1. Slide 1 Economics of Biodiesel and the Impact on Commodities Allan Gray, Purdue University Center for Food and Agricultural Business

2. Slide 2 Some Basic Figures n Biodiesel used as fuel extender and lubricant n 73% of Biodiesel made from Soybean Oil n 1 bushel of SB = 1.49 gallons of biodiesel –1 gallon of soyoil = 1 gallon of biodiesel –Soyoil = $1.50 to $2.10/gal. n 1 bushel of corn = 2.7 gallons of ethanol –$2/bu. = $0.74/gal. - $3/bu. = $1.11/gal. n Crude Oil –Oil $70/brl. = $1.67/gal. - $50/brl. = $1.19/gal.

3. Slide 3 Some Basic Figures n Subsidies –$1.00/gal. for Biodiesel = $1.50 per bushel –$0.52/gal. for Corn = $1.40 per bushel n Co-Products –Biodiesel – Glycerine –0.89 lbs. per gallon worth about $0.18/lb. and declining

4. Slide 4 Annual Distillate Consumption

5. Slide 5 U.S. Biodiesel Production

6. Slide 6

7. Slide 7 Alternative Feedstocks

8. Slide 8 Projected U.S. Soybean Oil Demand and Production Largest Production Year on Record

9. Slide 9 Projected U.S. Soybean Demand and Production

10. Slide 10 Forecasted Soybean Acres and Production Source: FAPRI, University of Missouri

11. Slide 11 Projected Impact of Increased Biodiesel Demand on Soybeans Soybeans Soybean Meal Soybean Oil Price Stocks

12. Slide 12 Potential New Feedstocks n Soybean Oil -- 56 gallons per acre n Canola Oil – 111 gallons per acre n Castor Oil – 141 gallons per acre n Others –Crambe, flax, mustard, sunflower, camelina

13. Slide 13 Final Comments n Biodiesel industry is relatively young n Growth rate dictated by price of Oil/Diesel first and then soybean oil prices n Important part of National Energy Policy but, Not Likely More than 10% of total distillate fuels in future