USDA Predicts Biofuel to Consume Over Half of US Soybean Oil in 2025-26
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Lunes, 14 de julio de 2025
Biofuel Boom: Soybean Oil Powering Over Half U.S. Output
The USDA forecasts that biofuel producers will consume more than 50% of U.S. soybean oil next year—an unprecedented shift driven by strong federal blending mandates, clean-fuel tax incentives, and trade curbs. This shift raises questions for soybean crushers, export volumes, and the wider farm economy.
AgroLatam U.S. Editorial Team
AgroLatam U.S. is the U.S.-based editorial team of AgroLatam, covering U.S. agriculture and agribusiness, including markets, policy, trade, and technology, with a focus on links between the United States and Latin America.
Fuente: Agrolatam.com | Autor: AgroLatam.com
In the 2025-26 marketing year (starting October 1), biofuel producers are expected to consume a record 15.5 billion pounds of soybean oil—over half of total U.S. production, marking an 11.5% increase from last month's forecast and 26.5% above current use.
This surge reflects aggressive policy actions: the EPA recently raised biofuel blending mandates for 2026 and 2027, added stricter limits on imported renewable feedstocks, and the new 45Z clean-fuel tax credit (from the 2025 budget law) further incentivizes domestic processing.
Impact on Soybean Market
With so much domestic soybean oil diverted to fuel, export volumes are projected to collapse from 2.6 billion pounds to just 700 million pounds, shifting the U.S. from exporter to net domestic consumer in this segment.
The policy changes also drive a boom in soybean crushing, with USDA projecting record-level crush volumes exceeding 2.54 billion bushels—roughly 58% of total domestic disappearance, an 18-year high.
This has multiple implications:
- Crushers and co-ops will likely experience a boom, with plants running at full tilt or expanding to meet fuel-sector demand.
- Soybean farmers gain resilience; strong domestic oil demand may help soften the effects of slumping export markets, especially with China purchases still sluggish.
- Futures markets show response, with Chicago soybean-oil contracts rallying toward 7½-month highs on mounting biofuel optimism.
However, uncertainties remain:
- Biofuel policy debates continue in Washington.
- If future blending mandates falter, processors could face pressure, as seen earlier this summer when ADM pulled back bids on new crop soybeans amid crush-margin concerns.