AgMRC launches biodiesel profitability spreadsheet

By Susanne Retka Schill | July 15, 2009
A new tool to help biodiesel producers analyze biodiesel economics is available online at The Ag Marketing Resource Center. Don Hofstrand and Bob Wisner, Iowa State University agricultural economists, have developed a set of spreadsheets that are updated monthly. The newest is a biodiesel profitability spreadsheets launched in June.

The spreadsheet tracks Iowa-based prices for biodiesel, soybean oil, methanol and natural gas on a monthly basis, and applies those numbers to a hypothetical 30 MMgy biodiesel plant in Iowa. "We put together what we think is a ballpark or typical biodiesel plant in Iowa to give an overview where the industry is going," explained Hofstrand, co-director of the online center hosted by Iowa State University Extension Service. The model uses construction costs similar to a plant built in 2007, and shows the fixed prices and production efficiencies. Variable costs for soybean oil, natural gas and methanol are updated monthly, using Iowa prices. Free on board Iowa biodiesel prices are also updated monthly, however, glycerin prices are not. "We don't do monthly updates for glycerin because we couldn't find a good data series for glycerin in Iowa," Hofstrand said. He was a bit surprised to see how small of a factor glycerin was in the overall biodiesel profitability analysis, he added, particularly since corn ethanol's distillers grains coproduct is a major component of an ethanol plant's bottom line. The AgMRC has a similar spreadsheet developed for corn ethanol.

The Biodiesel Profitability Chart is available for downloading at, under the renewable energy heading for biodiesel. The Excel spreadsheet is designed so that a biodiesel producer can change the basic values on the "Economic Model" tab to reflect a plant's actual fixed and variable costs and efficiencies to see how the model changes. The nine charts built upon the data entered in the economic model table include analyses of returns per gallon of biodiesel and per pound of soybean oil; the breakeven purchase cost for soybean oil and sale price of biodiesel; return on equity and return over variable cost; and more.

The data available on the AgMRC Web site also includes monthly updates to supply and demand balance sheets for soy biodiesel and for soybeans, based on USDA monthly reports, complete with charts and graphs that show trend lines for the various commodities and projections. Assumptions used by Wisner to develop the projections are given as well.
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