SOUTH DAKOTA SOYBEAN PROCESSORS LLC
For the period ended Jun 30, 2025. Filed Aug 8, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 8, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001163609-25-000017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-08.
0001163609-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 42 previous paragraphs and 52 current paragraphs.
23 unchanged; 14 reworded; 11 added; 4 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased approximately $269,000, or 8.6%, during the six-month period ended June 30, 2025, compared to the same period in 2024, due to an increase in professional and related costs associated with the start-up of the High Plains Processing plant.
Current report
Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $2.1 million during the six-month period ended June 30, 2025, compared to the same period in 2024. The increase in other non-operating income was due to a $2.2 million increase in interest income which we received from the deposit of investment proceeds received by our subsidiaries in connection with their equity financing of the High Plains Processing plant.
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
On March 19,2025, the State of South Dakota Department of Transportation agreed to loan the Davison Regional Railroad Authority $12.6 million for purposes of making improvements to the railway infrastructure at the operating facility near Mitchell, South Dakota. In consideration of this secured loan, agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus 2.0% interest. This guarantee was converted into a direct obligation of ours on May 27, 2025, when we received the entire loan proceeds and assumed responsibility for the annual principal and interest payments of $987,500, which begins on October 1, 2026. These payments will continue through October 1, 2032, at which time a final balloon payment will be due for the remaining unpaid principal and any accrued interest.
Removed paragraphs (4)
Previous report
Our consolidated net income for the three-months ended March 31, 2025 decreased from $6.1 million in 2024 to $4.1 million in 2025. The Chicago Board Crush, a key measure of soybean processing profitability published by the Chicago Board of Trade, has edged slightly lower compared to the previous three-month period. A softening in demand for soybean oil was the principal cause for the decrease in net income.
Previous report
Regulatory developments and uncertainty tied to biofuels programs also played a role. While the full implications of the 45Z production credit for clean transportation fuel remains unclear, market sentiment suggests a strong desire to expand renewable fuel output and to address the increasing volume of used cooking oil imports.
Previous report
Looking ahead, the market in 2025 appears to be gradually adapting to the challenges encountered in 2024. Soybean meal and oil exports are currently tracking at a record-setting pace, although the potential for global tariffs may temper future progress. Nonetheless, we are well positioned to capitalize on market opportunities, supported by an ample supply of soybeans from last year’s crop. This robust supply base enhances our operational flexibility and strengthens our export competitiveness in a dynamic global environment.
Previous report
On the operational front, the High Plains Processing plant near Mitchell, South Dakota—co-owned through our subsidiaries—is progressing well. Construction remains on schedule and equipment deliveries are nearly complete. Barring any significant weather-related disruptions or construction delays, we expect the plant to begin operations in the fall of 2025.
Reworded paragraphs (14)
Previous wording
The information in this quarterly report on Form 10-Q for the three-month period ended March 31, 2025, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2024.
Current wording
The information in this quarterly report on Form 10-Q for the six-month period ended June 30, 2025, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2024.
Previous wording
Revenue – Revenue decreased by $30.3 million, or 20.5%, for the three months ended March 31, 2025, compared to the same period in 2024 due to decreases in the average sales price of soybean products. The average price of soybean oil decreased 21.4% during the three months ended March 31, 2025, compared to the same period in 2024, due to a decrease in demand from the energy sector as refining margins for biodiesel and renewable diesel producers came under pressure from overproduction, which led to production slowdowns at some location, and a trend that has continued into 2025. In addition, imports of used cooking oil and other feedstocks lower-priced alternatives to soybean oil flooded the market and directly affected soybean oil sales. The average soybean meal prices also declined by 18.7% from 2024 due to an increase in U.S. soybean crushing capacity in 2024.
Current wording
Revenue – Revenue decreased by $39.1 million, or 26.1%, for the three months ended June 30, 2025, compared to the same period in 2024 due to decreases in the average sales price of soybean products and in production. The average soybean meal prices declined by 15.4% from 2024 due to an increase in U.S. soybean crushing capacity in 2024. The average price of soybean oil decreased 13.2% during the three months ended June 30, 2025, compared to the same period in 2024, due to a decrease in demand from the energy sector as refining margins for biodiesel and renewable diesel producers came under pressure from overproduction, which led to production slowdowns at some location. In addition, imports of used cooking oil and other feedstocks lower-priced alternatives to soybean oil flooded the market, contributing to an oversupply and adversely affecting soybean oil sales.
Previous wording
Gross Profit/Loss – Gross profit decreased by $1.4 million, or 19.5%, for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was mainly due to declining board crush margins which was caused by a decrease in demand for soybean oil and an increase in the U.S. soybean meal supply.
