The Soybean Crush Margin, Explained

What the crush margin is

The crush margin is the processor's gross profit from turning soybeans into their two products — soybean meal and soybean oil:

Crush margin = value of meal + value of oil − cost of soybeans

A 60-pound bushel of soybeans yields roughly 44 pounds of meal and 11 pounds of oil (the rest is waste and hulls). Because meal trades in dollars per short ton and oil in cents per pound, the standard board crush converts everything to per-bushel terms:

Board crush ≈ (meal price × 0.022) + (oil price × 0.11) − soybean price

using futures prices for all three legs. (0.022 ≈ 44 lb ÷ 2,000 lb per ton; 0.11 = 11 lb of oil.)

Why a grower should care

You don't crush beans, but the people bidding on your beans do. The crush margin is a direct read on processor demand:

• Fat crush margins mean every bushel a plant runs is profitable, so plants run hard and bid aggressively for supply. That demand shows up locally as firmer basis around processing plants.
• Thin or negative crush means plants slow down, take downtime, and stop chasing bushels — and nearby basis usually softens.

If your local market includes a crush plant, its margin is one of the better leading indicators for your basis.

Reading it honestly

• The board crush is a gross margin — plants also pay for energy, labor, and transport, so a "positive" board crush isn't automatically a profitable plant.
• Oil and meal don't move together. Renewable-diesel demand can carry oil while meal drags, or the reverse — the mix matters for which plants run hardest.
• Crush is one demand channel among several (exports, feed, fuel). Use it as a signal, not a verdict.