Market News

Buoyed By Demand, ADM to Build Soybean Crushing Plant In North Dakota

Agricultural commodities, food processing, and products provider Archer-Daniels-Midland Company (ADM) plans to build a soybean crushing plant and refinery in North Dakota. ADM has been seeing higher demand from its food, feed, industrial and biofuel customers, as well as from producers of renewable diesel.

The new plant, which calls for an estimated outlay of about $350 million, will have the capacity to process 150 thousand bushels of soybeans daily. ADM expects the plant to be completed before the harvest season of 2023.   

ADM President of Ag Services and Oilseeds business Greg Morris said, “ADM’s commitment to preserving and protecting our planet’s resources stretches from the farm gate to the food on our tables and the renewable fuel we put in our vehicles.”

Morris added, “This exciting new project allows us to partner with North Dakota farmers to further advance the role of agriculture in addressing climate change through the production of low carbon feedstocks for products such as renewable diesel.”

Furthermore, ADM will invest about $25 million on the expansion of its refining and storage capacity at its Quincy, Illinois crush and refining plant. The added capacity is estimated to be ready by Q1 2022. (See ADM stock analysis on TipRanks)

On May 3, Barclays analyst Benjamin Theurer reiterated a Buy rating on the stock and increased the price target to $75 (10.9% upside potential) from $60.

Theurer attributed the upward target price revision to a systemic shift in the Chinese pork industry, future benefits from renewable green diesel, and adjusted operating profit of $1 billion from Nutrition.

Based on 7 Buys and 3 Holds, consensus on the Street is that ADM is a Moderate Buy. The average analyst price target of $68.70 implies the stock is fairly priced. Shares have gained about 85.8% over the past year.

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