Current wording
Gross Profit/Loss – Gross profit decreased by $8.3 million, or 96.8%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease was mainly due to declining board crush margins which was caused by a decrease in demand for soybean oil and an increase in the U.S. soybean meal supply.
Previous wording
Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, remained relatively constant during the three months ended March 31, 2025, compared to the same period in 2024.
Current wording
Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased by $0.2 million for the three months ended June 30, 2025, compared to the same period in 2024. The increase was primarily due to higher administrative costs related to our new High Plains Processing facility. Expenses increased due to increased in administrative costs resulting from getting closer to the facility's start up in October 2025.
Previous wording
Interest Expense – Interest expense decreased by $303,000, or 20.8%, during the three months ended March 31, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $56.7 million during the three months ended March 31, 2025, compared to $74.0 million during the same period in 2024. Additionally, approximately $1.1 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the three months ended March 31, 2025, compared to $0 in the same period of 2024.
Current wording
Interest Expense – Interest expense decreased by $692,000, or 36.1%, during the three months ended June 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $61.3 million during the three months ended June 30, 2025, compared to $90.3 million during the same period in 2024. Additionally, approximately $2.3 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the six months ended June 30, 2025, compared to $0 in the same period of 2024.
Previous wording
Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $0.8 million during the three months ended March 31, 2025, compared to the same period in 2024. The decline was primarily driven by an approximate $1.1 million decrease in interest income earned on investment proceeds held by our subsidiaries in connection with the equity financing of the High Plains Processing plant.
Current wording
Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $1.3 million during the three months ended June 30, 2025, compared to the same period in 2024. The decline was primarily driven by an approximate $1.3 million decrease in interest income earned on investment proceeds held by our subsidiaries in connection with the equity financing of the High Plains Processing plant.
Previous wording
Net Income/Loss – During the three-month period ended March 31, 2025, we generated net income attributed to the Company of $4.4 million compared to $5.5 million for the same period in 2024. The $1.1 million decrease was primarily attributable to decreased gross margins.
Current wording
Net Income/Loss – During the three-month period ended June 30, 2025, we generated a net loss attributed to the Company of $1.0 million compared to a net income of $6.0 million for the same period in 2024. The $7.0 million decrease was primarily attributable to decreased gross margins and interest income.
Previous wording
Our primary sources of liquidity are cash generated from operations and borrowings from our two revolving lines of credit, which are discussed in the section titled “Indebtedness.” As of March 31, 2025, we had working capital, defined as current assets less current liabilities, of approximately $36.9 million, compared to $151.2 million on March 31, 2024. Working capital decreased between periods primarily due to expenditures related to the construction and development of the High Plains Processing plant, which we have a controlling ownership stake through our subsidiaries.
Current wording
Our primary sources of liquidity are cash generated from operations and borrowings from our two revolving lines of credit, which are discussed in the section titled “Indebtedness.” As of June 30, 2025, we had working capital, defined as current assets less current liabilities, of approximately $38.1 million, compared to $107.8 million on June 30, 2024. Working capital decreased between periods primarily due to expenditures related to the construction and development of the High Plains Processing plant, of which we have a controlling ownership interest through our subsidiaries.
Previous wording
The $8.1 million increase in cash flows used for operating activities was largely due to a $10.0 million increase in inventories offset by a decrease in net income of approximately $2.0 million.
Current wording
The $34.9 million decrease in cash flows used for operating activities was largely due to a $13.8 million increase in inventories, a decrease in contract liabilities of approximately $8.0 million and by a decrease in net income of approximately $11.1 million.
Previous wording
The $37.7 million increase in cash flows used for investing activities during the three-month period ended March 31, 2025, compared to the same period in 2024, was due to an increase in expenditures for purchases of various property and equipment used for the construction and development of the High Plains Processing plant.
Current wording
The $53.0 million increase in cash flows used for investing activities during the six-month period ended June 30, 2025, compared to the same period in 2024, was due to an increase in expenditures for purchases of various property and equipment used for the construction and development of the High Plains Processing plant.
Previous wording
The $49.7 million decrease in cash flows provided by financing activities was principally due to a decrease in proceeds from issuance of new capital units in our consolidated entities and a decrease in borrowings with our lender. During the three months ended March 31, 2024, our subsidiaries received $57.5 million in investment proceeds in connection with their equity financing, which were subsequently contributed for the construction and development of the High Plains Processing plant. Net proceeds from seasonal borrowings and long-term debt were $80.1 million during the three months ended March 31, 2025, compared to $110.1 million during the same period in 2024. Partially offsetting the decrease was a $31.8 million reduction in cash distributions to members during the three-month period ended March 31, 2025, compared to the same period in 2024.
