Biodiesel Production Prospects for the Next Decade 

A special report by IHS Global 

Insight's Agriculture Group

PREPARED BY

IHS Global Insight 
 

 Biodiesel Production Prospects for the Next Decade 

The purpose of this analysis is to consider the experience of the past and look at the 

potential for biodiesel production over the decade to come. 

By: 

John R. Kruse, PhD 

March 11, 2011
 Page 1 of 20 

Biodiesel Production Prospects for the Next Decade

Introduction 

The production of biodiesel in the United States has experienced considerable variation 

in the past few years. After a decade of steady increases in biodiesel production 

through 2008, weaker energy prices in 2009 and the uncertain status of the biodiesel 

blenders' credit in 2010 combined with arbitrage and carry over RIN credits resulted in 

reduced biodiesel production in 2009 and 2010. As we begin 2011, crude oil prices are 

edging higher with unrest in the Middle East. Carry over RIN credits appear to be 

minimal and the biodiesel blenders' credit has been reinstated. The biodiesel mandate 

has increased to 800 million gallons and 144 million gallons of the advanced mandate 

will likely be filled by biodiesel given the situation of strong global sugar prices. 

Technological improvements in recovering corn oil from distiller's grains suggest strong 

growth in available supplies of vegetable oil feedstock with excellent greenhouse gas 

emission reduction scores. In short, 2011 is setting up to potentially be a year of strong 

recovery for the industry. 

The purpose of this analysis is to consider the experience of the past and look at the 

potential for biodiesel production over the decade to come. As with any analysis it is 

critical to recognize the key factors affecting this future. Today's mandates set a floor for 

biodiesel production in the future, but will the industry sit at that mandated level or will it 

exceed mandated levels of production? The answer to this question depends on several 

factors including crop yield technologies, biofuels technologies, crude oil prices, policy 

certainty, and global economic growth. In this analysis we explore each of these driving 

factors utilizing the latest information on proven technology, the U.S. Department of 

Energy's (DOE) outlook for crude oil prices, the IHS outlook for global macro economic 

growth in combination with policy certainty. 

The study presents two possible future scenarios. The first scenario is based on a 

realistic view of crop yield growth, the DOE projection of crude oil prices, current 

mandated levels of biodiesel production, and a continuation of the current blender's 

credit. The second scenario is similar to the first scenario except that the current 

mandated level of biodiesel production is expanded by 300 million gallons per year 

reaching 2.5 billion gallons by 2017. 

Scenario Assumptions 

Crude Oil Prices 

For this scenario we used the reference case projection from the 2011 Annual Energy 

Outlook released by the Department of Energy, U.S. Energy Information Administration 

(DOE/EIA) on December 16, 2010.1

 Since the release of this data, crude oil prices have 

increased and in their February 8, 2011 update DOE/EIA has increased their short term 

outlook for crude oil prices significantly (see Figure 1).2

 The importance of the crude oil 

price assumption cannot be understated because it affects the competitiveness of 

biofuels. Higher crude oil prices enable biofuels to be more competitive and result in 

greater production of biofuels assuming there are no barriers to blending. For this 

analysis the reference case continues to be used despite the reality of higher crude oil 

prices in the present. 
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Figure 1. Department of Energy, Crude Oil Price Projections 

U.S. Policy Assumptions 

For this scenario we assumed that the ethanol blend wall was not binding allowing corn 

ethanol production to expand and even exceed mandated levels if the economics 

allowed. The ethanol to unleaded gasoline price ratio was assumed to fall below its 

energy value of 0.65 in order to incentivize consumption of higher ethanol blends. The 

ethanol tax credit was assumed to be extended at 36 cents per gallon through 2022. 

The ethanol import tariff was allowed to expire at the end of calendar year 2013. 

In the case of biodiesel, the $1 per gallon blenders’ credit was extended through 2022. 

In the baseline, the biodiesel mandate of 1 billion gallons was extended through 2022 

and it was assumed that a minimum of 450 million gallons of the advanced mandate 

would be filled by biodiesel (300 million gallons of biodiesel after adjusting for RIN 

value). In the 2.5 billion gallon mandate scenario, the mandate increase by 300 million 

gallons per year beginning in calendar 2013 reaching 2.5 billion gallons in calendar year 

2017. (This mandate includes the assumed the minimum 450 million gallons used to fill 

the advanced mandate in the baseline.) 

Global Economic Growth Assumptions 

The IHS forecast for global macroeconomic growth suggests acceleration in global 

economic growth over the next decade. Real GDP growth is expected to average above 

3.7 percent consistently through 2022. Strong growth in the emerging markets (> 5.4 

percent) and developing countries (>3.8 percent) is expected to drive growth. The 

advanced economies find themselves on a slower pace maintaining just 2 percent 

growth. As incomes grow in the developing world, consumers will continue to add 

protein to their diets increase direct consumption of vegetable oil as well as consumption 

of protein meals via meat consumption. This strong economic growth is the basis for 
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continued strong growth in global vegetable oil demand throughout the scenarios in this 

analysis. 

