US soybean processing industry: optimal size, number and location

The US dominates world soybean production and trade. The soybean industry is confronted with organizing facilties to minimize the costs of assembly, processing, and distribution of the final products. A transshipment model was constructed to minimize the combined costs of assemblying and processing soybeans, and distributing the co-products - meal and oil - to demand centers. Four solutions are presented, one each for the years 1977, 1981, 1990, and 2000. Trends of supply and utilization data indicate that the growth of exports would be such that future export demand could be fully satisfied only if some degree of domestic use of soybeans for meal and oil were sacrificed. Trucks were the dominant mode of domestic soybean and soybean meal shipments. Rail dominated soybean oil shipments. When regional processsing constraints are eliminated, substantial savings in total costs result. This indicates that the potential exists for significant future cost reductions on a national basis, if processing transshipment points can be more optimally sized and located.