing and jobs, bolstering of rural America, increased independence from China and increased energy dominance than to keep pressing for more big, beautiful soy crush plants in the United States.

Trade is important, and a trade deal with China to boost soybean exports again would certainly be a huge win for U.S. agriculture. I can't help but think the most pivotal demand source for soybeans has always been in our own backyard.

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

Follow him on social platform X @R_D_Montgomery

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