NASHVILLE, Tenn. (RFD News) —U.S. soybean oil demand is expected to climb in 2026/27 as federal biofuel policy pushes biomass-based diesel production higher. USDA’s Economic Research Service says record Renewable Volume Obligations for 2026 and 2027 are expected to increase demand for biofuel feedstocks.
The 45Z tax credit also changes the feedstock picture. ERS says the credit now limits eligibility to fuel produced in the United States with feedstocks sourced from North America and removes indirect land-use change from carbon score calculations.
Soybean oil should benefit from that change. USDA forecasts soybean oil use for biomass-based diesel production at 17.8 billion pounds in 2026/27, up 3.6 billion pounds from 2025/26. Canola oil use is also expected to grow.
Renewable diesel capacity has expanded sharply, rising from 900 million gallons in January 2021 to 5 billion gallons in December 2025. That growth increases competition for vegetable oils, animal fats, and used cooking oil.
ERS projects Central Illinois soybean oil prices at 70 cents per pound, up from 63 cents.
Farm-Level Takeaway: Stronger biofuel policy support could lift soybean oil demand and help maintain crush margins in soybean markets.
Tony St. James, RFD News Markets Specialist
Dr. David Anderson with Texas A&M University AgriLife Extension discusses how geopolitical tensions and the Middle East, along with export disruptions in the Chinese market, will shape cattle markets in the months ahead.
March 12, 2026 12:54 PM
·
Refining shifts could influence fuel and input costs.
March 12, 2026 07:00 AM
·
Energy shifts influence diesel and fertilizer costs.
March 12, 2026 05:00 AM
·
OHFB President Bill Patterson shares an update from Washington on the group’s policy priorities and the issues shaping agriculture ahead of the 2026 planting season.
March 11, 2026 03:34 PM
·
NRECA CEO Jim Matheson warns that rising electricity demand from AI and data centers could strain the grid and affect rural electric cooperatives if U.S. power infrastructure cannot keep up.
March 11, 2026 11:59 AM
·
For producers, success this season will require more than just a clean field; it will require meticulous record-keeping, a proactive written mitigation plan, and a constant eye on both the forecast and the federal docket.
March 10, 2026 05:04 PM
·
