The renewable diesel surge is more than just a headline - it's reshaping the U.S. soybean industry from the inside out. While attention often goes to biofuel plants and policy incentives, the frontlines of change lie in crushing facilities where soybeans are processed into oil, meal, hulls, and waste.

Each 60-pound bushel of soybeans historically yields about 11 pounds of oil and 44 pounds of high-protein meal, along with hulls and a small fraction of waste. But these numbers, once considered constants, are beginning to shift in response to rising demand for renewable diesel feedstock.

Increased oil demand has led to expanded domestic crush capacity, with more soybeans being processed to meet fuel industry needs. Yet the soybean sector's response is not limited to scale. As highlighted by researchers Joe Janzen and Yu-Chi Wang, U.S. soybean processors have improved crushing efficiency, reduced waste, and increased oil yields over time.

Long-Run Efficiency Gains Between 1964 and 2025, soybean crushing waste rates have dropped from 2.7% to 1.5%, a 44% improvement. This reflects gains in machinery, measurement, and refining processes. The average annual decline of 0.02 percentage points signals consistent, if gradual, progress in minimizing losses.

Trends in Oil Extraction Rates The average soybean oil extraction rate rose from 17.9% in 1964 to 19.8% in 2024, implying that a modern bushel now produces 10% more oil than 60 years ago. Even small percentage point shifts at scale yield massive volume increases, particularly in a market where margins are measured in cents per pound.

This growth has accelerated since 2020 - coinciding with the start of the renewable diesel boom. Extraction rates have exceeded long-term trends every year since, suggesting the industry can and does adjust its processing mix in response to demand.

Global Comparisons Argentina, another soybean giant, has seen extraction rates grow by 0.08 points per year, faster than the U.S., though from a lower base. Today, both nations sit near 20% extraction efficiency. Meanwhile, Canadian canola processing has followed a similar path, with extraction rates rising from 39% to 44% between 1964 and 2025.

Environmental conditions, such as drought, can temporarily suppress oil yields - as seen in recent Canadian data - but the overall trend across oilseeds remains clear: processors are extracting more oil per seed than ever before.

Implications for the Farm Gate and Market This structural evolution challenges the industry assumption that the oil-to-meal ratio is fixed. Not only is more oil being produced per bushel, but processors may strategically shift toward oil when price signals warrant it.

That shift comes with downstream effects. Increased oil production means more meal as a byproduct, potentially softening soybean meal prices in feed markets. Simultaneously, if oil gains outpace total crush growth, it could support higher soybean prices.

Still, the data so far show limited direct response to short-term diesel market changes. The industry moves slowly, with efficiency gains shaped more by long-term investment and processing technology than seasonal price spikes.

More to Come Future research will explore the next layers of this transformation: price impacts, profitability across the supply chain, and how farmer decisions interact with processor incentives in the renewable fuel era.