The economics of soybean processing are quietly shifting, as improvements in extraction efficiency are reshaping the market for soybean oil and meal. Joe Janzen, an agricultural economist at the University of Illinois, has found that the conventional assumptions about the soybean crush 11 pounds of oil, 44 pounds of meal, 4 pounds of hulls, and 1 pound of waste per 60-pound bushel no longer fully reflect modern realities.
Janzen’s research shows that waste rates in soybean processing have fallen by 44% since the 1960s, dropping from 2.7% to just 1.5%. While seemingly minor, these reductions translate into billions of bushels processed more efficiently across the U.S., adding substantial economic value. At the same time, soybean oil extraction rates have increased, rising from around 18% in the mid-1960s to nearly 20% today. These gains in oil output have outpaced reductions in waste, subtly changing the composition of the crush.
The timing of these improvements is particularly relevant given the surge in demand for renewable diesel, which began around 2020. The data suggest that processors have been able to extract slightly more oil from soybeans in response to biofuel demand, even without reducing meal production. Janzen notes that this adaptation is gradual, likening it to turning an ocean liner rather than flipping a switch, but it demonstrates the industry’s ability to respond to shifting market conditions.
“For the past few years, right when renewable diesel took off, soybean oil extraction rates have been consistently above the long-term trend line,” Janzen said. “It’s clear the market is adjusting in real time, albeit slowly. These incremental changes have significant implications when scaled across billions of bushels.”
This evolving efficiency affects farmers, food prices, and fuel markets. More oil per bushel enhances margins for processors and increases the supply available for biofuel production, potentially easing pressure on prices. It also suggests that the standard industry assumptions about crush ratios often used to calculate board crush margins may need updating.
“Processors now have slightly more flexibility than previously assumed,” Janzen explained. “It’s not limitless, but being able to extract more value from the same amount of soybeans changes the economic dynamics for the entire supply chain.”
The soybean market, long thought to operate under rigid crush ratios, is showing signs of adaptability. As renewable diesel demand continues, these incremental efficiency gains may play a pivotal role in shaping future soybean oil and meal markets.