Crop Yield technology 

Many studies including USDA's annual forecast use linear trends to project future crop 

yield growth. Technology companies such as Monsanto, Dupont, and Sygenta have 

argued that genetic engineering offers the opportunity to accelerate crop yields beyond 

trend levels. Recent measured yield performance backs up those claims. In 2010, 

Monsanto yield data from over 30,000 field comparisons across the US showed an 

average yield advantage of 3.8 bushels per acre for Roundup Ready 2TM versus their 

intial Roundup ReadyTM with an average yield of 54 bushels per acre. Average US 

soybean yields in 2010 were 43.5 bushels per acre.3

 Other research from Farmer’s 

Independent Research of Seed Technologies suggests a yield advantage of 4.5 bushels 

per acre for Roundup Ready 2TM versus initial Roundup ReadyTM varieties. Of the 77.4 

million acres planted in 2010 only about 6 million acres were planted to Roundup Ready 

2TM soybeans (7.7 percent) In 2011, the number of soybean acres planted to Roundup 

Ready 2TM soybeans is expected to reach the mid-teens of millions of acres. 

Soybean yield technologies in the pipeline with greater than 50 percent probability of 

being released include high yield traits offering 7 percent yield improvement, other 

herbicide tolerant soybeans, second generation insect protection, soybean fungal 

resistance, and aphid resistance. 

Based on the demonstrated performance of technologies already available in 2010 we 

have assumed a 10 percent step in soybean yields above trend yield growth levels used 

by USDA and others. This 10 percent step is based on taking 10 percent of the average 

yield over the 2006 through 2008 period and incrementally phasing this in over the 2010 

thorough 2016 period. This amounts to adding 1 bushel per acre above trend yields in 

2011 and reaches 4.1 bushels above trend 2016 (see Figure 2). Note that after 2016 

the yield growth returns to trend levels. Soybean yield assumptions only assume 

technology advancements that are now commercially available and increasingly adopted 

by U.S. producers. 
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Figure 2. Comparison of Realistic Soybean Yield Growth with Simple Trend Growth in 

 the United States. 

Since yield technologies tend to disseminate quickly to Brazil and Argentina, we further 

assume that the 10 percent step in yields extends to these countries in the planting 

season following US adoption. 

In the case of corn, yield growth is also expected to exceed trend growth levels. Two 

technologies are driving this accelerated growth. The first is stacking multiple traits to 

enable the corn plant more resistance to various types of insect pressure in addition to 

herbicide tolerance. In addition, yield gains have been experienced by building the 

required refuge into the seed mix with a bag of seed instead of planting specific acres to 

corn without insect resistant traits. In 2010, Monsanto’s VT Triple ProTM corn hybrids 

demonstrated an 8.8 bushel per acre yield advantage over competitors based on data 

from 9,900 strip trials.3

 Monsanto also notes regional difference in yield improvements 

from refuge reduction. In the Corn Belt, yield improvements ranged from 1.5 to 3 

bushels per acre while in the southern states, yield improvements ranges from 3 to 6 

bushels per acre from refuge reduction. In its final stage of development, drought 

tolerant corn is also emerging. This technology is more difficult to quantify in its impact 

because it affects the distribution of possible corn yields given precipitation variation. 

There were minimal areas of drought in the US over 2008 – 2010 period in order to fully 

test the yield advantage offered by the technology. 

Corn yield technologies in the pipeline with greater than 50 percent probability of being 

released include second generation drought tolerance, better nitrogen utilization, high 

yield traits, roundup ready 2 corn, generation 3 corn rootworm and corn borer traits, and 

other herbicide tolerant corn.4

Based on the demonstrated performance of technologies already available in 2010 we 

have assumed a 7.5 percent step in corn yields above trend yield growth levels used by 
 Page 5 of 20 

USDA and others. While this may seem smaller than soybeans, corn is already starting 

from a very high yield level (US corn yields were 152.8 bushels per acre in 2010). This 

7.5 percent step is based on taking 7.5 percent of the average yield over the 2006 

through 2008 period and phasing it in incrementally over the 2010 through 2017 periods 

as farmers adopt the technology. With an initial increase 3.2 bushels per acre above 

trend yield growth in 2011. This increase reaches 12.2 bushels per acre by 2017. 

It is important to note that we did not extend this increase in corn yields to South 

America at this time. Issues with intellectual property protection in Argentina regarding 

corn technologies and other factors suggested we not make this assumption at this time. 

Figure 3. Comparison of Realistic Corn Yield Growth with Simple Trend Growth in 

 the United States 

Canola yields have also experienced a jump with improvements in genetics. Yield trials 

in non-traditional growing areas such as Kansas averaged over 2000 pounds per acre 

according to Michael Stamm, canola breeder at Kansas State University. The past two 

years of US average canola yields have also born out this shift. In this analysis it was 

assumed that canola yields would trend off of the yield levels experienced the past two 

years representing a step up in canola yields (see Figure 4). 
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Figure 4. Comparison of Realistic Canola Yield Growth with Simple Trend Growth in 

 the United States 

Biofuels Technology 

For these scenarios, the most important technology development is the yield 

improvements in de-oiling distiller’s grains. Demonstrated technology available today 

suggests corn oil yields per bushel of corn processed from distillers’ grains have reached 

levels as high as 1.3 pounds per bushel approaching fractionation yields of 1.5 pounds 

per bushel. This corn oil is an ideal feedstock for biodiesel production. In these 

scenarios we have assumed that corn oil yields from de-oiled distillers’ grains per bushel 

of corn processed will increase from 0.5 pounds in 2010 to 0.6 pounds by 2015 and 1 

pound by 2020. By 2016, half of all ethanol plants are assumed to be de-oiling distillers’ 

grains and by 2022, nearly 70 percent of all ethanol plants are assumed to have this 

capability. Given the quality of the corn oil processed from distillers’ grains it is assumed 

that it will all be used in biodiesel production. 

