Biodiesel Building Blocks

BIODIESEL BUILDING BLOCKS

BIODIESEL ADDS VALUE TO LIVESTOCK

BY BETHANY BARATTA

Livestock farmers understand the value of soybeans as a high-protein source for their livestock. Likewise, soybean farmers realize the value of livestock in creating demand for their product. Both industries are supported by biodiesel production.

Biodiesel is made from a diverse mix of feedstocks, including recycled cooking oil, soybean oil and animal fats. It is estimated that 13 percent of biodiesel and renewable diesel in the U.S. is made from animal fats.

“Animal fats and livestock producers are really important to the biodiesel industry,” says Alan Weber, partner at MARC-IV. “Last year, it’s estimated more than 2 billion pounds of animal fats were used to produce biomass-based diesel (biodiesel and renewable diesel) in the U.S.”

Because of the use of animal fats for biodiesel production, the fuel adds value to livestock carcasses and animal fat.

“During these times of suppressed grain and livestock prices, producers are looking for every nickel we can, so the return to livestock from biodiesel is significant right now,” says Iowa Soybean Association (ISA) Board Treasurer Dave Walton, a soybean, corn, cattle and sheep producer near Wilton.

Dave Walton

Weber notes that use of animal fats and tallows for biodiesel production increased inedible tallow prices by approximately 13 percent from 2009 to 2017, which led to increased drop values for carcasses, as well as increased prices received by cow-calf producers. A cow-calf producer would have received approximately $20 per head for each steer or heifer sold from their operation.

“Cattle farmers in our state are farmer-feeders, and that’s the straightforwardness of Iowa’s production ag system,” says Matt Deppe, CEO of the Iowa Cattlemen’s Association. “They not only raise cattle, but they raise crops, too. Value-added is the key to the success of our producers, and biodiesel is one more way we can enhance value to our crop and livestock products.”

Matt Deppe

Similar to the beef industry, use of animal fats and tallows for biodiesel production increased choice white grease by approximately 17 percent from 2009 to 2017, which led to increased drop values for carcasses, as well as increased prices received by market and feeder pig producers. Biodiesel production adds approximately $2.50 to $3 per head for hog producers, MARC-IV estimates.

It’s a win-win for Iowa livestock farmers and crop growers, says John Weber, a crop and hog farmer from Dysart.

“After soybeans are crushed, the livestock industry uses soybean meal for feed rations, and soybean oil is utilized for biodiesel production. Animal fats from packing plants are also used in biofuels. So, the two industries really complement each other,” Weber says.

Pat McGonegle, CEO of the Iowa Pork Producers Association, says biodiesel and pork production go hand-in-hand, especially in Iowa.

“There’s no doubt that the indirect impact of biodiesel is making soybean meal a cost-effective protein source that’s very important to the pork industry, particularly as production margins get tighter,” McGonegle says. “Then, there’s the benefit of using animal fat — choice white grease — in biodiesel production. We view that as another way to increase our sustainability, just like we use the manure nutrients from our hog herds for crop production.”

Pat McGonegle

Biodiesel production adds nearly 90 cents to every bushel of soybeans in Iowa, according to the Iowa Biodiesel Board.

Western Iowa Energy

When Western Iowa Energy, a 45-million-gallon biodiesel plant in Wall Lake, was first designed, a $5 million addition for the pretreatment of animal fats was part of the plans.

“We took that level of risk to say we’re the first ones to produce that level of biodiesel out of animal fat,” says Kevin Ross, secretary of Western Iowa Energy’s board of directors. “I think our plant really pioneered animal fat being a major factor in biodiesel.”

Though operations have shifted since the plant opened in June 2006, the plant has produced biodiesel, which included up to 70 percent animal fats.

Ross, who was named president of the National Corn Growers Association earlier this month, says biodiesel not only supports the livestock industry, but the corn industry, too.

“We are using a hybrid of distillers corn oil, soybean oil and animal fats to determine the best blend to run through our plant,” Ross says. “Biodiesel is something that’s adding value to soybeans, carcasses and corn.”

Increasing demand for soybean oil benefits livestock producers such as ISA District 7 Director Bill Shipley’s family.

Bill Shipley

“The soybean oil is a byproduct of making soybean meal, which goes in our feed rations. So if there’s a good market for soybean oil, then that means soybean meal is more cost effective,” Shipley says.

His family raises pigs, cattle and sheep in addition to soybeans, corn and alfalfa.

“Soybean meal is our numberone use for soybeans, so we have to find a use for the oil,” Shipley says. “That’s why biodiesel is so important.”

Contact Bethany Baratta at bbaratta@iasoybeans.com.