Rising soybean prices cramp biodiesel producers' style

With biodiesel production plants popping up all over (big ones, too), we should thank the folks who cover the farm industry for taking a look at feedstock prices and giving us a look at where we might be headed. While there are many potential sources of matter to make biodiesel from, in America most of our biodiesel comes from soybeans. It follows that rising soy prices are a cause for concern for biodiesel users.
Speaking at the AgTechnology Field Day at Agricenter International in Memphis, Kenneth "Pete" Moss of FBA Consulting said that "the biodiesel industry is somewhat a victim of its own success. We've grown rapidly, and with all the construction activity and plants coming on line, we're seeing a lot of speculation in the soybean market right now. Soybean oil should be in the 25-cent per pound range." Instead, in mid-July, a pound of soybeans cost 40 cents, which comes to $3 for just for the feedstock in a gallon of biodiesel (i.e., without adding the cost for refining). Getting the price for biodiesel biomass down to a reasonable level will require producing different biomatter (perhaps high-oil soybeans or camelina or algae) and getting the oil to biodiesel producers.

Check out the source article for Moss' take on the battle between growing corn and soybeans for biofuels and to read why he figures that biofuels are here to stay. Basically, "The market today really seems to be pulling biofuels. That's a big difference compared to previous attempts to push it into the market," according to Western Farm Press.

[Source: Western Farm Press / Elton Robinson]

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