Table 1. Distillers’ Grains De-Oiling Assumptions 

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Percent of Ethanol Production with De-Oiling Capacity 33% 37% 40% 43% 47% 50% 53% 57% 60% 63% 67% 70%

Yield (Lbs Per Bu of Corn Used in Ethanol Production) 0.53 0.55 0.58 0.60 0.60 0.68 0.76 0.84 0.92 1.00 1.00 1.00

Share of corn oil from DDG's used for biodiesel production 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
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Scenario Definitions and Methodology 

The intention of the scenarios in this analysis is to investigate the economically feasible 

production level for U.S. biodiesel production. As discussed, technology, crude oil 

prices, and government policy play critical roles in determining this level of production. 

We constructed two scenarios in this analysis. The first scenario makes no changes to 

current U.S. policy on biodiesel and investigates the opportunity for biodiesel production 

given current global economic growth and crude oil price projections. 

As we have seen in the past two years, crude oil price changes and policy uncertainty 

have led to considerable variability for the biodiesel sector. The second scenario looks 

at the impact of imposing a mandate to support biodiesel production at the baseline 

level. This provides the certainty necessary for the industry to move forward. 

Baseline Assumptions 

x Realistic yield growth for corn and soybeans based on proven performance. 

x Expansion in corn oil yields from distiller’s grains reaching 1 pound per bushel of 

corn process in 2020. 

x Corn ethanol is not constrained by the blend wall. A tax credit of 36 cents is 

extended through 2022 and the ethanol import tariff expires at the end of 2013. 

x Extension of $1 biodiesel blender’s credit through 2022. 

x EU biofuels targets are only 57 percent met. 

x Brazil meets its 4 percent blending mandate as supported by government auction 

purchases. 

x Argentina meets its 5 percent blending mandate. 

x Biodiesel fills at least 450 million gallons of the advanced mandate (300 million 

gallons of biodiesel) above the 1.5 billion gallons from the biodiesel mandate 

(RIN equivalent). 

x Biodiesel mandate remains at 1 billion gallons 

2.5 Billion Gallon Mandate By 2017 Scenario Assumptions 

(Change from Baseline Assumptions) 

x Biodiesel mandate increases by 300 million gallons beginning in calendar 2013 

reaching 2.5 billion gallons in calendar year 2017. The new mandate would 

include the 450 million gallons of the advanced mandate (300 million gallons of 

biodiesel) assumed in the baseline 

Analysis Methodology 

This analysis uses a system of global partial equilibrium models similar to those 

operated by FAO, OECD, USDA, and FAPRI. For this analysis the US crops and 

International Oilseed modules were used. These models are maintained in Microsoft 

ExcelTM which facilitates transparency. The analysis results represent a deterministic 

solution based on the assumptions outlined above. 
 Page 8 of 20 

The core agricultural modeling system used by the Agriculture group at IHS Global 

Insight is a set of structural partial equilibrium econometric models. The word partial 

refers to the fact that these models consider only the agriculture sector and not their 

impacts on the whole economy. Computable general equilibrium (CGE) models capture 

the whole economy but are usually not detailed enough to be useful for analysis of a 

particular sector such as agriculture. 

Partial equilibrium models require that all sources of supply and demand are included so 

our models use catch-all regions for the countries we do not explicitly break out. The 

models solve for a "global" price by equating global supply and demand. This global 

price is usually the price at the port in a country that exports a significant portion of world 

trade in the commodity and has relatively few trade barriers. This country is referred to 

as the residual supplier. All other prices are linked to this world price adjusting for trade 

policies, exchange rates and any relevant processing margins. The process of 

simultaneously solving for prices is initiated by initially assuming a level of exports for the 

residual supplying country which allows the model to solve for the "global" price. This 

global price is then translated through tariffs, exchange rates, processing margins, etc. 

to determine the local price in a particular country. Based on their local price, each 

country can then determine its domestic supply and demand. The difference between 

the supply and demand becomes the net trade position for the country. This net trade 

position is summed across all the countries to create a new export level for the residual 

supplier replacing the initial assumption. Of course this generates a new "global" price 

and restarts the cycle which continues until global supply and demand equilibrium is 

reached. The following diagram may be useful in better understanding the process: 

Assume an export path for the Residual 

Supplier

Residual Supplier 

Country Model

Residual Supplier Farm 

Price

World

Price

Recursive Country 

Model

Net trade positions

are summed across 

countries

Net exports needed 

become the Residual 

Supplier's export path

Exchange Rates

Trade Barriers

Local country's 

government policy

Residual Supplier 

government policy

Global Price Determination

Local Market Price Import Price

subject to quotas

Simultaneous Country 

Model

Net Import 

(might be negative)

Net Import 

(might be negative)

No Price Transmission Price Transmission
 Page 9 of 20 

Note that the diagram also includes a provision for those countries which operate with 

quota systems such that their internal prices have no relationship with the prices in the 

residual supplying country. This can be an issue for countries with binding tariff rate 

quotas. If this situation occurs for a particular country, prices in that country are solved 

for simultaneously given the domestic supply, demand, and exogenous trade (set at the 

binding tariff rate quota.) 

