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ImpactofBiodieselDemandon
SoybeanMeal
Prices
NBB
Conference
February
8,
2012SharonBardandChrisSchroeder
Thanksto
the
National
Biodiesel
Board,
the
United
Soybean
Board,andU.S.DepartmentofEnergy(DEEE0003118)
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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theimpact
that
increased
demand
for
the increased demand for oil to supply biodiesel
pro uc on s pu ng ur er pressure on ves ocproducers by increasing feed cost
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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helpsto
increase
the
supply
of
and
reduce
the
.
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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demandfor
soybean
oil and
soybean
meal
demand
of
these
co
products W atresu ts sacont nuumo pr cesw ngs
thatareseeminglyunexplainedbyanysingle
actor
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Oil$
ValuePrice
Quantity
Meal
$
Processing
Margin
Value
Quantity
EPV$
Hulls$
Price
ValueofSoybeans=
Quantity
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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Oil$
$5.95$0.52/lb
11.45lbs
Meal
$
Processing
Margin
$7.57
44lbs
EPV$ $13.81
$0.67
Hulls$
$162/T
Valueof
Soybeans= $13.14=
.
3.6lbs
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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16.00
ProcessedValuevs.SoybeanPrices
14.00ComponentPrices
20
25
30
35
40
45
50
55
anOilPrice(centsperpound)
12.00
shel
Processed Value
ComponentYields
10
15
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Soybea
Marketing Year
7
47.6
47.8
48.0
48.2
Meal 10.6
10.8
11.0
11.2
11.4
11.6
11.8
12.0
PoundsofOil
8.00
10.00
$
perB
46.6
46.8
47.0
47.2
47.4
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Poundsof
Marketing Year
10.2
10.4
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Marketing Year
6.00
4.00
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10
MarketingYear
Source:USDAERSandAMSJanuary2012Update
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16.00
ProcessedValuevs.SoybeanPrices
14.00
20
25
30
35
40
45
50
55
anOilPrice(centsperpound)
ComponentPrices
12.00
shel
Processed Value
ComponentYields
10
15
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Soybea
Marketing Year
7
47.6
47.8
48.0
48.2
Meal 10.6
10.8
11.0
11.2
11.4
11.6
11.8
12.0
PoundsofOil
8.00
10.00
$
perB
46.6
46.8
47.0
47.2
47.4
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Poundsof
Marketing Year
10.2
10.4
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Marketing Year
6.00
ProcessingMargin
4.00
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10
Soybeans
MarketingYear
Source:USDAERSandAMSJanuary2012Update
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Soybean
Co
products:
Oil
and
MealOil
Production
Soybeans
Crush Meal
Production
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BasicEconomicsfor
SoybeanCo
products
NoChange
InDemandPrice
Basicruleofthumb:Whendemandforone
coproduct
increases,
thepriceoftheother
coproductdecreases,
witheverythingelseequal.
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UnitedSoybeanBoards
ValueChain
Analysis
VCA
Model
demandfactor
(e.g.,
increase
in
soybean
oil
demand ontheso beansector
inisolationofothereconomicsectors(suchascorn
sector)and
holdingothersupplyanddemandfactorsconstant.
Thishelpsusunderstandtheimpactofchangesin
soybeanoil
demand
on
oil
prices,
soybean
prices
andsupply,andmealpricesandsupply.
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SoybeanOilandMealPriceResponses
OilExample: Demand forso bean oil increases
$0.05/lb
by 10%
UtilizationPrice
Soybeans
CrushPrice Meal
.
$12.90/TSoybean mealdemand remains
ProductionPrice
constant
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HistoricalImpactofBiodieselDemand
onSoybean
Meal
Prices
productionstaying
constant
at
MY
2004
levels
0.0SoybeanOilPrice(cents/lb)
0.0SoybeanOilPrice(cents/lb)
0.00SoybeanPrice($/bu)
0.00SoybeanPrice($/bu)
(4.20)
(7.80) (6.80)(8.0)
(6.0)
(4.0)
(2.0)
Cen
ts/lb (4.20)
(7.80) (6.80)(8.0)
(6.0)
(4.0)
(2.0)
Cen
ts/lb (0.09)
(0.16) (0.13)(0.20)
(0.15)
(0.10)
(0.05)
$/bu
(0.09)
(0.16) (0.13)(0.20)
(0.15)
(0.10)
(0.05)
$/bu
60SoybeanMealPrice($/T)
60SoybeanMealPrice($/T)
(10.30)
(12.50)(14.0)
(12.0)
.
