News

Biofuels policy changes can affect soybean prices

An extension ag economist says updates to federal biofuels policy could be bullish for U.S. soybean prices.

Ben Brown with the University of Missouri says Congress is considering updates and an extension to the 45z tax credit in the reconciliation package and if those changes provide more certainty for biofuel producers “it would encourage more use of vegetable oils, like soybean oil, for production.”

He says the ag and oil industries have also come to an agreement on updates to the renewable volume obligations in the Renewable Fuel Standard, which is expected to be announced in the next week to 10 days.

“I think these things are more intertwined than what’s happened in the past. The Trump administration’s EPA is trying to get both industries to at least talk about what’s possible and what a national biofuels policy could look like.”

He says anything that drives demand for U.S. soybean oil has a positive impact on price.