There was a lot of discussion on renewable fuels Wednesday at the Minnesota Ag Expo that was being held at the Verizon Wireless Center in Mankato. Minnesota corn growers were of course talking about ethanol. The ethanol industry is a mature industry thriving on the free market as there are no longer any subsidies for ethanol plants. There is a mandate in place but it really does not make any difference. That is because oil companies need the octane enhancer that is provided by ethanol. Ethanol is much cheaper than any other octane enhancer that the oil companies can develop.

Minnesota soybean growers were of course talking about biodiesel. The majority of biodiesel is made from soybean oil. A small portion comes from corn oil, animal fat and used cooking oil. I heard Wednesday that the soybean oil used for biodiesel adds 64 cents to the value of farmers soybeans. In other words, soybean prices would be 64 cents a bushel lower if we did not have the biodiesel industry.

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