By MARK POWELL

4/25 Townsends announced April 20 that it is closing its soybean crushing operation in Millsboro, Del. Officials said that over the past few years, the soybean extraction business segment has not been economically viable.
Townsends had previously announced that it was selling assets to Mountaire, including its poultry processing plant, hatchery and feedmill along with the soybean processing facilities. That sale will be completed in May.
In a related matter, Townsends officials said they had inked an agreement in principle in which the edible soy oil refinery located at Millsboro will be leased to Perdue Farms.
According to Townsends spokesman Patrick Johnston, the soybean crushing facility handles 6 million bushels a year.
Perdue operates the Delmarva Peninsula’s other soybean crushing facility. Townsends listed three factors in its decision to close the crushing facility:
• A substantial capital investment in technology would be required to achieve a more competitive cost structure and compete with large processors in the industry. (Townsends has less than a 1 percent market share.)
• The decrease in cropland, which reduces the supply of local soybeans, and the absence of rail service at the Millsboro site have resulted in escalating operating costs.
• The non-competitive energy source (fuel oil) vs. lower cost natural gas used by most of Townsends’ competitors.
Johnston said many of the employees at the Townsends plant will receive employment opportunities with Perdue and Mountaire.
G. Wallace Caulk Jr., Delaware Farm Bureau executive director, said the loss of the Townsends crushing facility will have a significant impact on First State farmers. Soybeans are the state’s top cash crop, 205,000 acres producing about $23 million in receipts. The Townsends plant, Caulk said, was handling up to 60 percent of the state’s beans. “The loss of Townsends’ storage could have a major impact,” he said. Soybeans can be shipped to Perdue’s facility in Maryland or a Cargill plant in Norfolk, Va., which Perdue is in the process of purchasing. Caulk said some Delaware farmers may consider planting something other than soybeans this spring as a result of the Townsends announcement. Delaware farmers also recently lost vegetable processor Draper-King Cole.