Only a small fraction of U.S. biodiesel is currently made from chicken fat -- approximately 90 percent is made from soybean oil -- but Bagby may be getting in on the ground floor of a booming biodiesel ingredient as the cost of soybean oil starts to climb. Ostensibly, Bagby's plant will be able to produce about 3 million gallons of biodiesel a year using refined chicken fat, which he plans to mix with soybean oil to lubricate engine parts.
The plant -- planned for construction on the remote croplands that lie outside Dexter, Mo. -- has caught the attention of Tyson Foods Inc., the nation's largest meat producer, and subsequently, the largest producer of leftover fat. The company, which has a plant near Dexter, normally sends the byproduct out of state to be rendered and sold as an inexpensive ingredient for things like pet food and soap, but in November, the company announced that it planned to have its own renewable energy division in place sometime this year.
So far, there has been no official word on Tyson's renewable fuel plans, but company Vice President Jeff Webster noted at a recent investment conference that the company produces roughly 2.3 billion pounds of chicken fat every year, which could translate to about 300 million gallons of biodiesel. Tyson and competitor Perdue Farms have already started investigating the fuel's potential, as both companies are trying out biodiesel in their trucking fleets.
Other companies could quickly follow suit, spurred on by the biodiesel and ethanol markets' growth and the passing of the federal Energy Policy Act in August. The bill requires the United States to use 7 billion gallons of renewable fuels a year by 2012.
Animal fat was initially ignored by the biodiesel industry because of the product's uneven quality and because it may thicken and be rendered useless in colder temperatures, said University of Minnesota economics professor Vernon Eidman. However, despite the drawbacks of animal-fat biodiesel, Eidman, who has closely studied the biofuels industry, said the rising cost of soybean oil means investing in ways to turn animal fat into fuel makes more sense now than it did in previous years. Chicken fat is already the cheaper alternative at 19 cents a pound, compared to soybean's cost of 33 cents a pound, and Eidman said the wide availability and low price of chicken fat could make the resulting biofuel very attractive to the U.S. trucking industry.
Eidman estimates that the United States will produce about 1 billion gallons of biodiesel within the next five years. He expects half of that future yield to come from animal fat, and only 20 percent to be made from soybean oil.
Biodiesel is currently about $1 per gallon more expensive than regular diesel, but federal tax breaks could help mask that cost to consumers. Also, National Biodiesel Board spokesperson Amber Thurlo Pearson said a new source of biofuel would only help the industry.
"More biodiesel in the marketplace could help make biodiesel's cost even more competitive with diesel fuel," she said.
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