Soybean oil prices more than double over past two years

High prices for soybean commodities have coincided with a steady rise in soybean oil prices, bringing the cost of the biodiesel feedstock to more than twice what it was in January 2006.

Soybean oil is commonly used to make biodiesel, though other plant oils and even animal fats can be used to produce the fuel. On Friday, soybean oil for March delivery topped 53 cents a pound on the Chicago Board of Trade.

With the high prices for soybean oils, biodiesel producers are often supplementing their feedstocks with other materials. At Global Fuels LLC in Dexter, Mo., poultry grease is often used as a feedstock.

The proportion of soybean oil and poultry grease used to create Global Fuels' biodiesel changes with the price of soybean oil, said plant manager Tim Hutchcraft.

Hutchcraft said that regardless of the feedstock, the plant still makes the same quality of biodiesel.

There's is a perception that biodiesel made from animal fats isn't as high quality, but the fuels are the same quality, said Ronald Hayes, program manager for fuel quality with the Missouri Department of Agriculture, the agency responsible for testing biodiesel quality.

However, Hayes did say biodiesel made from animal fats tends to gel at a higher temperature than biodiesel made from soybean oil.

Soybean oil isn't the only biodiesel feedstock going up in price, said Missouri Soybean Association executive director Dale Ludwig.

And when soybean oil prices rise, soybean meal prices fall, Ludwig said, because meal prices don't need to be as high to get the same value from the soybean. That meal is used both in human food and livestock feed.

In Missouri, the state government helps insulate the industry from high input costs with a 30-cent-per-gallon grant for plants 51 percent owned by Missouri farmers or using 80 percent of feedstock with Missouri origin.