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Renewable Diesel Boom: The Impact of Soybean Crush Plants on Local Soybean Basis

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  • Shujie Wu
  • Mindy Mallory
  • Teresa Serra

Abstract

We investigate the impact of the policy-driven expansion of the diesel and renewable diesel industry on local soybean prices. Because soybean oil is a key feedstock for biodiesel and renewable diesel, significant investments have been made in new soybean crush facilities and the expansion of existing ones. We quantify the effect of both new and existing soybean plants on soybean basis using panel data and a differences-in-difference approach. The data available on new plants does not allow us to identify any statistically significant impacts. However, existing plants increase the basis by 23.36 to 9.20 cents per bushel, with the effect diminishing with distance. These results suggest the relevance of biofuel policies in supporting rural economies and have relevant policy implications.

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  • Shujie Wu & Mindy Mallory & Teresa Serra, 2025. "Renewable Diesel Boom: The Impact of Soybean Crush Plants on Local Soybean Basis," Papers 2504.01756, arXiv.org.
    • Handle: RePEc:arx:papers:2504.01756
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    References listed on IDEAS

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    1. Adjemian, Michael K. & Smith, Aaron & He, Wendi, 2021. "Estimating the market effect of a trade war: The case of soybean tariffs," Food Policy, Elsevier, vol. 105(C).
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