Soybean Oil for Biofuels has Limited Food Price Impact - Study

A recent study found that soybean oil for biofuels has a limited impact on overall food prices, according to a World Grain report on December 22, 2022.  The United Soybean Board partnered with Purdue University on a food and fuel study to evaluate whether the increased used of soybean oil in biofuels has contributed to the rising retail prices of food products for consumers.
One key element missing from this equation is that only one-fifth of the soybean is oil.  Most of the soybean is meal used as high-quality protein in animal diets.  This expanded crush for oil to meet biofuel demand creates increased availability for meal, driving down the price of animal protein products and partially offsetting the growth of oil and bakery prices, leaving the overall ‘food at home’ portion of the Consumer Price Index (CPI) essentially unchanged.  The static nature of the CPI can be attributed to meat prices representing a large share of the CPI than fats and oils, World Grain wrote.
The study found that a 20% increase in the quantity of soybean oil demanded for use in biofuels generates the following price impact breakdown (all else equal):  1) 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. 2) 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. 3) Farm level soybean prices increased 0.73%, farm revenue for soybean producers increased 0.92% and overall crude soybean oil prices increased 8.17%.