Biodiesel Works… For Poultry and Livestock Farmers

U.S. soybean farmers don’t have to choose whether they will produce a crop used to make food, feed or fuel – they can grow a product used for all three.

Biodiesel works for the U.S. soybean industry’s No. 1 customer – poultry and livestock farmers, who use 97 percent of U.S. soybean meal. Because soybeans can be crushed for oil and meal, increased demand for soybean oil to make biodiesel also increases the supply of soybean meal that can be used to make animal feed. That increased supply leads to lower prices paid by poultry and livestock farmers.

From 2005 to 2009, increased biodiesel production lowered soybean meal prices by as much as $48 per ton, making a big impact on animal farmers’ bottom lines. During a 5-year period, biodiesel demand has saved animal ag farmers $4.8 billion in soy meal costs while adding 74 cents per bushel to the bottom line of soybean farmers.

Biodiesel also benefits the animal ag sector by increasing animal carcass value. Animal fats, or tallow, are the second-largest fuel source used to create biodiesel. In 2011, biodiesel producers used 1.29 billion pounds of animal fats, contributing to nearly 30 percent of the total production. This increased demand for animal fats adds value to the entire animal ag industry. It has helped to generate an additional $16.79 of value per head for beef cattle farmers and create a new market.

Biodiesel works for poultry and livestock farmers. And thanks to farmer support and the soy checkoff, its success continues to grow.