By Joe Janzen and Scott Irwin et.al
In the past five years, the renewable diesel boom has spurred new demand for soybean oil as a feedstock in production of biofuels. Soybean processors can respond to higher demand like this in multiple ways. Most obviously, they can crush more soybeans to produce more soybean oil. The downside to more crushing activity is more soybean meal, the other main product of the soybean crushing process. A lack of demand for this additional soybean meal may hurt soybean processing margins and keep soybean prices lower than they otherwise would be. Irwin and Good (2012, 2017) provided extensive analysis of the initial US biodiesel boom that began in about 2008 with the implementation of the US Renewable Fuels Standard. Figure 1 shows the approximate timing of this surge in US biodiesel production and the more recent renewable diesel boom. Irwin (2017) found the initial biodiesel boom was accompanied by a concurrent increase in soybean meal demand, mitigating some of the potentially negative impacts of skewed soybean product demand on soybean prices.
In a recent article (Janzen and Wang, 2025), we showed crush composition changes are another important part of the soybean industry response to demand shifts. We identified two additional ways in which processors can respond to an increase in soybean oil demand: i) enhancing crush efficiency to get more oil and meal (and less waste) out of each bushel of soybeans and ii) changing the relative shares of oil and meal in the crush to get relatively more oil (and less meal and waste).