Federal Agriculture Department officials are warning that the rising demand for biodiesel is pushing up the demand, and the price, for the feedstocks that go into biodiesel… and that is cutting into already thin margins biodiesel are working under.

USDA Chief Economist Keith Collins says soybean oil prices have already been going up, and farmers are planting 15 percent fewer acres of soybeans to make way for corn to produce ethanol… pushing supplies down even further… and prices for the biodiesel feedstock even higher.

“As we look out over the coming year, we still think we’re going to have adequate supplies of soybeans, but the price for soybean meal and soybean oil is going up, and biodiesel, made from soybean oil has already been on a very thin margin over the past year.”

Officials say rising regular diesel prices have stayed up as well, and that has helped.

Click here to hear the USDA’s story on this subject.