Biodiesel Boom Sends Soybean Oil Prices Soaring
Soybean oil prices have reached a four-year high this month due to increased demand for biodiesel, which is driving up production levels and investment in the industry.
The Renewable Fuel Standard's volume requirements for 2026 and 2027 have sparked record production levels, with biodiesel plants operating at 375% capacity through spring. This has led to all-time highs in renewable diesel and sustainable aviation fuel production in May.
The growth of the biodiesel industry is having a significant impact on agriculture, with soybeans recently topping $11 per bushel for the first time in two years. A new processing plant in Gilman, Illinois, now handles 300,000 bushels daily, providing an additional buyer for 7,000 area farms.
The industry is pulling demand from multiple agricultural sources, including soybean oil, distillers' corn oil from ethanol plants, recycled cooking oil, and animal fats. However, this growth faces legal challenges as oil refiners and environmental groups challenge the EPA's renewable volume requirements in court.