NBB In Sight

The current success of biodiesel has brought up some important questions. For example, how big can the biodiesel industry become, given our existing feedstock base? How big could our industry become if we actually tried to produce vegetable oils and animal fats directly rather than relying on byproducts of food production for humans and livestock? Sustainable growth for biodiesel will be dependent upon a number of factors: consumer confidence; petroleum pricing; public policy to catalyze growth, such as the biodiesel tax incentive; and improved efficiencies (i.e., processing and distribution). Growth will also be a function of raw material availability.

Although I love to quote our former chairman when he says "never underestimate the ability of farmers to overproduce," facts do not cease to exist because they are ignored. Two recent independent studies have found that modest growth in biodiesel demand will cause upward pressure on vegetable oil prices. The reality is that raw material availability could become a natural brake for significant future growth.

So, how do we increase potential raw material supplies in the United States when arable land is a finite resource? In simple terms, we will need to do one or all of the following:

• Grow more beans


• Raise the means


• Change the genes

Soybeans represent the largest vegetable oil source for biodiesel in the United States. Increased soybean prices due to biodiesel usage could indeed lead to the planting of more soybeans, thus increasing soybean oil supplies. Increased corn prices due to ethanol usage will also have to be taken into account.

Increased soybean oil supplies can also be generated by increasing yield per acre. Yields are certainly higher today than 20 years ago; however, soybean yields would need to increase significantly to reach governmental goals like 5 percent to 20 percent of the diesel market. Another approach would be to increase the oil content in soybeans. This strategy, if accomplished without negatively impacting protein levels (i.e., feeding value) of soybean meal, could generate greater quantities of soybean oil. For example, increasing the oil content of soybeans by only 1 percent could generate almost 250 million gallons of potential biodiesel feedstock per year.

I have highlighted soybean oil, but the same is true for other vegetable oils. The approach of the National Biodiesel Board is that a balance of feedstocks is more likely to be sustainable than a single feedstock focus. While we are immersed in fuel quality issues, vehicle and engine manufacturer approvals, and federal rulemakings, we must also consider the need for additional raw material supplies in the future. Like farmers, we need to remember that we can't sow and reap in the same day. We need earnest efforts today to achieve sustainable industry growth.