Biobased Fuels Continue to Drive Soybean Demand

Soybean demand comes from a variety of sources, but aside from livestock feed, biodiesel and other soy bio-based fuels are among the top demand drivers for soybean oil. Soy-based biofuels collectively are an essential market for soybean growers, says Heather Buechter, director of communications for Clean Fuels Alliance America.

“That is one of the things that we are proud of is that we were founded by soybean farmers to get rid of this excess soybean oil and find new markets for it, provide more value to soybean farmers,” said Buechter, referring to the beginnings of the Soybean Checkoff-supported Clean Fuels Alliance America. “Over the years, I feel like we’ve done a pretty good job of that; we’re adding up to 13 percent of value to soybean farmers because of clean fuel production, and demand continues to grow.”

That message is being heard. Various facets of the transportation industry are showing interest in switching to cleaner fuels for decarbonization, according to Buechter.

“So the more we educate rail, marine, home heating on-and-off-road transportation, we’re just seeing demand increase and providing more return on investment to farmers,” she said. “So you know, it’s an all-around great story of American ag fueling and feeding our nation.”

Among five feedstocks that go into the production of biodiesel, renewable diesel and sustainable aviation fuel, soybean oil is the most frequently used.

“Soybean oil is still our primary feedstock, and we’re using every ounce we can get, about a billion pounds every month going into our industry,” she explained. “And we’re going to continue to work to get even more; we just need more soybean oil to do it. But we’re seeing crush capacity come online as well and increasing, so a lot of opportunities ahead.”

There are billions of dollars invested in developing more soybean crush capacity, including a new plant under construction near Mitchell, South Dakota, and every gallon of soybean oil means more soybean meal to feed livestock.

“The more feed that is out there, then that lowers costs, obviously, but also it’s helping feed not only Americans, but it’s also helping feed countries around the world, so there’s more export opportunities available for that meal too,” she said. “That’s something, I think, gets overlooked that the population is growing and there’s a growing demand for more food, and this is just a really great way to solve that problem.”