U.S. biofuel makers will consume more than half of all soybean oil produced in the U.S. next year. A recent flurry of federal policy moves has transformed the sector, including higher blending mandates and curbs on foreign biofuel imports and feedstocks, according to the U.S. Department of Agriculture.
In a monthly supply-and-demand report, the USDA sharply raised its outlook for soybean oil use by biofuel producers in the 2025/26 marketing year, which begins October 1, to a record 15.5 billion pounds, up 11.5% from its forecast a month ago and 26.5% higher than the current marketing year.
U.S. soy oil exports were seen tumbling to 700 million pounds in 2025/26 as more oil is consumed domestically, down from 2.6 billion pounds in the current season.
The U.S. Environmental Protection Agency last month proposed to increase the amount of biofuels that oil refiners must blend into the nation’s fuel mix in 2026 and 2027, driven by a surge in biomass-based diesel mandates, along with measures to discourage biofuel imports.
The moves were welcomed by the nation’s fast-growing biofuels industry after months of policy uncertainty that had hobbled output of fuels made from vegetable oils, like soy oil, canola oil and used cooking oil.
Under the Renewable Fuel Standard, refiners are required to blend large volumes of biofuels into the U.S. fuel supply or purchase credits known as Renewable Identification Numbers (RINs) from those that do.
EPA not only significantly raised the mandates but also proposed to reduce the number of RINs generated for imported renewable fuels and renewable fuels produced from foreign feedstocks starting in 2026, which increases demand for domestically produced feedstocks like soybean oil.
Additional incentives via state biofuel mandates and the federal 45Z clean fuel production tax credit in U.S. President Donald Trump’s recently enacted budget law further fueled the outlook for soy oil use in biofuel.
EDITOR’S TAKE:
This would be fabulous news even if the amounts were half of the forecast. At the forecasted level of 26.5% higher than the current year the demand for soybean oil is off the charts! The news should predictably push soybean prices higher and put more money back into the ag economy. When that occurs, truck sales typically increase as well. Do you have soybean growers in your area? If so, you should be sure to let them know that you are a CAD member and your people are trained specifically to deal with ag customers. In addition, be sure your inventory is up-to-date on AgTruckTrader.com®.