The IHS Global Insight agricultural modeling system consists of structural partial 

equilibrium models designed to replicate the structure of the market place and the 

manner in which data are collected on the market. The structure mimics a supply and 

utilization table with explicit econometric equations for each component of supply and 

demand. Typically supply is broken down into acreage, yield, production, imports, and 

beginning stocks. Demand is broken down into mill use, feed use, food use, industrial 

use, and ending stocks or some combination depending on the commodity. Each 

commodity is interrelated with other commodities that serve as compliments, substitutes, 

and/or inputs. The country model flow diagram below represents a typical country 

showing the interrelationships among the macroeconomic variables, crops, livestock and 

government policy. The top half of the diagram with the light red boxes refers to the 

meat sector, while the bottom half of the diagram with the light green boxes refers to the 

crops sector. The blue boxes refer to the key assumptions that drive the model. All 

forecasts are conditional upon the assumptions of income growth, population growth, 

trade and domestic support polices, input prices, and technology (i.e. yield growth). 

Per Capita Meat 

Consumption

Per Capita Crop 

Consumption

Per Capita Income Population

Feed Demand

Food Demand

Industrial Demand

Seed Demand

Exports

Ending Stocks

Ending Stocks

Exports

Domestic Meat 

Consumption

Meat Prices

Feed

Meat Production

Breeding Animals

Market Animals

Beginning Stocks

Imports

Crop Prices Production

Beginning Stocks

Imports

Area

Yield

Government Policy

Livestock Cost of 

Production

Crop Cost of 

Productions

Assumptions

Meat Variables

Crop Variables

Country Model Flow Diagram

Vet/Med

Electricity

Labor

Fuel

Interest

Land

Seed

Fertilizer

Chemicals Crude Oil Price
 Page 10 of 20 

Due to the complexity of the agricultural modeling system, the system is broken down 

into major components. The current IHS Global Insight system is outlined in the diagram 

below. Due to the number of commodities and countries included in our system, the 

models are broken up into specific parts that all interact with one another but help make 

the process more manageable. 

At present, the models reside mostly in Microsoft ExcelTM for ease of use and 

transparency for the model user. IHS Global Insight also utilizes SASTM for some of the 

models, particularly those targeted for stochastic analysis. The estimated equations are 

derived using ordinary least squares for the most part. More advanced techniques such 

as two-stage and three-stage least squares are occasionally employed, but issues such 

as simultaneous equation bias are very small if the ordinary least squares equations fit 

well. Synthetic equations are sometimes derived based on elasticities from other studies 

and are often useful where there are limited observations because of structural change 

in a market. 

The US biodiesel module of the US Agricultural model is set up as a partial equilibrium 

model with supply and demand equations and an endogenous biodiesel price. Central 

to the model's operation is the biodiesel processing margin which is calculated as the 

value of the biodiesel and glycerin produced less the cost of feedstocks and other 

variable inputs. The supply side of the model is made up capacity and capacity 

utilization equations. Capacity is function of margins realized over the past 4 years with 

most of the impact from margin two and three years prior to the current period. This 

Copyright © 2009 IHS Global Insight. All Rights Reserved.

Agricultural Models – An Integrated Approach

Int’l Feed Grains 

Corn including ethanol

Sorghum

Barley

Other Coarse Grains

Int’l Oilseeds

Soybeans, meal, oil 

Rapeseed, meal, oil

Sunflower, meal, oil

Palm oil

Biodiesel

Int’l Fibers

Cotton

Int’l Food Grains

Wheat

Rice

Int’l Livestock 

Cattle Inventory & Beef

Swine Inventory & Pork

Poultry Inventory & Broilers

Dairy Inventory

US Crops 

Corn

Sorghum

Barley

Oats

Wheat

Rice

Cotton

Soybeans, meal, oil

Sunflowers, meal, oil

Rapeseed, meal, oil 

Peanuts, meal, oil

Cottonseed, meal, oil

Ethanol

Biodiesel

Hay

Sugar

US Livestock 

Cattle Inventory & Beef

Swine Inventory & Pork

Poultry Inventory & Broilers

Dairy Cow Inventory 

Dairy Products

US Agricultural Inputs 

Ag prices paid indices

Cost of production

Fertilizer

Macroeconomic Inputs 

Prices paid indices, GDP, CPI, 

Population, and Exchange Rates

Agricultural Policy 

Domestic Policy 

Trade Policy

Int’l Sugar

Sugarcane 

Sugar Beets

Centrifugal Sugar Global Calorie 

Consumption Model

>70% of total global food 

calories explained through 

integration with existing 

models
 Page 11 of 20 

reflects the time lag in building a biodiesel plant. The capacity utilization equation 

estimates how much of current capacity is being utilized. It is highly sensitive to current 

margins with the industry. Practically, since the biodiesel industry has considerable 

capacity, the capacity utilization equation is the most important in the near term. By 

multiplying the capacity and capacity utilization equations the model estimates the 

amount of biodiesel produced. The demand for biodiesel is based on ratio of biodiesel 

price and the #2 diesel prices adjusted for the tax credit as well as biodiesel mandates. 

