Supply and demand is set to see biofuel feedstock prices climb dramatically if oil prices top the records seen in 2006. At $80 a barrel, the ethanol could bid $5 a bushel for corn, diverting the crops production away from food consumption to powering our vehicles. The same holds true for biodiesel with high oil prices resulting in high soy prices. But soy is hardly the only biodiesel feedstock as we've seen recently, and wholesaling for 60 percent of crude soy oil, tallow and rendered chicken fat could be the new game in town.

Estimates put total U.S. biodiesel production in excess of one billion gallons / 3.79 billion litres by 2012. And biodiesel produced from animal fat could account for as much as half of that. That's a whole lot of chickens.

But that's ok, because companies like Tyson Foods, which has recently announced that they will establish a renewable energy division, produces more than 2.3 billion pounds of chicken fat annually. Using current technology, this should be enough to produce around 300 million gallons / 1.14 billion litres of biodiesel. Taking advantage of this booming interest in biodiesel are groups like the Dutch company, BioKing, which is producing 25 farm-sized biodiesel manufacturing units a week from its factory in Gravenpolder, Holland, for sale throughout the European Union. BioKing plans to sell the same to North America.

Analysis: Oil prices are down, but biofuels are still up, up, up and companies like BioKing are cashing in. At the same time though, the commercial realities mean that rendered animal fats were bound to eventually be put under the microscope because they enjoy such a massive price advantage over soy oil. In Australia, canola oil can barely get a look in because tallow is so much cheaper.

Related:
[Source: Cattle Network]

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