The U.S. soybean processing industry is undergoing a structural shift driven by the renewable diesel boom. As domestic demand for soybean oil accelerates, the traditional balance between oil and meal in the soybean crush is changing rapidly. Historically, soybean meal contributed the lion's share of value, but recent data show oil has not only gained ground but also introduced significant volatility to margins and price relationships.

Soybean oil prices have soared since late 2020, at one point nearly tripling from $0.26 to $0.94 per pound. While meal and whole soybean prices also rose, their increases were less dramatic. This change has elevated oil's share of total crush value, which has hovered above 35% and peaked at 50% during 2021 and mid-2025-a stark departure from the previous 25-35% range. Concurrently, gross crush margins have become more volatile, swinging more widely than in the stable years of 2015-2020.

Regression analysis further underscores the transformation. Whereas price changes in oil and meal previously explained nearly 80% of the variation in soybean prices, that explanatory power has now collapsed to just 32%. This statistical breakdown signals a departure from the stable co-movement that characterized the soybean complex for over a decade. The new pricing environment reflects the growing influence of U.S. renewable fuel policy, which is altering market behavior and complicating forecasting models.

These developments carry significant implications for farmers, processors, and traders. Traditional pricing models may no longer be reliable. Crush margin risk has increased, necessitating more dynamic risk management. And with domestic biofuel incentives playing a larger role, U.S. policy decisions now hold even more sway over soybean economics.

Amid this shift, the soybean industry must reassess its strategies. Oil is no longer a stable byproduct; it is a primary driver of value and uncertainty. For stakeholders across the supply chain, adapting to this new volatility regime will be essential to staying competitive and resilient.