Biodiesel production provides an often overlooked benefit to poultry and livestock farmers – savings on soybean meal to feed their animals. Animal producers look for the best feeds at the most competitive prices, and biodiesel helps keep the cost of high-quality soybean meal competitive.
As biodiesel demand rises, so does the demand for soybean oil. The added demand increases soybean crush volume, which puts more soybean meal on the market. With more meal supply comes lower prices.
“When soybean oil demand is higher, there is going to be more meal available,” says Walter Godwin, a Pelham, Georgia farmer who raises both chickens and soybeans. “That extra crush affects soybean meal prices and makes an impact on the input costs to my chickens.”
In fact, between 2005 and 2009, soybean meal prices were as much as $48 a ton lower than they would have been without biodiesel, according to a soy-checkoff-funded study.
Godwin, a farmer-leader on the United Soybean Board, raises more than 45,000 breeder chickens as part of an integrated operation. He says he emphasizes the quality of U.S. soybean meal as a protein source whenever the facility managers chooses feed rations for his chickens.
“The people mixing feed rations look for the best nutrients and protein but can only use what is affordable,” explains Godwin. “Because biodiesel brings more soybean crush to the table, the meal is kept more competitive, and animal ag producers have a better opportunity to benefit from soybean meal’s quality.”
Operating near a biodiesel plant isn’t necessary to take advantage of the benefits the industry provides poultry and livestock farmers. Biodiesel’s demand for soybean oil impacts the entire soybean meal market.
“I benefit from lower meal costs as a chicken farmer,” Godwin adds. “Animal ag producers are getting value from the biodiesel industry, regardless of where they live or whether they also grow soybeans or not.”
The fats from processed poultry and livestock can also be used to make biodiesel, boosting their value. Between 2007 and 2012, the prices of poultry fats, lards and beef tallows more than doubled. This provides even more value for poultry and livestock farmers.