Last year’s record-breaking biodiesel-production total means record-breaking industrial demand for U.S. soybean oil and bigger profits for U.S. soybean farmers.
According to the U.S. Energy Information Administration (EIA), the U.S. biodiesel industry produced 1.36 billion gallons of biodiesel in 2013, 37% more than in 2012. The EIA says that production required the use of at least 5.5 billion pounds of U.S. soybean oil. That volume is the oil from more than 468 million bushels of U.S. soybeans. Research has shown that the biodiesel industry’s demand for U.S. soybean oil increased soybean value by 74 cents per bushel between 2006 and 2012.
Rob Hanks, United Soybean Board director and a soybean farmer from Le Roy, Minnesota, says he’s thrilled to see biodiesel bring such a major return on investment back to the U.S. soybean farmers who helped start the industry and have continued to support it ever since.
“U.S. soybean farmers have been very supportive of biodiesel for more than 20 years,” he said. “It’s really gratifying to see those farmers reaping the benefits of that support.”
According to research commissioned by soybean farmers in Minnesota, Nebraska, North Dakota and South Dakota through their state soy checkoff boards, biodiesel contributed to a $15 billion increase in soybean-oil revenues, or 74 cents per bushel, between 2006 and 2012. Hanks also points out that using soybean oil for biodiesel supports the U.S. animal agriculture sector.
As the biodiesel industry’s demand for soybean oil rises, so does the supply of soybean meal. That larger supply reduces the prices poultry and livestock farmers pay for feed. U.S. soybean oil remains the primary the feedstock for U.S. biodiesel production. The soy checkoff partners with the National Biodiesel Board to conduct research on biodiesel’s benefits and promote its use.