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Renewable diesel’s impact on global food supply chain

An ag economist says an increase in renewable diesel demand could disrupt the global food supply chain.

AgResource Company President Dan Basse says a rise in new renewable diesel production facilities will boost competition for soybean oil.

“This is done by incentives from California, Oregon, and Washington,” he said. “Today, they are offering about a $4 per gallon incentive to produce renewable diesel. This is why these plants are coming on so quickly.”

He tells Brownfield an additional 9 million acres of soybeans would be needed in the US by 2025 to help offset demand, but…

“I can’t find the extra acres unless it comes out of the CRP program,” Basse said. “We at AgResource believe we’ve reached peak farmland already in the United States, meaning that now that we’ve stolen 25 million acres from CRP and hay, there’s just not extra acres to come by.”

Basse says the need for more processing capacity is another concern.