'05 '06 '07 '08 '09
MarketingYear
(10.30)
(12.50)(14.0)
(12.0)
.
'05 '06 '07 '08 '09
MarketingYear
(0.22)(0.27)
(0.30)
(0.25)
'05 '06 '07 '08 '09
MarketingYear
(0.22)(0.27)
(0.30)
(0.25)
'05 '06 '07 '08 '09
MarketingYear
16.22
40.10 48.31
30.66 27.6020304050
$/T
16.22
40.10 48.31
30.66 27.6020304050
$/T
010
'05 '06 '07 '08 '09
MarketingYear
010
'05 '06 '07 '08 '09
MarketingYear
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FutureImpactofReducingProduction
fromMandated
Amounts
futurebiodiesel
production
by
25%
of
(1.46)s)
ReducedOilDemand(BBlbs)(1.46)
s)
ReducedOilDemand(BBlbs)
(1.50)
(1.54)
(1.52)
(1.50)
.
nOilUse(BBlb
(1.50)
(1.54)
(1.52)
(1.50)
.
nOilUse(BBlb
(1.58) (1.58) (1.58) (1.58)(1.60)
(1.58)(1.56)
'11 '12 '13 '14 '15
Soybea
(1.58) (1.58) (1.58) (1.58)(1.60)
(1.58)(1.56)
'11 '12 '13 '14 '15
Soybea
MarketingYearMarketingYear
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FutureImpactofReducingProduction
fromMandated
Amounts
(9.2)
SoybeanOilPrice(cents/lb)(9.2)
SoybeanOilPrice(cents/lb)SoybeanPrice($/bu)SoybeanPrice($/bu)
(9.90)
(10.4)
(10.2)
(10.0)
(9.8)
(9.6)
(9.4)
Cents/lb
(9.90)
(10.4)
(10.2)
(10.0)
(9.8)
(9.6)
(9.4)
Cents/lb
(0.20)
(0.15)
(0.10)
(0.05)
.
$/bu
(0.20)
(0.15)
(0.10)
(0.05)
.
$/bu
(10.50) (10.60)
(10.70) (10.60)(11.0)
(10.8)
(10.6)
'11 '12 '13 '14 '15
MarketingYear
(10.50) (10.60)
(10.70) (10.60)(11.0)
(10.8)
(10.6)
'11 '12 '13 '14 '15
MarketingYear
.
(0.28) (0.31)(0.33) (0.33)
(0.35)
(0.30)
(0.25)
'11 '12 '13 '14 '15
MarketingYear
.
(0.28) (0.31)(0.33) (0.33)
(0.35)
(0.30)
(0.25)
'11 '12 '13 '14 '15
MarketingYear
36.7736.40
3737
SoybeanMealPrice($/T)36.77
36.403737
SoybeanMealPrice($/T)
35.50
35.1534.44
3434353536
$/T
35.50
35.1534.44
3434353536
$/T
33'11 '12 '13 '14 '15
MarketingYear
33'11 '12 '13 '14 '15
MarketingYear
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productionincreases
crush,
subsequently
,
leadingtohighersoybeanprices
,
loweringsoybeanmealprices
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Historicall theincreaseddemandforso beanoil
haslowered
soybean
meal
prices
by
$16
to
$48
pertonfromwheretheyotherwisewouldhavebeenforMY05throughMY09
Losingjust
aportion
of
the
demand
for
soybean
o n e u urecou
Lowersoybeanpricesrangingfrom21to33centsper
Increasesoybeanmealpricesrangingfrom$34toalmost$37perton
7/28/2019 Impact Biodiesel Demand Sbm Prices Bard ODLICNO
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,
thecapacity
to
produce
at
least
the
mandated
oildemandandhelptostabilizeandmoderate
.
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SharonBard [email protected]
ChrisSchroeder [email protected]
Thanksto
the
National
Biodiesel
Board,
the
United
Soybean
Board,andU.S.DepartmentofEnergy(DEEE0003118)