As biofuel use grows, demand for the raw materials used as feedstocks in biofuel production also is on the rise. Increasingly, the U.S. turns to foreign suppliers to source those feedstocks (soybean oil, canola oil, corn oil, tallow and used cooking oil).
Demand for feedstocks used to make the biofuels classified as biomass-based diesel, which includes biodiesel and renewable diesel, has doubled in the last two years, reaching 37.2 billion pounds in the 2023-24 marketing year.
Biomass-based diesel feedstocks include vegetable oils, animal fats and used cooking oil. The strong U.S. demand for feedstocks lifted domestic vegetable oil and animal fats prices above world prices from 2020-21 through 2022-23, and prices stayed elevated in 2023-24.
High U.S. feedstock prices, a strong dollar and construction of renewable diesel facilities at ports all have contributed to increased feedstock imports. U.S. imports of used cooking oil, tallow and canola oil have increased from major exporters of the different types of feedstock. The share of feedstocks exported from other countries to the U.S. increased from 13% in 2020-21 to 29% in 2023-24. Major exporters’ trade increased 14% while exporter supply has only grown by 7% in this period. — USDA Economic Research Service
