Photo: Runner1928 / Wikimedia Commons, CC BY-SA 4.0
Several new soybean crushing plants have opened or expanded in the Midwest in recent years, driven by demand for soybean oil from makers of renewable diesel.
Renewable diesel is a fuel chemically similar to petroleum diesel but made from vegetable oil or animal fat. Federal and California incentives have made it profitable.
For farmers, more crush capacity means more buyers nearby. Iowa has plants in cities like Cedar Rapids and Sergeant Bluff.
The market depends heavily on federal policy, including the Renewable Fuel Standard and the 45Z clean fuel production credit, and changes there can swing soybean prices.
Curt Hanneman writes for Clarion News Online.