With construction of one of the world's largest biodiesel plants underway in Indiana, the demand for Hoosier soybeans is about to change dramatically.

Louis Dreyfus Corp. announced in the spring it would build a soybean processing and biodiesel plant near Claypool, IN. Based on estimates of processing nearly 50 million bushels of soybeans and producing 80 million gallons of biodiesel each year, the plant is one of the largest in the world and the largest in the U.S.

By mid-June, earthwork and foundation construction had started at the 275-acre site.

By comparison, typical biodiesel plants produce 30-40 million gallons per year, says Mike Mandl, U.S. operations manager for Louis Dreyfus.

Of course, with rapid announcements of additional biodiesel plants across the county, another plant with greater capacity could be underway by the time it begins production in early 2008.

But the title doesn't change what the facility will mean for farmers in the region.

One of the reasons Indiana was selected as the site for the new plant was because of the availability of soybeans, Mandl says.

Here's some perspective on just how much of Indiana's soybean crop the Louis Dreyfus plant will need:

Indiana farmers grew 260 million bushels of soybeans last year. Six soybean crushing plants in Indiana have the capacity to process about 160 million bushels of soybeans per year. Add on Louis Dreyfus' demand for an additional 50 million bushels, and the conclusion is that most all of the beans grown in Indiana will stay in Indiana, based on an analysis by Chris Hurt, ag economist at Purdue University.

In past years, Indiana has been a surplus producer and shipped out about 100 million bushels a year, Hurt says.

“Now this really does change the dynamics within Indiana,” he says about the new plant being built.

He predicts plants may even compete to get soybean acres under production contracts within a few years. The farmers most affected will live within a 50-mile radius of the northern Indiana site.

“Many farmers are saying that biodiesel has already added value to the soybean crop throughout the years,” says Amber Thurlo Pearson, communications specialist with the National Biodiesel Board.

Hurt says farmers may change practices to raise yields, possibly by considering a better quality seed, pursuing more optimum farmland or more intense fertilization and spraying.

However, such changes could probably grow production less than 5% by improving yield per acre, Hurt says.

“This has to be a very exciting time for people who own land and for crop producers given the rapid growth in Indiana ethanol and now biodiesel,” Hurt says.

These plants will secure Indiana's role in the emerging biofuels industry.

Indiana had been behind in the entire biofuels industry with only one ethanol plant built in the summer of 2005, says Ken Klemme, assistant director for economic development at the Indiana Department of Agriculture.

Now, Indiana has 11 ethanol plants and three biodiesel plants announced or under construction.

The potential advantage for the agricultural community is the need to secure 50 million bushels of additional soybeans per year, says Mandl, who adds that the company would, naturally, want to buy soybeans that are grown close to the plant.