Thursday, March 09, 2006

Biodiesel glut not so good for ADM?

According to this article by Motley Fool that is the truth. This is because there is a new entrant into the market:

French company Louis Dreyfus Corp. The firm is set to begin construction soon on the nation's largest biodiesel plant. When completed, the facility will have the capacity to produce 80 million gallons of biodiesel annually. It's a major investment considering that the National Biodiesel Board estimates that a total of just 75 million gallons of biodiesel were produced in the U.S. last year.

This article forgets that diesel is a big deal in Europe where this new company will be based. The ADM production will probably go to feed the need of the trucking industry in the US. This could be a boon for that industry since it will be a way to cut fuel costs. Hmm, I wonder if Congress could be smart enough to pass a tax break for trucking companies that switch 100% to biodiesel? Seems like it would be a good idea to me.

1 comment:

Joemama said...

I agree with your sentiments. This guy was looking at how most passenger cars in the US aren't diesel and did the math from there. He is obviously not a trucking analyst.