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Iowa Ag Review

Abstract

Although the expanded corn ethanol and cellulosic biofuels mandates contained in the new Energy Independence and Security Act (EISA) have generated the most headlines, the act’s new biodiesel mandates may have a larger impact on U.S. agriculture over the next few years. Biodiesel use is now mandated to grow from 500 million gallons in 2009 to one billion gallons in 2012. U.S. biodiesel production was expected to decline significantly over the next few years because of low operating margins caused by high feedstock costs. The increased production due to the mandate will put upward pressure on already high vegetable oil prices, which in turn will further increase the cost of producing U.S. biodiesel.