Industrial Agricultural Products Center
Date of this Version
7-24-2006
Abstract
Is the production of biodiesel feasible in Nebraska? A standard answer depends on the business operating condition. More specifically, a statewide, as opposed to a site specific, study conducted by the Independent Biodiesel Feasibility Group (IBFG) in July 2005 for the Nebraska Soybean Association (NSA) concluded a positive return on equity could be expected. At that time, the return was estimated to be poor for the small scale, 5 million gallons per year (MGPY) scenario analyzed and only modest for the mid, 15 MGPY, and larger scale, 30 MGPY scenarios. For a complete copy of the feasibility study, contact the Nebraska Soybean Association (NSA) office.
Many factors have changed since July 2005 though, most notably the continued escalation of petroleum fuel prices, the tremendous growth in the renewable fuels industry, the increased time/cost to build plants, and the government support for renewable fuels. This report provides a summary of activities and findings for the specified objectives of the project and an update to the July 2005 study, based on further evaluations by the project development team, recent industry developments and reports that address key issues such as:
• an updated outlook for soybeans, soybean meal, and soybean oil production, ProExporter Network report (PRX Grain Database, section C soybeans);
• an updated outlook for soybean oil markets, Promar International report; and
• an updated outlook for petroleum prices, US Department of Energy EIA-AEO report.
The issues addressed include: biodiesel demand, biodiesel market price, estimated biodiesel production costs, competition in the biodiesel industry, availability of feedstock resources, and government incentives and public policy.
Comments
Submitted to the Nebraska Soybean Association Board of Directors July24, 2006.