Biodiesel Margins Continue to Edge Lower Heading into New Year

Biodiesel Margins are backsliding into the end of the year after showing a strong push higher early in the fourth quarter of 2021. Margins are doing little to incentivize production at this point, despite a strong improvement from numbers seen back in the spring and summer.  Soybean oil is the biodiesel industry’s most used feedstock, accounting for 51 % of the feedstock used during September; below soybean oil based biodiesel margins are shown for the past five years.

Vertically integrated producers are enjoying somewhat better margins due to crush operations that allow the processing of soybean oil and provide a good value for crushing beans. Stand-alone biodiesel plants may be struggling and need to see margins further above total projected costs before there is adequate incentive to operate.

Most plants cannot have pick and choose when to operate, given contracts in place…