Biofuels have a crush on soybeans

On Tuesday, the National Oilseed Processors Association Crush Report, a monthly look at soybean processing, gets released. Lately, numbers have been high, partly because one of the byproducts can be used as fuel.

Before we dive in, CoBank’s Jacqui Fatka has a little soybean refresher: “It is a little tiny pea-sized hard bean.”

That little bean gets crushed or pressed at a plant, and “out comes oil and a powdery type of soybean meal,” she said. That soybean meal is basically livestock lunch. The oil is vegetable oil, like the one sitting in your kitchen. But it’s also processed into a biofuel.

“Diesel engines — the first one was invented back in 1870s — and it was designed to run on vegetable oil,” said Allen Schaeffer, executive director of the Engine Technology Forum.

These days, what you’re getting at the pump is mostly petroleum, with a little soybean or corn oil blended in. Schaeffer said biofuels can bring down diesel prices by about 4%, which helps a little.

“The prices are of such magnitude that that 4% is easily overshadowed,” Schaeffer said.

Still, biodiesel is having a moment. The Trump administration is mandating 60% more domestic production in the next couple of years. The idea is to support soybean and corn farmers, but it’s tricky.

“On the other side of it, the change in diesel values is really where it hurts,” said Susan Stroud, who runs a market research firm called No Bull Agriculture. And that’s because regular petroleum diesel is still needed to make a farm operation go ‘round.