Cargill is ceasing operations at its cottonseed crush plant in Narrabri, New South Wales, which has been unprofitable for several years, World Grain reported on 9 October.

Peter McBride, director of corporate affairs for Cargill in the region, said the plant was expected to run out of cottonseed by mid-October due to a reduction in affordable supply as a result of an ongoing drought in New South Wales. At that point, the company would shut down operations.

“The cottonseed market has changed significantly as whole cottonseed is now a highly valued feed product for both the domestic and international livestock markets,” McBride said.

“The economies of crushing cottonseed have also changed due to lower oil yields in the seed and a range of suitable domestic and international product alternatives for cottonseed oil, meal and hull.”

Food manufacturing costs were also high and there had been significant increases in energy costs.

McBride said Cargill remained committed to its grain and oilseed business in Australia and would continue to buy grain and oilseeds through its AWB/Grainflow network to support its domestic and international customers.

The company’s canola crushing facilities in Newcastle, New South Wales, and Footscray, Victoria, would continue to operate as normal, he added.