If biodiesel prices are above their energy content value, demand is determined by the 

mandate. Demand also has a small driver for use of biodiesel as an additive for its 

lubricity properties. Biodiesel prices are found through the balancing of supply and 

demand within the model. 

Scenario Results 

The baseline in this analysis is the most important result because it shows what the 

biodiesel industry can produce given current policy. In discussing the results, graphs will 

be presented with both the baseline and 2.5 billion gallon mandate by 2017 scenario. 

Essentially the only difference in the scenarios occurs in marketing year 2013 and 2014 

when the mandate is very slightly stronger than what the biodiesel industry would 

produce. While the scenario mandated level could be fine-tuned to exactly the possible 

level of production, policy tends to be set in round increments. A few references are 

made to the 2.5 billion gallon mandate by 2017 scenario in the following text, but the 

primary focus of the discussion is on the baseline. 

The baseline results for biodiesel and its implications for the US oilseed sector are 

presented in Tables 2 through 4. The baseline shows that given the assumptions, it is 

possible to reach 3.3 billion gallons of biodiesel by 2022 an increase of 2.5 billion gallons 

from projected 2010/11 marketing year levels. The feed stocks come from a variety 

sources in addition to soybean oil (see Figure 5). Nearly 80 percent of the increase is 

supply by soybean oil (31%) corn oil (22%) and palm fatty acid distillate (26%) Animal 

fats, yellow grease, and other grease supply another 16 percent of the total with the 

remaining 3 percent coming from rapeseed and palm oil. 

U.S. demand for biodiesel moves off of the mandate levels including the advanced 

mandate in marketing year 2013/14 when crude oil prices reach 86 dollars per barrel. 

As demand for biodiesel exceeds mandate levels, the price of biodiesel converges 

towards its energy value relative to #2 diesel. The biodiesel to diesel wholesale price 

ratio falls to 93 percent by 2022 compared with a historical average over the calendar 

year 2008 to 2009 period of 120 percent. 

Biodiesel plant returns over variable costs with soybean oil as a feedstock hover in the 

22 cents per gallon range consistent with a healthy industry just covering its fixed costs. 

(see Table 3). 

Soybean oil exports fall in the U.S. as exports increase from Argentina and Brazil with 

stronger than linear trend yield growth. Price pressure on soybean oil prices eases in 

2011/12 as global supplies are replenished. However, soybean oil prices do not return 

to 2009/10 levels as strong global demand supports prices (see Figure 6). Note that 

Figure 6 also show slightly stronger soybean oil prices under 2.5 billion gallon mandate 

by 2017 scenario. 
 Page 12 of 20 

Figure 5. Biodiesel Production by Feedstock Type 

Figure 6. U.S. Soybean Oil Price, Decatur, Illinois 
 Page 13 of 20 

In contrast, soybean prices do ease throughout the projection period despite increased 

crush demand (see Figure 7). Falling meal prices and a weaker soybean to corn price 

ratio (soybean yield growth outpaces corn yield growth) are primarily responsible for 

weaker soybean prices. Soybean acreage average 77.2 million acres over the 2011/12 

– 2022/23 period, with slightly stronger acreage at the beginning of the period and 

weaker acreage at the end of the period. Soybean exports remain relatively steady 

during the forecast ranging from a low of 1.43 billion bushels to a high of 1.6 billion 

bushels in 2022 (see Figure 8). 

Figure 7. US Soybean Prices 

Figure 8. US Soybean Exports 
 Page 14 of 20 

Table 6 presents the global vegetable oil food demand projected with the baseline 

scenario. Global demand for vegetable oils continues to grow rapidly through the 

projection period as developing economies respond to include growth and demand more 

protein in their diets. These demands are met primarily through yield growth in the 

United States, Brazil, and Argentina. 

Conclusions 

By using demonstrated yield technologies available to farmers today in combination with 

consistent biofuels policies and the DOE/EIS crude oil price forecast, biodiesel 

production can reach 3.3 billion gallons by 2022. This can be reached with growing 

global food demand for vegetable oils without dramatic increases in vegetable oil prices. 

