USDA data show food costs decline as biodiesel market soars

By The National Biodiesel Board | December 27, 2016

As Americans set the table for another holiday meal this year, they are paying less for it, according to the USDA’s Food Price Outlook. The Consumer Price Index for grocery store items is 2.3 percent lower than the last year, all while biodiesel production is higher than ever.

“Food is a universal part of most holiday celebrations, and this year prices have dropped even as biodiesel production is breaking records,” said Donnell Rehagen, CEO of the National Biodiesel Board. “As we’ve said for almost a decade, more biodiesel production helps the food supply, despite what opponents incorrectly claim.”

Biodiesel production has grown steadily most years since Congress enacted the federal renewable fuel standard (RFS) in 2005. NBB expects a more than 2.6 billion gallon biodiesel and renewable hydrocarbon diesel market in the U.S. in 2016—a record.

“One reason biodiesel benefits the food supply is because it is made from fats and oils,” said Don Scott, NBB’s director of sustainability. “When we grow protein to feed the world, we naturally get more fat and carbohydrates than we can eat. One example is soybeans. To produce the oil needed to make just one gallon of biodiesel, soybeans make 30 pounds of protein and 22 pounds of carbs and dietary fiber for the food supply at the same time.”

Put another way, a growing world population means we must grow more protein. We can’t grow protein without coproducing fat as a byproduct. Fat is how nature stores energy.

Biodiesel can be produced from any fat or vegetable oil, including recycled cooking oil, animal fats and soybean oil.

By creating a market and value for unwanted soybean oil, biodiesel decreases soy protein meal prices by $20 to $40 per ton, according to a study by Informa Economics. This helps livestock producers with feed prices, and ultimately helps consumers in the price they pay for meat.

“The bottom line is that biodiesel creates net benefits to food supply, and that’s worth a toast this holiday season,” Rehagen said.  

Made from an increasingly diverse mix of resources such as soybean oil, recycled cooking oil, and animal fats, biodiesel is a renewable, clean-burning diesel replacement that can be used in existing diesel engines. It is the only commercial-scale fuel produced across the U.S. to meet the EPA’s definition as an advanced biofuel—meaning the EPA has determined that biodiesel reduces greenhouse gas emissions by more than 50 percent when compared with petroleum diesel.

The National Biodiesel Board is the U.S. trade association representing the biodiesel and renewable hydrocarbon diesel industries, including producers, feedstock suppliers and fuel distributors.

 
 
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