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Food vs. fuel or food AND fuel for soybean products?

Can the soybean industry provide food and fuel to the market without compromising?

Part two in a three-part series on the soybean market.

The food vs. fuel debate that may have helped lead to lower corn and soybean prices after the markets for those commodities hit record highs in 2011 and 2012.

Environmental activists said processors shouldn’t be turning corn into ethanol and soy and other vegetable oils into biodiesel at the expense of food uses for those ingredients when people were going hungry in some parts of the world.

The debate has surfaced again with 2021’s higher prices for soybeans and corn, but Mac Marshall, vice president for market intelligence with the United Soybean Board and the U.S. Soybean Export Council, believes the arguments are misplaced.

“We think back 15 years when ethanol first hit the scene in a big way in the U.S. There was a lot of talk about food vs. fuel, which I think was a misunderstood dynamic at the time, and we’re starting to see that pop up a little more now in the veg oil space,” said Marshall, in an interview with Delta Farm Press.

“And I think that’s also a bit of a misconception. From a soybean standpoint we’re producing the oil that is going into the biofuel channels and, ideally, will help better position us as a country for increased biobased solutions and energy diversification, which, of course, is a very pivotal challenge that we have now.”

Well positioned

The other issue Marshall thinks soybeans are well positioned to tackle is the ongoing challenge of combating global food insecurity because of the role soybean meal can play in addressing those.

“Where we are now is incredibly exciting because we’ve got the bean oil piece that goes into this biofuel space, and it's creating this reduced cost of soy meal,” he said. “And, even with this surge from energy, animal agriculture still remains the number one consumer of U.S. soy products.

See Part 1: Renewable energy demand pushing soy oil to the forefront

“With that meal getting cheaper we think that helps contribute to some degree of combating food insecurity through declining feed costs as they go into animal rations. So the way I see it, it’s not food vs. fuel – it’s food and fuel, and that we're meeting those twin needs.”

Going back to ethanol, he said, one of the things farmers understand but maybe the general public doesn’t, is that when you're talking 5 billion bushels of corn going into ethanol refineries, critics say a third of the crop is being used for fuel.

“But when you run it through an ethanol plant a third of that volume is coming back in the form of dried distillers’ grains,” he noted. “And what do you do with that? You use it for animal agriculture. So it wasn't food versus fuel then either. It was a new utilization channel, but it was also creating this off-take that creates another source of protein in the animal ag space.”

The feedstocks are different, he noted, but “thematically, there are some similarities in terms of it being not an either-or situation.

See Part 3: South American crop will pressure U.S. soybean, oil prices

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