A modest expansion of the biodiesel mandate to 2.5 billion gallons by 2017 would 

provide support for what the industry can deliver given known feedstocks. Biodiesel’s 

classification as an advanced biofuel makes it an attractive option for reducing 

greenhouse gases. 
 Page 15 of 20 

Table 2. US Biodiesel Supply and Demand, Baseline 

Marketing Year Beginning October 1 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

Production Capacity, Marketing Year Average 2240 2792 2792 2856 2900 2949 3055 3170 3270 3342 3359 3345 3326 3302 3277 3242

Supply (Million Gallons)

 Production 716 544 435 821 1,239 1,340 1,500 1,810 2,179 2,529 2,741 2,997 3,135 3,227 3,304 3,322

 Soybean Oil 433 276 224 395 605 624 685 828 1,005 1,135 1,187 1,261 1,270 1,218 1,236 1,179

 Corn Oil 0 0 87 129 149 185 212 240 266 328 393 459 526 602 637 683

 Canola Oil 84 50 35 54 66 68 75 90 109 124 129 137 138 133 135 128

 Other Feed Stocks 199 218 88 244 419 463 528 652 799 942 1,032 1,139 1,200 1,275 1,297 1,332

 Inedible tallow 21 23 7 25 83 142 200 259 317 317 317 317 317 317 317 317

 Yellow grease 15 19 36 40 48 56 64 71 79 79 79 79 79 79 79 79

 Other grease 34 25 22 30 38 46 54 62 70 70 70 70 70 70 70 70

 Lard 31 18 17 25 26 28 29 30 31 33 34 35 35 35 35 35

 Palm Oil 0 0 0 0 4 7 11 15 19 23 27 30 34 38 41 45

 Other 99 132 7 124 220 185 170 215 283 421 506 608 665 736 755 786

Domestic Disappearance 352 338 295 781 1,199 1,300 1,460 1,770 2,139 2,489 2,701 2,957 3,095 3,187 3,264 3,283

Net Exports 363 206 139 40 40 40 40 40 40 40 40 40 40 40 40 40

Total Disappearance 716 544 435 821 1,239 1,340 1,500 1,810 2,179 2,529 2,741 2,997 3,135 3,227 3,304 3,323

Crude Oil Prices (Dollars Per Barrel)

 Refiners Acquisition 99.61 70.90 70.22 80.12 83.17 86.08 90.10 93.96 98.08 102.92 108.02 113.03 118.03 122.93 127.58 130.02

Diesel Fuel Prices (Dollars Per Gallon)

 #2 Diesel Refiner Sales 3.13 1.73 2.12 2.57 2.71 2.81 2.94 3.06 3.19 3.35 3.52 3.68 3.84 3.99 4.14 4.21

 #2 Diesel Retail 3.88 2.52 2.89 3.26 3.40 3.51 3.66 3.79 3.94 4.11 4.29 4.45 4.62 4.77 4.92 4.99

Biodiesel Prices (Dollars Per Gallon)

 Biodiesel Plant 4.49 3.13 3.25 4.26 4.04 4.03 3.89 3.98 4.08 4.20 4.33 4.45 4.59 4.73 4.86 4.93

Price Ratio (Adjusted for Tax Credit)

 Biodiesel/Diesel Wholesale Price Ratio 111.4% 123.3% 106.3% 126.9% 112.4% 108.0% 98.5% 97.5% 96.4% 95.3% 94.7% 94.0% 93.6% 93.4% 93.3% 93.3%
 Page 16 of 20 

Table 3. US Biodiesel Processing Margins - Baseline 

Marketing Year Beginning October 1 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

Soybean Oil Feedstock

 Product Conversions

 Biodiesel (Lbs RDB Soy Oil Per Gal Biodiesel) 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5 7.5

 Glycerin (Lbs Glycerin Per Gal Biodiesel) 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9

 Gross Revenue (Dollars Per Gallon of Biodiesel)

 Biodiesel 4.49 3.13 3.25 4.26 4.04 4.03 3.89 3.98 4.08 4.20 4.33 4.45 4.59 4.73 4.86 4.93

 Glycerin 0.05 0.05 0.04 0.08 0.08 0.08 0.08 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07 0.07

 Total Gross Revenue 4.54 3.18 3.29 4.33 4.13 4.11 3.97 4.06 4.15 4.26 4.40 4.52 4.66 4.80 4.93 5.00

 Variable Expenses (Dollars Per Gallon of Biodiesel)

 Soybean Oil 4.26 2.63 2.94 3.93 3.60 3.59 3.46 3.52 3.60 3.72 3.86 3.98 4.10 4.27 4.38 4.44

 Other Operating Costs 0.30 0.31 0.31 0.31 0.31 0.31 0.32 0.32 0.32 0.33 0.33 0.33 0.33 0.34 0.34 0.34

 Total Variable Expenses 4.56 2.94 3.25 4.24 3.91 3.90 3.78 3.84 3.92 4.04 4.19 4.31 4.43 4.61 4.72 4.78

 Net Operating Margin -0.03 0.24 0.04 0.09 0.22 0.21 0.19 0.22 0.22 0.22 0.21 0.21 0.23 0.19 0.21 0.22
 Page 17 of 20 

Table 4. US Soybean Meal and Oil Supply, Demand, and Prices - Baseline 

Marketing Year Beginning October 1 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

Soybean Oil

 Prices (Cents Per Pound)

 Decatur, Crude 52.03 32.16 35.95 48.00 43.91 43.80 42.28 42.94 43.96 45.41 47.15 48.59 50.07 52.14 53.48 54.19

