Study Shows Soybean Oil for Biofuels has Limited Impact on Food Prices


Retail food prices for consumers are increasing, and the price of vegetable oils is on everyone’s mind. With a growing share of soybean oil used for biofuel production, the United Soybean Board recently partnered with Purdue University economist Jayson Lusk on a study addressing this. It found that increased biofuel production has limited impact on overall food prices.

“It does push up the price of food items that contain oil, so salad dressing and vegetable oils, but maybe counterintuitively, it pushes down the price of animal products, so dairy, beef, pork chicken, because you get more meal when you get more oil, and that larger supply of meal helps push down the price of that input for animal products.”

For soybean farmers, he says the good news is increased demand.

“It pulls up soybean prices, increases revenue for soybean producers, but it does have these countervailing effects for consumers, and I think that’s really the motivation of this study is the old food versus fuel debate. I think maybe the highlight of this study is it’s not food or fuel, but you can actually get food and fuel from this because when there’s increased demand for the oil, part of that goes into the fuel. You also get this increased supply of meal, which helps make some of the meat and animal products more affordable for consumers.”

Lusk says this study is important because it helps inform the conversation regarding what is driving increases in food prices.

“I think this study sort of helps inform retailers and grocers that, while it does have some small influences on retail food prices, the overall impact when you add animal products in with oil containing food products is that it sort of has a net neutral impact in that CPI.”

The CPI being the Consumer Price Index that’s published by U.S. Bureau of Labor Statistics. Keep up with the latest news from the United Soybean Board at and Wednesday mornings at 10 a.m. Eastern / 9 a.m. Central on RFD-TV.