Presentation is loading. Please wait.

Presentation is loading. Please wait.

The Impacts of Expanded Biodiesel Production on the World Soybean Market Rafael Costa, Dwi Susanto & Parr Rosson Center for North American Studies (CNAS)

Published byJordan Webb Modified over 9 years ago

Similar presentations

Presentation on theme: "The Impacts of Expanded Biodiesel Production on the World Soybean Market Rafael Costa, Dwi Susanto & Parr Rosson Center for North American Studies (CNAS)"— Presentation transcript:

1 The Impacts of Expanded Biodiesel Production on the World Soybean Market Rafael Costa, Dwi Susanto & Parr Rosson Center for North American Studies (CNAS) Dept. of Agricultural Economics Texas A&M University

2 Objective Quantify the Impacts of Increased Biodiesel Production in the U.S. and Brazil on the International Soybean Market

3 Overview Biodiesel and Soybeans in the World Trade - Biodiesel Production and Expansion - World Soybean Production and Exports Methodology Scenarios and Results Conclusions

4 World Biodiesel Market EU is the largest biodiesel producer (1,711 million gallons in 2008), however… - Major feedstock for EU production is canola oil, not soybean oil U.S. is largest soybean-based biodiesel producer in the world followed by Brazil - In 2008, U.S. production = 393 million gallons. Brazil production = 290 millions gallons

5 Biodiesel Domestic Policies U.S. - Renewable Fuels Standard (RFS) has been a boost to biofuels production - FAPRI Forecast for 2018, U.S. production = 1,184 million gallons Brazil - Government program National Biodiesel Production Program (PNPB) establishes legal mandate for the use of biodiesel as a fuel - FAPRI Forecast for 2018, Brazil production = 875 million gallons

6 World Soybean Industry Source: PS&D, FAS/USDA World Soybean Production (1990/91- 2008/09) 1990/911994/951998/992002/032008/09 0% 20% 40% 60% 80% 100% ROW Argentina Brazil U.S. World Soybean Exports (1990/91-2008/09) 1990/911994/951998/992002/032008/09 0% 20% 40% 60% 80% 100% ROW Argentina Brazil U.S.

7 Methodology – International Spatial Equilibrium Model Quadratic programming model developed by Costa (2007). Spatial and temporal dimensions (quarters). 18 excess supply and 8 excess demand regions in Brazil. 5 exporting (excess supply) regions: US, Argentina, Rest of South America (RSA), Canada, and India. 5 importing countries (excess demand) regions: China, EU, Southeast Asia, Mexico, and the rest of the world (ROW).

8 Simulation Analysis 3 Scenarios - Scenario 1: 10% Increase in Biodiesel Production in the U.S. and Brazil  Total soybean crushed in the U.S. and Brazil goes up by 4,732 and 2,828 TMT, respectively  Conversion rate one bushel = 1.49 gallons of biodiesel, total biodiesel production in the U.S. and Brazil increases by 259 and 154 million gallons, respectively - Scenario 2: 20% Increase in Biodiesel Production in the U.S. and Brazil  Total soybean crushed in the U.S. and Brazil goes up by 9,464 and 5,657 TMT, respectively  Similarly, total biodiesel production in the U.S. and Brazil increases by 518 and 309 million gallons, respectively - Scenario 3: 30% Increase in Biodiesel Production in the U.S. and Brazil  Total soybean crushed in the U.S. and Brazil goes up by 14,196 and 8,485 TMT, respectively  Similarly, total biodiesel production in the U.S. and Brazil increases by 777 and 464 million gallons, respectively

9 Scenario 1: Impact on Prices ($/MT) Exporting CountryBase modelScenario 1Deviation (%) United States234.06269.7315.24 Brazil*200.62236.4617.86 Argentina234.14269.8115.23 Rest of South America234.14269.8115.23 Canada244.18279.8514.61 India246.27281.9414.48 Importing Country China278.94314.6112.79 European Union271.05306.7213.16 Southeast Asia278.94314.6112.79 Rest of the World267.77303.4413.32 *Farm Price

