Producers consider feedstock costs, alternatives

By Erin Voegele | June 17, 2008
Web exclusive posted July 8, 2008 at 3:38 p.m. CST

Biodiesel plants around the nation are feeling the effects of rising soybean oil prices and futures. However, even with an estimated 75 percent of plants currently off-line, the biodiesel industry is in no danger of disappearing.

Soybean futures have been trading above the $16 level, and according to the Chicago Board of Trade, the price of soybean oil closed at $0.6671 per pound July 1. It takes approximately 7.5 pounds of feedstock to manufacture one gallon of biodiesel. With current soybean oil prices, that means it takes approximately $5 worth of the feedstock to make one gallon of fuel. Biodiesel was selling for an average of $5.15 last week, leaving producers a very low profit margin to account for other costs.

To combat the high cost of soybean oil, many in the industry are looking to other feedstocks and vertical integration as ways to remain profitable. By creating vertically integrated facilities that control a sizable amount of acreage and incorporate crushing facilities, producers may be able to lessen the impact of high feedstock prices.

Alternative feedstocks, such as animal fats and waste oils, are less expensive to obtain. In addition, many are hopeful that algae oil technology will improve in efficiency and affordability in the next few years. A few companies are exploring palm oil production in South America and jatropha oil production in Asia, Africa and the West Indies. When compared to soybeans, both have comparatively high oil yields.

Related Articles

 
 
 
Array ( [REDIRECT_REDIRECT_STATUS] => 200 [REDIRECT_STATUS] => 200 [HTTP_USER_AGENT] => CCBot/2.0 (https://commoncrawl.org/faq/) [HTTP_ACCEPT] => text/html,application/xhtml+xml,application/xml;q=0.9,*/*;q=0.8 [HTTP_IF_MODIFIED_SINCE] => Sat, 21 Jul 2018 17:13:43 GMT [HTTP_HOST] => www.biodieselmagazine.com [HTTP_CONNECTION] => Keep-Alive [HTTP_ACCEPT_ENCODING] => gzip [PATH] => /sbin:/usr/sbin:/bin:/usr/bin [SERVER_SIGNATURE] =>
Apache/2.2.15 (CentOS) Server at www.biodieselmagazine.com Port 80
[SERVER_SOFTWARE] => Apache/2.2.15 (CentOS) [SERVER_NAME] => www.biodieselmagazine.com [SERVER_ADDR] => 10.0.0.4 [SERVER_PORT] => 80 [REMOTE_ADDR] => 54.92.163.105 [DOCUMENT_ROOT] => /datadrive/websites/biodieselmagazine.com [SERVER_ADMIN] => webmaster@dummy-host.example.com [SCRIPT_FILENAME] => /datadrive/websites/biodieselmagazine.com/app/webroot/index.php [REMOTE_PORT] => 45476 [REDIRECT_QUERY_STRING] => url=articles/2513/producers-consider-feedstock-costs-alternatives [REDIRECT_URL] => /app/webroot/articles/2513/producers-consider-feedstock-costs-alternatives [GATEWAY_INTERFACE] => CGI/1.1 [SERVER_PROTOCOL] => HTTP/1.1 [REQUEST_METHOD] => GET [QUERY_STRING] => url=articles/2513/producers-consider-feedstock-costs-alternatives [REQUEST_URI] => /articles/2513/producers-consider-feedstock-costs-alternatives [SCRIPT_NAME] => /app/webroot/index.php [PHP_SELF] => /app/webroot/index.php [REQUEST_TIME_FLOAT] => 1539677918.636 [REQUEST_TIME] => 1539677918 )