 Crushing Yield (Lbs Oil Per Lb Soybeans)

 Actual 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19 0.19

 Supply (Million Pounds)

 Beginning Stocks 3,085 2,485 2,742 3,358 2,640 2,207 2,256 2,375 2,365 2,347 2,303 2,248 2,213 2,159 2,094 2,056

 Production 20,580 18,746 19,615 18,966 19,469 20,585 21,530 22,433 23,075 23,756 24,005 24,216 24,457 24,333 24,716 24,868

 Imports 65 90 105 105 105 105 105 105 105 105 105 105 105 105 105 105

 Total Supply 23,730 21,321 22,462 22,429 22,213 22,898 23,891 24,914 25,545 26,209 26,413 26,569 26,775 26,597 26,915 27,029

 Domestic Disappearance

 Food Use 15,089 14,316 14,022 14,200 14,103 14,205 14,541 14,621 14,683 14,692 14,644 14,633 14,644 14,592 14,604 14,641

 Biodiesel Use 3,245 2,069 1,682 2,962 4,538 4,683 5,135 6,209 7,537 8,514 8,900 9,461 9,528 9,136 9,268 8,845

 Total Domestic Disappearance 18,335 16,385 15,704 17,162 18,641 18,889 19,675 20,829 22,220 23,206 23,544 24,094 24,171 23,727 23,872 23,486

 Exports 2,911 2,193 3,400 2,733 1,365 1,753 1,840 1,720 978 699 622 262 445 776 987 1,497

 Total Disappearance 21,246 18,578 19,104 19,895 20,006 20,642 21,516 22,549 23,198 23,906 24,166 24,356 24,616 24,503 24,859 24,983

 Ending Stocks 2,485 2,742 3,358 2,640 2,207 2,256 2,375 2,365 2,347 2,303 2,248 2,213 2,159 2,094 2,056 2,046

Soybean Gross Crushing Margin ($ Per Bushel) 1.13 0.80 1.15 0.82 0.85 1.21 1.22 1.22 1.16 1.13 1.18 1.24 1.32 1.21 1.41 1.40
 Page 18 of 20 

Table 5. US Soybean Supply, Demand, and Prices - Baseline 

Marketing Year Beginning September 1 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

Prices (Dollars Per Bushel)

 Marketing Year Average Price 10.10 9.97 9.59 11.83 10.81 10.18 9.86 9.46 9.24 9.23 9.19 9.14 9.07 9.07 9.00 9.00

 Central IL Processor Price 12.32 10.26 9.94 12.42 11.43 10.82 10.51 10.12 9.90 9.90 9.86 9.81 9.74 9.73 9.67 9.67

Soybean to Corn Price Ratio 2.40 2.46 2.59 2.28 2.31 2.24 2.19 2.22 2.21 2.20 2.20 2.16 2.15 2.14 2.13 2.12

Acreage (Million Acres)

 Planted Area 64.7 75.7 77.5 77.7 78.5 79.0 77.8 76.9 76.2 75.7 75.7 76.4 77.5 77.0 78.0 77.9

 Harvested Area 64.1 74.7 76.4 76.8 77.5 77.9 76.8 75.9 75.2 74.8 74.8 75.5 76.5 76.0 77.1 77.0

 Harvested Area % of Planted 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99% 99%

Yield (Bushels Per Acre) 41.7 39.7 44.0 43.9 44.2 45.3 46.5 47.7 48.5 49.3 49.7 50.1 50.5 50.9 51.2 51.6

Supply (Million Bushels) 1.13 0.80 1.15 0.82 0.85 1.21 1.22 1.22 1.16 1.13 1.18 1.24 1.32 1.21 1.41 1.40

 Beginning Stocks 574 205 138 151 161 168 180 185 196 201 203 201 198 205 200 205

 Production 2,677 2,967 3,359 3,375 3,426 3,531 3,572 3,620 3,650 3,688 3,716 3,780 3,864 3,869 3,949 3,977

 Imports 10 13 15 15 15 15 15 15 15 15 15 15 15 15 15 15

Total Supply 3,261 3,185 3,512 3,541 3,602 3,713 3,767 3,820 3,860 3,904 3,934 3,996 4,076 4,089 4,165 4,197

Domestic Disappearance

 Crush 1,803 1,662 1,752 1,665 1,739 1,839 1,923 2,004 2,061 2,122 2,144 2,163 2,185 2,174 2,208 2,221

 Seed & Residual 94 102 108 118 126 127 131 135 138 142 146 151 155 159 163 166

Total Domestic Disappearance 1,897 1,764 1,860 1,783 1,865 1,966 2,054 2,139 2,200 2,264 2,290 2,315 2,340 2,332 2,371 2,388

Exports 1,159 1,283 1,501 1,594 1,569 1,568 1,528 1,486 1,459 1,438 1,443 1,483 1,531 1,556 1,589 1,604

Total Disappearance 3,056 3,047 3,361 3,377 3,434 3,534 3,582 3,624 3,659 3,702 3,733 3,798 3,871 3,889 3,960 3,992

