The biodiesel industry’s demand for U.S. soybean oil supported U.S. soybean prices by as much as 27 cents per bushel over the past five years, bringing U.S. soybean farmers an additional $2.7 billion in net returns.
An updated, independent study funded by the United Soybean Board (USB) and soybean checkoff shows production of biodiesel continues to positively impact U.S. soybean farmers’ on-farm profitability, as well as the bottom lines of U.S. poultry and livestock farmers.
The biodiesel industry’s demand for U.S. soybean oil supported U.S. soybean prices by as much as 27 cents per bushel over the past five years, bringing U.S. soybean farmers an additional $2.7 billion in net returns, according to the study.
Soybean farmers’ biggest customer, the U.S. animal agriculture sector, which uses 98 percent of the domestic supply of U.S. soybean meal, also benefitted. The increased demand for soybean oil resulted in a larger supply of U.S. soybean meal, decreasing feed prices paid by U.S. poultry, livestock and fish farmers by between $16 and $48 per ton for a total of approximately $4.8 billion from marketing years 2005-2009.
State soybean checkoff boards made the initial investments back in the early 1990s to research the viability and potential market for soybean oil use for biodiesel. Soybean oil remains the dominant feedstock used for biodiesel production in the United States, and the state and national soybean checkoff funds a large portion of the research and promotion of biodiesel through the National Biodiesel Board, much of which has been used on testing to prove biodiesel’s performance, economic and environmental benefits.
Biodiesel improves fuel lubricity by 66 percent compared with petroleum diesel and performs similarly to petroleum diesel in terms of torque, horsepower, haulage rates and fuel mileage. Biodiesel bolsters the U.S. economy, supporting more than 20,000 jobs and generating more than $800 million in tax revenue as recently as 2009. And biodiesel can reduce greenhouse gas emissions by as much as 75 percent.
Biodiesel’s environmental benefits, proven in part due to soybean checkoff-funded research, helped it qualify as the United States’ first fully-commercialized advanced biofuel under the revised federal Renewable Fuels Standard (RFS2). To qualify for that distinction, biodiesel had to reduce greenhouse gas by 50 percent, compared with petroleum diesel. The RFS2 requirement calls for the use of at least 800 million gallons of biodiesel this year and at least 1 billion gallons per year in 2012 and beyond.
So the U.S. biodiesel industry keeps giving back to soybean farmers, poultry and livestock farmers, the U.S. economy, biodiesel and Bioheat users and the environment.