Increased Biodiesel Production Benefits Poultry and Livestock Farmers

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Demand for soy oil leads to lower soy meal prices, checkoff-funded study shows

The federal Renewable Fuel Standard will require the use of 1.28 billion gallons of biodiesel in 2013, 28 percent more than in 2012. This requirement bodes well for U.S. soybean farmers whose soy oil remains the primary feedstock for U.S. biodiesel manufacturing. But it’s also good news for U.S. poultry and livestock farmers, who will benefit from every gallon of biodiesel produced, according to the Economic Impacts of Biodiesel Production, a soy-checkoff-funded study. Here are two ways animal farmers gain from biodiesel production:

1. Lower relative meal prices
As more soy oil is processed for biodiesel production, more soy meal is available for livestock feed.

“Demand for biodiesel creates demand for soy oil, which, in turn, lowers the cost of soy meal and the price of rations for our poultry and livestock farmers,” says Lewis Bainbridge, USB secretary and a soybean farmer from Ethan, S.D.

The study found biodiesel’s demand for soy oil has lowered feed prices by as much as $48 per ton.

2. Increased animal carcass value

In 2011, biodiesel producers utilized 1.29 billion pounds of animal fats, which contributed to nearly 30 percent of the total production. Growth in biodiesel production has led to increased animal carcass value and higher value per head harvested for poultry and livestock farmers. According to U.S. Department of Agriculture, increased demand for animal fats has generated an additional $16.79 on beef value per head.

“All soybean farmers should ask for and use biodiesel,” says Bainbridge. “It supports animal farmers, it decreases our dependence on foreign oil and it’s homegrown and renewable – we can make more with every new crop.