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Food Price Impact Due to Biodiesel Production

20-04-2012

Expansion of biodiesel production in the United States has made a major effect on food costs.  It is apparent to associate the higher food cost with biodiesel production.  Turning used cooking oil into biodiesel will continue to raise the prices of food costs.    

The yellow grease market (used cooking oil) is at an all time high.  The reason for this is due to the higher demand on the finished yellow grease by agricultural feed mills.  There is now a great portion of yellow grease going into production of biodiesel leaving less for the feed mills and thus causing a demand.  These higher costs are passed on to the consumer of agricultural feeds, like chicken farmers.  The chicken farmers, in turn, increase their prices on the chickens.  Over six years, the costs of chicken wings have increased by 119%.  Wholesale prices on chicken wings peaked to $1.82 per pound in February 2012, versus $0.85 per pound in February 2006. 

These higher food prices are going to continue to rise.  As long as restaurants sell their used cooking oil to biodiesel manufacturers, it is just going to get worse.  So next time someone comes into your restaurant telling you that your used cooking oil could be better used in biodiesel, just remember who will be suffering.