Sitting in the shadow of the proposed biodiesel plant, area farmers could see the price of their soybeans rise and the cost of soybean meal fall, according to Mike Yoder, Elkhart County Commissioner and member of the Indiana Soybean Board.
"This is great news," Yoder said of the announcement Wednesday of Louis Dreyfus Agriculture Industries' plans to build the world's largest biodiesel plant near Claypool in Kosciusko County. "There's a growing market there. Soybean biodiesel can be used in any diesel engine."
In a press release, the Indiana Soybean Board said the Dreyfus plant would produce up to 250,000 gallons of biodiesel per day, or more than 80 million gallons per year.
Consequently, this will increase the demand for soybeans which, Yoder predicted, could raise the price per bushel by 10 or 11 cents.
The facility will extract the oil from the soybeans and process the plants into protein-rich soybean meal. The oil will be sent to a soybean biodiesel blending terminal, where it will be combined with diesel fuel. Of the 12 such terminals in the United States, four are in Indiana.
The meal can be used as food for livestock and poultry. With the facility expected to produce 1 million tons of soybean meal annually, Yoder said farmers could see the price of the feed decline.
Moreover, as federal government imposes regulations that limit the amount of sulfur added to diesel fuel, soybean biodiesel is becoming an attractive alternative because, Yoder explained, it is a lubricant, like sulfur, and therefore can serve the same function in the engine as sulfur. Biodiesel fuel also burns a little cleaner and can reduce an vehicle's emissions into the air.
In addition to the Claypool location, two other biodiesels plants are being built in Indiana, one in Morristown by Integrity Biofuels and another in Hammond by Evergreen Renewables. However, the Morristown and Hammond plants will only extract the oil from the soybeans. Claypool will be a soybean processing facility as well as a biodiesel production facility, both extracting the oil and processing the soybeans into meal.
The Hoosier state is the third-largest producer of soybeans in the nation with 28,000 soybean farmers in Indiana. A total of 5.4 million acres of soybeans are grown in Indiana, which produces 203 million bushels each year.