10 Scenario 1: Impact on Exports and Imports (thousand MT) Exporting CountryBase modelScenario 1Deviation (%) United States25127.3923149.98-7.87 Brazil26123.1924599.88-5.83 Argentina7325.897710.235.25 Rest of South America3229.463351.753.79 Canada1323.41377.114.06 India022.14- Total63129.3360211.09-4.62 Importing Country China28319.0527180.22-4.02 European Union13810.6513308.79-3.63 Southeast Asia11146.2310461.96-6.14 Mexico3535.143322.52-6.01 Total63129.3360211.09-4.62

11 Scenario 2: Impact on Prices ($/MT) *Farm Price Exporting CountryBase modelScenario 2Deviation (%) United States234.06300.928.56 Brazil*200.63267.2133.19 Argentina234.14300.9828.55 Rest of South America234.14300.9828.55 Canada244.18311.0227.37 India246.27313.1127.14 Importing Country China278.94345.7823.96 European Union271.05337.8924.66 Southeast Asia278.94345.7823.96 Rest of the World267.77334.6124.96

12 Scenario 2: Impact on Exports and Imports (thousand MT) Exporting CountryBase modelScenario 2Deviation (%) United States25127.3921573.65-14.14 Brazil26123.1923115.89-11.51 Argentina7325.898046.159.83 Rest of South America3229.463458.637.1 Canada1323.41424.057.61 India041.7- Total63129.3357660.07-8.66 Importing Country China28319.0526184.87-7.54 European Union13810.6512870.15-6.81 Southeast Asia11146.239863.93-11.5 Mexico3535.143136.6-11.27 Total63129.3357660.07-8.66

13 Scenario 3: Impact on Prices ($/MT) Exporting CountryBase modelScenario 3Deviation (%) United States234.06329.4540.75 Brazil*200.63295.7547.41 Argentina234.14329.5340.74 Rest of South America234.14329.5340.74 Canada244.18339.5739.07 India246.27341.6638.73 Importing Country China278.94374.3334.2 European Union271.05366.4435.19 Southeast Asia278.94374.3334.2 Rest of the World267.77363.1635.62 *Farm Price

14 Scenario 3: Impact on Exports and Imports (thousand MT) Exporting CountryBase modelScenario 3Deviation (%) United States25127.3920181.6-19.68 Brazil26123.1921706.43-16.91 Argentina7325.898353.6614.03 Rest of South America3229.463556.4710.13 Canada1323.41467.0210.85 India059.63- Total63129.3355324.81-12.36 Importing Country China28319.0525273.69-10.75 European Union13810.6512468.6-9.72 Southeast Asia11146.239316.44-16.42 Mexico3535.142966.44-16.09 Total63129.3355324.81-12.36

15 Conclusions In all scenarios, the direction of the impacts was the same. Only change was in the magnitude. U.S. and Brazil -  Biodiesel Production =>  Crushed Soybeans =>  Soybean prices &  Exports Importing Countries -  Soybean prices &  Imports World Trade Decreases

16 Conclusions (Cont.) Future considerations - Dynamic setting would improve our ability to assess the impacts of biodiesel production on the world soybean market - Development of a stronger biodiesel industry will depend on changes in the petroleum prices.

17 Questions? Rafael Costa Ph: 979-845-7277 E-mail: rfcosta@ag.tamu.edu

Download ppt "The Impacts of Expanded Biodiesel Production on the World Soybean Market Rafael Costa, Dwi Susanto & Parr Rosson Center for North American Studies (CNAS)"

Similar presentations

SOYBEANS. Soybeans were domesticated in China High in protein 38 % protein.

SOYBEANS. Soybeans were domesticated in China High in protein 38 % protein.
Socio-Economic Impacts of U.S. Ethanol Bruce A. Babcock Center for Agricultural and Rural Development Iowa State University.

Socio-Economic Impacts of U.S. Ethanol Bruce A. Babcock Center for Agricultural and Rural Development Iowa State University.
University Extension/Department of Economics Risk Environment for Agriculture Agricultural Credit School Ames, Iowa June 8, 2010 Chad Hart Assistant Professor/Grain.

University Extension/Department of Economics Risk Environment for Agriculture Agricultural Credit School Ames, Iowa June 8, 2010 Chad Hart Assistant Professor/Grain.
Grain, Oilseed, and Biofuel Outlook Chad Hart Center for Agricultural and Rural Development Iowa State University January 18,

Grain, Oilseed, and Biofuel Outlook Chad Hart Center for Agricultural and Rural Development Iowa State University January 18,
Department of Economics Risk Environment for Agriculture Agricultural Credit School Ames, Iowa June 8, 2009 Chad Hart Assistant Professor/Grain Markets.

