ABSTRACT:
This study examines the economic impact of using soybean oil as a diesel fuel (soydiesel) on the U.S. and world soybean, soymeal, and soyoil markets. Also considered are the collateral impacts on other meal and oil markets as well as on the corn market. Two different scenarios of increased soyoil demand in the U.S. for soydiesel use are quantitatively analyzed using a simultaneous equation international soybean and product trade model. The results indicate that even with the highest level of assumed use of soyoil to produce soydiesel, price increases for soyoil and soybeans are small due primarily to domestic supply increases and the response of foreign producers and consumers to the U.S. and world price increase.