Soybean oil demand is skyrocketing, and bean processors are pulling out their “Go Green” stickers and gearing up for what they believe will be a biodiesel boom.
Refresher: The Renewable Fuel Standard (RFS) is scheduled to reset in 2022, and the EPA has the authority to set required biofuel volumes. With an expected “green agenda” push by the Biden Administration, Cargill is ratcheting up their processing capacity: taking money from the bank and putting it in the (biodiesel) tank.
By the numbers:
- 25%: Approximate increase in soybean oil futures already this year.
- $475 million: Cargill’s five-year investment in processing plants across seven states.
- 100%: Planned increase in soybean crushing capacity at Cargill’s Sidney, OH plant
And it’s not just Cargill who’s rolling up their sleeves. ADM has announced processing efficiency improvements, and Bunge – the world’s #1 oilseeds processor – is planning to invest in refinery efficiency and tank-storage capacity.
Oh, and this… Soy producers and processors aren’t the only ones with skin in the game. The corn industry is promoting more than just kernels of truth about ethanol as the EPA starts shelling out its plans for the RFS. All this in an effort to remind EPA Administrator Mike Regan that ethanol has 40%-50% lower greenhouse gas emissions than gasoline.
Bottom line: Rising future demand should bode well for producers. Zippy Duvall, American Farm Bureau President, made his case when he noted, “Homegrown, renewable fuel has been an American success story, and expanding to more international markets can make it a global success story.”