A recent study found that using soybean oil for biofuels has a limited impact on overall food prices, World-Grain.com reports.
The United Soybean Board partnered with Purdue University on a Food and Fuel study to evaluate whether the increased use of soybean oil in biofuels has contributed to the rising retail prices of food products for consumers.
According to a study prepared for the United Soybean Board, only one-fifth of a soybean is oil; the bulk is used as a high-quality protein in animal feeds. This greater demand for oil to fulfill the need for biofuels increases the supply of meal, and therefore lowers the cost of raising animals to produce animal protein, the study found.
This partially offsets the growth of oil and bakery prices, leaving the overall “food at home” portion of the Consumer Price Index (CPI) essentially unchanged. This can be attributed to meat prices representing a larger share of the CPI than fats and oils, the study said.
“The economic model we created links the farm supply of soybeans to retail demand for various food products. What we found, after assessing the impact of rising soybean oil demand on prices at the grocery store, was little change to the CPI,” said Jayson Lusk, food and agricultural economist at Purdue University. “While the increased demand for biofuels pushed up retail prices for oil between 0.16% and 4.41% across different categories, retail animal product prices for dairy, beef, pork, chicken and eggs declined between -0.01% and -0.16%.”
The following price impact breakdown results from a 20% increase in the amount of soybean oil required for use in biofuels (all other things being equal):
- Soybean oil increase of 0.16% in retail price for frying and baking, 0.82% in retail margarine price, 4.41% in salad/cooking oil and 0.16% in other oil-containing food items.
- Animal protein decrease of 0.16% in retail egg prices, 0.13% in retail chicken prices, 0.06% in retail pork prices, 0.02% in retail dairy prices and 0.01% in retail beef prices.
- Additionally, farm-level soybean prices increased 0.73%, farm revenue for soybean producers increased 0.92% and overall crude soybean oil prices increased 8.17%.
Overall, the study confirmed that the impacts of increased demand for soy-based biofuels on the Consumer Price Index are mixed, but the reductions in meat, dairy and egg prices partially offset the increases in oil and bakery prices, leaving the overall food at-home-portion of the Consumer Price Index essentially unchanged.
Gene-edited soybeans could further help in this segment
In September 2022, BioNews reported that BIO Member Benson Hill, a pioneer in CRISPR gene-editing technology, revealed its partnership with global nutrition specialist ADM for manufacturing Ultra-High Protein (UHP) soybeans.
Benson Hill argued that “this innovation enables food companies to eliminate costly energy and water-intensive processing steps across the consumer food, animal feed and aquaculture markets.”
“Ultra-High Protein varieties were developed through traditional breeding, allowing non-GMO certification and unrestricted use in U.S. and export markets, including Europe,” Benson Hill said.