Current wording
The $29.7 million increase in cash flows provided by financing activities was principally due to a decrease in proceeds from issuance of new capital units in our consolidated entities offset by an increase in borrowings with our lender. During the six months ended June 30, 2024, our subsidiaries received $57.5 million in investment proceeds in connection with their equity financing, which were subsequently contributed for the construction and development of the High Plains Processing plant. Net proceeds from seasonal borrowings and long-term debt were $141.5 million during the six months ended June 30, 2025, compared to $88.2 million during the same period in 2024. Partially offsetting the decrease was a $31.8 million reduction in cash distributions to members during the six months ended June 30, 2025, compared to the same period in 2024.
Previous wording
The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. We may borrow up to $70.0 million until the loan's maturity on December 1, 2025. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of March 31, 2025 and December 31, 2024, the principal balance outstanding on this credit line was $7.4 million and $0, respectively. Under this loan, there were $62.6 million of additional funds available to borrow as of March 31, 2025.
Current wording
The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. We may borrow up to $70.0 million until the loan's maturity on December 1, 2025. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of June 30, 2025 and December 31, 2024, the principal balance outstanding on this credit line was $4.6 million and $0, respectively. Under this loan, there were $65.4 million of additional funds available to borrow as of June 30, 2025.
Previous wording
The third line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million until March 31, 2026. Principal payments of $4.5 million are made quarterly beginning six months after the completion date of the High Plains Processing facility. The quarterly principal payments will increase by $1.0 million on the anniversary date and continue until the maturity date of December 31, 2029. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed;. The principal balance outstanding on this note was $80.3 million and $18.7 million as of March 31, 2025 and December 31, 2024, respectively. Under this note, there were $173.7 million of funds available to borrow as of March 31, 2025.
Current wording
The third line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million until March 31, 2026. Principal payments of $4.5 million are made quarterly beginning six months after the completion date of the High Plains Processing facility. The quarterly principal payments will increase by $1.0 million on the anniversary date and continue until the maturity date of December 31, 2029. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed;. The principal balance outstanding on this note was $131.8 million and $18.7 million as of June 30, 2025 and December 31, 2024, respectively. Under this note, there were $122.2 million of funds available to borrow as of June 30, 2025.
Previous wording
The revolving, seasonal and delayed-draw term loans with CoBank are set up with a variable rate option. The variable rate is set daily by CoBank. We also have a fixed rate option on all three loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the loans was range between 6.56% and 7.76% as of March 31, 2025.
Current wording
The revolving, seasonal and delayed-draw term loans with CoBank are set up with a variable rate option. The variable rate is set daily by CoBank. We also have a fixed rate option on all three loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the loans was range between 6.54% and 7.44% as of June 30, 2025.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Revenue – Revenue decreased by $69.4 million, or 23.3%, for the six-month period ended June 30, 2025, compared to the same period in 2024 due to decreases in the average sales price of soybean products and in production. The average soybean meal prices declined by 17.0% from 2024 due to an increase in U.S. soybean crushing capacity in 2024. The average price of soybean oil decreased 17.5% during the six months ended June 30, 2025, compared to the same period in 2024, due to a decrease in demand. Soybean oil demand from the energy sector dropped dramatically in 2024 as refining margins for biodiesel and renewable diesel producers came under intense pressure from overproduction which led to production slowdowns at some locations. In addition, imports of used cooking oil and other feedstocks flooded the market, contributing to an oversupply and adversely affecting soybean oil sales.
Current report — wording carried from elsewhere
Gross Profit/Loss – Gross profit decreased by $9.7 million, or 61.1%, for the six months ended June 30, 2025, compared to the same period in 2024. The decrease was mainly due to declining board crush margins which was caused by a decrease in demand for soybean oil and an increase in United States soybean meal supply.
Current report — wording carried from elsewhere
Interest Expense – Interest expense decreased by $1.0 million, or 29.5%, during the six months ended June 30, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $67.8 million during the three months ended June 30, 2025, compared to $82.1 million during the same period in 2024. Additionally, approximately $3.4 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the six months ended June 30, 2025, compared to $0 in the same period of 2024.
Current report — wording carried from elsewhere
Net Income/Loss – During the six-month period ended June 30, 2025, we generated a net income of $3.4 million, compared to $11.5 million for the same period in 2024. The $8.1 million decrease was primarily attributable to decreased gross margins and decrease in interest income.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Comparison of the Three Months Ended March 31, 2025 and 2024