Source: FARM DOC DAILY, UNIV. OF ILLINOIS, 3/1/17


The U.S. biodiesel production industry has a distinct "feast or famine" pattern in terms of profitability. The industry made very large profits in 2011 and 2013, but losses in most years previous to 2011 and losses again in 2014 and 2015. The feast or famine pattern is closely tied to expiration of the $1 per gallon biodiesel tax credit in the face of binding RFS biodiesel mandates. The biodiesel tax credit expired at the end of 2016, which should have led to another major boom in profits. However, a mid-year analysis of 2016 biodiesel production profitability suggested that the boom might not last as long or peak as high as in previous years. The purpose of this article is to provide a full-year review of biodiesel production profitability in 2016 and assess whether the profitability boom was indeed smaller than in previous years when the biodiesel tax credit expired. 

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