DEMAND DRIVERS Opportunities abound for soybean oil BY AARON PUTZE, APR
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hat was once a backseat driver in creating soybean demand and profitability now has two hands firmly on the wheel. Soybean oil demand is booming, a trend that’s expected to have staying power. “We’ve come a long way in a short time in terms of building markets for soy-based energy,” says Grant Kimberley, a farmer from Maxwell and Iowa Soybean Association’s (ISA) senior director of market development. “Whether for fuel or as protein for livestock and people, demand is growing, and there’s reason to be optimistic as we look to the next two to three years.” Demand drivers for soy abound, benefiting soybean and livestock farmers and the environment.
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Whole soybean sales to China and other key buyers are on the uptick. Soybean crush is running strong, thanks to improvements in the global economy and a rebuilding of pig herds in south Asia after being decimated by African Swine Fever. Stepped-up efforts to curb carbon emissions domestically are also fueling demand for cleaner energy alternatives, including biodiesel and renewable diesel. More conversations about carbon and climate are timely topics for the biodiesel industry to be involved in, says Donnell Rehagen, CEO of the National Biodiesel Board (NBB).
Winning formula “Renewable diesel, biodiesel and sustainable aviation fuel are making
headlines,” he says. “All drive growth for oil stocks, and that’s a winning formula for soybean farmers.” The proof is in the numbers. Kimberley says biodiesel demand accounts for 13% of the net market value of soybeans, or $1.69 per bushel, when cash prices hit $13. More demand resulting from higher biodiesel blends, renewable diesel and new uses will only bolster these numbers. Kimberley, who also serves as Iowa Biodiesel Board’s (IBB) executive director, says biodiesel blends up to B20 can be used in any diesel engine, and some users can even go up to 100%. B20 burns cleaner than petroleum-based diesel fuel and significantly reduces particulate and carbon emissions.
