Demand for biodiesel pushed the U.S. to produce 600 million gallons of biodiesel in 2008, a significant jump compared with the past several years. This demand also brought U.S. soybean farmers an additional $2.5 billion in net returns, according to a new study released by the United Soybean Board.
Biodiesel has helped offset soybean demand, which took a hit in 2006 when trans fats were eliminated from many food products because of U.S. Food and Drug Administration labeling requirements, says Jimmy Sneed, a regional director for the United Soybean Board.
However, soybean growers wanting to take advantage of the biodiesel market still face challenges. Critics say the use of agricultural commodities for alternative fuel is partly to blame for increased food prices.
When processed, soybeans produce 80% soybean meal and 18% crude soybean oil, Sneed counters. "Only the oil is used for biodiesel production,” he says. "This is a win-win situation because as the demand for soy biodiesel increases, the amount of available soy protein also increases and reduces the price of meal used for feed.”