AMES, Iowa – The potential growth in renewable diesel is translating into growth in soymeal supplies and likely lower feed costs for livestock producers, according to Chad Hart, Iowa State University professor of economics.

“Soymeal has always been a strong protein source for livestock,” he said. “The lower costs should also stimulate increased exports of soymeal. Currently, roughly 25 percent of our soymeal is exported to other countries as livestock feed.”

Scott Gerlt, American Soybean Association chief economist, agreed, saying soybean meal is an important source of protein in U.S. feed rations and around the world.

“The largest consumers of the meal are poultry and hogs,” he said. “The U.S. consumes about 75 percent of the domestic soybean meal production, with the rest being exported.”

Grant Kimberley, Iowa Soybean Association senior director of market development and Iowa Biodiesel Board executive director, said U.S. soy is well-positioned to continue delivering a quality, high-protein feed source for livestock in light of rising global food prices impacting operational budgets for many producers.

“In fact, global animal agriculture is the No. 1 consumer of U.S. soybeans,” he said. “Producers rely on high-quality feed to nourish animals like chickens, pigs, turkeys, cattle and fish that depend on nutrient-dense soybean meal, (which) contains the necessary levels of quality protein that are digestible energy for livestock to grow.”

Gerlt said U.S. soybean meal production is likely to grow over the next several years as announced plans for new and expanding crush plants total over a 25 percent increase in domestic capacity.

“The rise of renewable diesel, which is distinct from biodiesel, is creating new long-run demand for soybean oil,” he said. “The crushing plants are being built in response to the new demand. While some of this expansion can be utilized in domestic feed rations, it is widely expected that much of it will be exported.

“The industry is examining the infrastructure requirements to handle more soybean meal shipments,” he added.

Kimberley said U.S. meat and poultry consumption is expected to increase less than 1 percent per year through 2023, but more significant gains are projected in other parts of the world.

“Most notably, nations in Africa and the Middle East are forecast to register the fastest increases in meat consumption, as rising living standards and income levels allow more people to consume more meat in their regular diets,” he said.

Among the best uses for the byproduct, Gerlt said, “Soybean meal and soybean oil are co-products. Food use for soybean oil continues to be the largest consumption category. However, biofuel use of soybean oil has been rapidly growing with growth in the renewable diesel industry.

“Unlike biodiesel, renewable diesel can be used as a drop-in diesel fuel as it has the same chemistry as petroleum-based fuels,” he said. “Renewable diesel is mostly consumed in California due to their policy incentives.

“Use for this product is expected to grow over the next several years, while food use of soybean oil is expected to remain fairly constant,” he added. “Additional soybean meal consumption is expected to be largely exported to places such as Southeast Asia and Central America.”

Kimberley said among the best uses are in animal agriculture and biomass-based fuels growth.

“U.S. soybean meal doesn’t just feed livestock and help them thrive; it helps producers remain profitable,” he said. “Results from a study funded by the Soy Checkoff confirms the positive relationship between soybean meal, and improved total weight gain and feed use efficiency in growing pigs.

“With soybean meal primarily servicing the nutritional needs of livestock, soybean oil continues to see rapid growth and a promising player in the renewable fuels industry – particularly for use in biodiesel and renewable diesel,” he added.

Historically hovering at 30 percent, he said, “The value of a bushel of soybeans is now almost 50 percent due to the value of soybean oil.”

On Sept. 12, the Biden administration launched “a national biotechnology and biomanufacturing initiative that contains many provisions important to American soybean farmers, including actions that will support improved markets for biobased products, create greater access to biotechnology, and encourage research and development supporting the ‘bioeconomy,’ or economic activity derived from biotechnology and biomanufacturing.”