‘Diesel from Donut’ – New biofuel fuel plants will inspire the American food industry

Updates on agricultural products

In search of low-carbon engine fuel, a low-cost supply chain is pitting food companies against the energy industry.

Fuel refineries, including marathon petroleum and Exxon mobile, are adding “renewable fuel” to the product in response to pure fuel incentives. The raw materials are usually edible oils derived from plant or animal fats.

The pressure has prompted food companies to cope with the record price for most cooking oils this year. But the energy sector is fueling the demand for food in the vegetable oil market, with analysts and official announcements from refineries.

“We support renewable energy and the green agenda, but soybean oil [prices] They have tripled. For his part, Rob Mackie, chief executive of the American Bakeries Association, feared that our members might not be able to buy any oil. The business group, which includes Krispy Kreme, Bimbo Bkeries USA and Pepperidge Farm, recently met with officials at the U.S. Environmental Protection Agency to initiate federal missions for biofuels.

Food groups have long opposed biofuel targets in the United States, especially in the wake of the high-stakes obligations of corn ethanol in 2007.

“Food and fuel have become a source of competition for that oil,” said David Widmar, an agricultural economist and consultant in the Food and Agriculture Clubs.

According to the Department of Agriculture, Joa Ridley / Getty said 11.5 billion pounds of soybean oil will be used in the United States this year to produce biofuel.

The U.S. Department of Agriculture estimates that the price of soybean oil is an average of 65 cents a pound this year, more than double what it was two years ago. Crespie Cream, a donut company based in New York, last month raised prices, citing “high commodity prices, especially from edible oils.”

“I believe that commodity pressure is very unusual in the short term,” financial analyst Josh Charlesworth told analysts.

Tensions are high in the United States, where federal policy and low-carbon fuels are investing heavily in renewable energy.

According to USDA estimates, the total 11. 11.5bn spent on biofuel production in the United States will be completed this year.

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The US Energy Information Agency predicts that renewable energy production will reach 5.1 billion gallons a year by 2024. Although the petroleum refinery is part one, by the end of 2020 it will be over 600m gallons.

A.D. By 2028, the US renewable diesel and biodiesel industry will need about 30 billion pounds of food warehouses, including Soviet oil, canola oil, processed cooking oil and lubricants, according to retailer StoneX.

Oil companies have flooded into renewable fuel markets over the past two years. Last month, ExxonMobil proposed renewable diesel investment in Canada. Independent oil refineries Marathon, Philips 66 and Holly Frontier are also monitoring projects.

Some oil companies include agricultural processing on their property. Marathon and archer Daniel Midland are working together to crush soybeans on a farm in North Dakota and are exporting soybean oil to the new marathon. Last week, Chevron plans to invest $ 600 million with Bung, the world’s largest oilseeds project, to create what the two companies call a “reliable supply chain from the farmer to the gas station.”

US oil producer Chevron plans a $ 600 million soybean partnership with Bungen © Kyle Grilllot / Bloomberg.

Finnish-based US President Jeremy Baines says the world’s largest biodegradable refinery will increase demand for fuel from airlines and road transport. “My expectation is that we will continue to see the need for renewable fuels, both in the sky and on the roads,” he said.

However, there is some evidence that the increase in fodder prices has at least temporarily reduced renewable energy.

David Lamp, chief executive of CVR Energy, an American refinery controlled by investor Carl Ican, said last month that the company had paused a “new” increase in livestock prices for a new renewable oil project in Oklahoma. A couple of new plants in the United States.

Demonstrating biofuels to stimulate demand for edible oils for the US Biodiesel and Renewable Diesel.

Skyrocketing vegetable oil prices are also having a global impact, with robobank analyst Michael Magdovit, who recently reduced Brazil and Argentina’s bid for biodiesel and jeopardizing Indonesia’s plans to merge.

In the future, biofuel demand in the United States could mean that the country’s trade flows could change in the future, said Arlan Suderman, an economist at Dton X. “The United States will be a net importer more than a net exporter,” he added.

He acknowledged that the growth in biofuel production is affecting agricultural markets. “Will there be a short-term pricing effect? Yes, it does exist, just as it did in the world of petroleum. But I think one of the benefits of renewal is that it is becoming a long-term business. ”

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The long-term view has given MacKie some comfort in the American Cakes Association. Members say they are being told by suppliers that they may be facing shortages of annual vegetable oil.

“It gets worse before it improves. We have some members who are very worried, He said. “Let’s just let farmers grow more beans.”

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