1. Economics of Biodiesel and the Impact on Commodities
Allan Gray,
Purdue University
Center for Food and Agricultural Business

2. Some Basic Figures Biodiesel used as fuel extender and lubricant
73% of Biodiesel made from Soybean Oil
1 bushel of SB = 1.49 gallons of biodiesel
1 gallon of soyoil = 1 gallon of biodiesel
Soyoil = $1.50 to $2.10/gal.
1 bushel of corn = 2.7 gallons of ethanol
$2/bu. = $0.74/gal. - $3/bu. = $1.11/gal.
Crude Oil
Oil $70/brl. = $1.67/gal. - $50/brl. = $1.19/gal.

3. Some Basic Figures Subsidies Co-Products
$1.00/gal. for Biodiesel = $1.50 per bushel
$0.52/gal. for Corn = $1.40 per bushel
Co-Products
Biodiesel – Glycerine
0.89 lbs. per gallon worth about $0.18/lb. and declining

4. Annual Distillate Consumption

5. U.S. Biodiesel Production

7. Alternative Feedstocks

8. Projected U.S. Soybean Oil Demand and Production
Largest Production Year on Record

9. Projected U.S. Soybean Demand and Production

10. Forecasted Soybean Acres and Production
Source: FAPRI, University of Missouri

11. Projected Impact of Increased Biodiesel Demand on Soybeans
Oil
Price
Soybean
Meal
Stocks

12. Potential New Feedstocks
Soybean Oil gallons per acre
Canola Oil – 111 gallons per acre
Castor Oil – 141 gallons per acre
Others
Crambe, flax, mustard, sunflower, camelina

13. Final Comments Biodiesel industry is relatively young
Growth rate dictated by price of Oil/Diesel first and then soybean oil prices
Important part of National Energy Policy but, Not Likely More than 10% of total distillate fuels in future