Do you know what percent of the U.S. soybean crop is used for biodiesel?
The biodiesel use of soybeans is to be about 16 percent of the total soybean crop this coming year (as a % of total U.S. soybean acres – used for biodiesel) or 468 million bushels.
Both the biodiesel and ethanol plants are having difficulty with profitability since the drought has driven up prices for their feedstocks.
The increase in mandated use of both corn ethanol and biodiesel, plus this year’s drought, means high prices of these two commodities, reduced exports of corn and soybeans from the U.S., growing competition in production of these commodities abroad resulting in the development of new farmland, as well as ailing livestock, poultry, and dairy industries. Ecologically, these policies have meant less crop rotation, greater intensive farming on marginal lands, greater acreage devoted to these two industrial crops, and we are seeing the removal of corn stover from corn fields for readily accessible cellulosic feedstock. Land prices have increased due to policy support of growing these monoculture crops, making them profitable even in a severe drought year such as this.
Biodiesel RINS credits have fallen in price recently because the mandate for this year was met in production by early November. The price of RINS is indicative of the demand for biodiesel. Because RINS were sold on secondary markets, they have been exploited fraudulently.
The mandate for biodiesel use was begun in 2010, and has increased each year since then. Though the soybean industry is pleased with the mandate, they also want to see the tax credit which expired last January to be reinstated.
According to the DesMoines Register, the American Fuel and Petrochemical Manufacturers asked the U.S. government to reconsider its decision to increase the amount of biodiesel required for use in the nation’s trucks next year by 28 percent due to “unintended consequences” including higher fuel prices for consumers.