Soy costs are keeping production down. Article here.
NBB: Biodiesel Production Nowhere Near Capacity Yet
USAgNet - 12/28/2007
The biodiesel industry is currently producing at less than one quarter
capacity, due mostly to underutilization by petroleum blenders and
continuing high vegetable oil and fat prices. As of September 2007, the
National Biodiesel Board reports that America's biodiesel industry had
1.85 billion gallons per year capacity. However, according to Amber
Thurlo Pearson, NBB communications specialist, this capacity is not
being utilized by the petroleum industry.
Soybean oil
prices in the mid- to high 40-cent range is one of the biggest
contributors to tight margins and biodiesel production cutbacks. Recent
passage of the Energy Independence and Security Act of 2007, however,
expands the Renewable Fuels Standard (RFS), which will require 500
million gallons of biodiesel to be used or blended in 2009.
In
2007, the United States produced 400 million gallons of biodiesel, or
about 22 percent of production capacity. The year before, the industry
had a production capacity of 580 million gallons and sold 250 million
gallons, or 43 percent of capacity.
Pearson points out
that many biodiesel producers build plants larger than what they will
initially produce to make it more economically feasible to expand
production in the future. It will be difficult to predict the cost of a
barrel of oil and the cost of production of biodiesel, says Pearson,
but the industry anticipates continued growth throughout 2008.