Ending Stocks 205 138 151 161 168 180 185 196 201 203 201 198 205 200 205 205
 Page 19 of 20 

Table 6. World Vegetable Oil Food Use* - Baseline 

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

 (1000 Metric Tons)

North America 11,505 10,895 10,934 11,215 11,435 11,591 11,817 11,975 12,096 12,215 12,310 12,427 12,550 12,648 12,775 12,919

 Canada 790 732 689 769 779 788 794 805 813 827 841 856 870 884 898 914

 Mexico 1,420 1,344 1,419 1,517 1,538 1,572 1,607 1,647 1,687 1,729 1,772 1,817 1,861 1,906 1,952 1,999

 United States 9,295 8,819 8,826 8,930 9,119 9,231 9,416 9,523 9,596 9,659 9,696 9,755 9,820 9,858 9,925 10,006

Central/South America 6,702 6,717 6,867 6,815 7,151 7,307 7,455 7,594 7,724 7,828 7,932 8,035 8,148 8,266 8,373 8,496

 Argentina 720 736 749 727 799 820 841 860 880 901 922 944 968 993 1,016 1,042

 Brazil 3,165 3,263 3,370 3,289 3,493 3,580 3,674 3,755 3,836 3,883 3,928 3,974 4,021 4,068 4,117 4,170

 Uruguay 33 34 32 31 35 37 37 38 38 39 39 40 40 41 41 42

 Paraguay 37 42 42 41 44 44 46 47 48 48 49 50 51 51 52 53

 Bolivia 77 77 77 82 85 88 91 93 96 98 100 103 105 107 110 112

 Other Latin America 2,670 2,565 2,597 2,646 2,696 2,738 2,767 2,801 2,826 2,858 2,893 2,925 2,963 3,006 3,038 3,077

Europe 10,479 10,681 10,814 10,493 10,937 11,030 11,120 11,218 11,306 11,398 11,489 11,577 11,668 11,759 11,841 11,929

 European Union 9,929 10,168 10,219 9,902 10,353 10,430 10,512 10,600 10,679 10,762 10,843 10,923 11,005 11,087 11,160 11,240

 Other Europe 550 513 595 591 584 600 608 619 627 636 646 654 663 672 681 689

FSU 3,270 3,372 3,353 3,383 3,528 3,628 3,680 3,751 3,804 3,863 3,921 3,978 4,032 4,085 4,138 4,193

 Russia 2,391 2,340 2,371 2,384 2,385 2,449 2,468 2,505 2,525 2,553 2,580 2,605 2,629 2,651 2,671 2,694

 Ukraine 501 505 342 460 589 611 629 646 662 677 692 707 721 736 752 768

 Other FSU 378 527 640 539 555 567 584 600 617 633 650 666 682 699 715 731

Africa 6,493 6,766 7,213 6,885 7,469 7,758 7,976 8,268 8,499 8,751 9,010 9,276 9,546 9,824 10,106 10,394

Middle East 3,593 3,600 3,752 4,034 4,062 4,132 4,208 4,316 4,424 4,537 4,653 4,766 4,879 4,997 5,111 5,216

Asia/Oceania 40,866 44,100 48,121 50,756 53,071 54,034 55,178 56,828 57,950 59,394 61,024 62,694 64,481 66,284 68,085 69,944

 China 13,232 13,679 15,327 16,818 18,505 18,801 19,132 19,717 19,912 20,385 20,929 21,500 22,159 22,818 23,501 24,223

 Indonesia 8,147 9,166 9,994 10,445 10,508 10,709 10,933 11,240 11,545 11,882 12,229 12,586 12,943 13,323 13,705 14,099

 India 7,313 9,181 9,962 10,587 10,797 11,054 11,388 11,787 12,105 12,412 12,824 13,254 13,714 14,157 14,595 15,044

 Japan 3,060 3,130 3,282 3,336 3,285 3,253 3,304 3,353 3,399 3,445 3,487 3,528 3,567 3,607 3,645 3,683

 Malaysia 1,776 1,784 1,841 1,902 1,937 1,976 2,012 2,058 2,101 2,146 2,190 2,233 2,273 2,311 2,347 2,383

 Other Asia/Oceania 6,819 6,599 7,088 7,013 7,406 7,601 7,761 8,017 8,215 8,433 8,658 8,868 9,085 9,313 9,520 9,725

World 69,582 72,161 75,669 77,794 81,661 83,531 85,355 87,602 89,168 91,006 92,990 95,016 97,191 99,339 101,500 103,752

*Includes Soybean Oil, Sunflower Oil, Rapeseed Oil, and Palm Oil. 
 Page 20 of 20 

References 

 

1

 U.S. Department of Energy, Energy Information Administration. December 16, 2010. 

Website: http://tonto.eia.doe.gov/forecasts/aeo/index.cfm

2

 U.S. Department of Energy, Energy Information Administration, February 8, 2011. 

Website: http://tonto.eia.doe.gov/steo/

3

 Presentation from Monsanto Yield Review Luncheon, November 8, 2010. 

4

 Presentation from Monsanto entitled, “Annual R&D Pipeline Review”, January 6, 2011.