Department of Economics Risk Environment for Agriculture Agricultural Credit School Ames, Iowa June 8, 2009 Chad Hart Assistant Professor/Grain Markets.
1-1 Chapter 1 WORLDWIDE DEVELOPMENTS. 1-2 Regional Developments Impacting Internationalization North American Free Trade Agreement (NAFTA) –U.S., Canada,

1-1 Chapter 1 WORLDWIDE DEVELOPMENTS. 1-2 Regional Developments Impacting Internationalization North American Free Trade Agreement (NAFTA) –U.S., Canada,
Department of Economics Crops & Biofuels: Policies, Outlooks, and Debates Chad Hart Iowa State University 515-294-9911 Iowa Farm Bureau.

Department of Economics Crops & Biofuels: Policies, Outlooks, and Debates Chad Hart Iowa State University Iowa Farm Bureau.
1 Biodiesel: The implications for soybean and product markets International Oilseed Producer Dialogue IX June 16-17, 2006.

1 Biodiesel: The implications for soybean and product markets International Oilseed Producer Dialogue IX June 16-17, 2006.
Canola: Competing in the World Food Oil Market Carl Hausmann President and CEO Bunge North America.

Canola: Competing in the World Food Oil Market Carl Hausmann President and CEO Bunge North America.
Overview of the Global Oilseed Markets Annual Meeting National Cottonseed Products Association Santa Fe, New Mexico May 4, 2009 John Baize.

Overview of the Global Oilseed Markets Annual Meeting National Cottonseed Products Association Santa Fe, New Mexico May 4, 2009 John Baize.
Recent world grain market trends Opportunities for Mexico Michel FERRET FranceAgriMer, Paris 10/11 April 2013.

Recent world grain market trends Opportunities for Mexico Michel FERRET FranceAgriMer, Paris 10/11 April 2013.
World Feed and Food Supply and Demand Governors’ Agriculture, Energy, and Sustainability Roundtable Governors’ Biofuels Coalition Washington, DC January.

World Feed and Food Supply and Demand Governors’ Agriculture, Energy, and Sustainability Roundtable Governors’ Biofuels Coalition Washington, DC January.
China: the expanding market for world soybean production

China: the expanding market for world soybean production
An Assessment of the Global Soybean Industry: An Application of Stochastic Equilibrium Displacement Model Rafael de F. Costa, Yan Xia, & Parr Rosson Center.

An Assessment of the Global Soybean Industry: An Application of Stochastic Equilibrium Displacement Model Rafael de F. Costa, Yan Xia, & Parr Rosson Center.
The U.S. and World Sugar Industries under the EU and DOHA Trade Liberalization Won W. Koo   Chamber of Commerce Distinguished Professor and Director  

The U.S. and World Sugar Industries under the EU and DOHA Trade Liberalization Won W. Koo   Chamber of Commerce Distinguished Professor and Director  
US-Chile Free Trade Agreement What is there for Agriculture? Jaime Malaga Texas Tech University Flynn Adcock Texas A&M University Center for North American.

US-Chile Free Trade Agreement What is there for Agriculture? Jaime Malaga Texas Tech University Flynn Adcock Texas A&M University Center for North American.
Govinda R. Timilsina The World Bank, Washington, DC Fourth Berkeley Bioeconomy Conference March 24-26, 2011 Economic and Environmental Impacts of Biofuels.

Govinda R. Timilsina The World Bank, Washington, DC Fourth Berkeley Bioeconomy Conference March 24-26, 2011 Economic and Environmental Impacts of Biofuels.
Current Trends in North American Supply Chain Management: Agriculture The Case of Beef and Pork Flynn Adcock Center for North American Studies Dept. of.

Current Trends in North American Supply Chain Management: Agriculture The Case of Beef and Pork Flynn Adcock Center for North American Studies Dept. of.
The Impact of the EU Biofuel Policy on the Feedstock Markets in the EU and Worldwide Stephan Hubertus Gay European Commission, DG Agriculture and Rural.

The Impact of the EU Biofuel Policy on the Feedstock Markets in the EU and Worldwide Stephan Hubertus Gay European Commission, DG Agriculture and Rural.
World Soybean Situation 2007

World Soybean Situation 2007

Similar presentations

Ads by Google