Soybeans hit a 34 year high as drought, increased demand from China, and falling U.S. stockpiles drive prices.

Check the article: Soybeans Rise After Government Cuts U.S. Inventory Forecast

Now, take a look at this graph.

Source: www.biodiesel.org

Notice the change in U.S. biodiesel production from 2004 to 2005 and from 2005 to 2006 and you will see drastic increases in production. Between 2004 and 2005 biodiesel production tripled, and the estimate for 2006 is more than double 2005! A majority of biodiesel in the U.S. is derived from soybeans. During this time, U.S. stockpiles have been diverted to make increasing amounts of domestic biodiesel.

We are facing increasing global demand of soy for livestock rations, food, cooking oil, and now fuel. Check this out:

Source: http://news.mongabay.com/2007/0608-adm.html

Archer Daniels Midland has a plan to increase the production of soy-based biodiesel in Brazil. Where is all the land coming from to make soy-based biodiesel? You guessed it, the rainforests-or at least what used to be rainforest. The operation was slated to begin August in the Brazilian state of Mato Grosso. Sadly, Mato Grosso is the site of some of the worst deforestation in the world, and while projected crop production looks rosy, it is far from clean, green fuel.

The trouble with planting crops in what used to be the Amazon Rainforest is that the soil is incredibly low in organic matter. Once the soil is stirred up (as a result of logging and cultivation), the soil biology quickly consumes the organic matter. This forces farmers to adopt a no-till system of farming that leaves crop residue on the surface and uses herbicides to kill the weeds as the next crop is seeded. No-till cropping systems try to preserve the organic matter in order to prevent the soil from quickly turning to dust. As you might expect from agribusiness it relies on substantial fertilizer inputs to prop up weak soils. While production of soy in Brazil may lower global soy prices, (for at least a short time), it is creating the biofuel nightmare that we are all afraid of! Think about it for a moment... Imported biofuel from Brazil, grown in what was once a rain forest, which utilizes huge amounts of artificial chemicals and genetically modified seeds. ....Terrifying, don't you agree?

Biofuel initially appealed to “greens” because it seemed to be a cleaner option. In some cases biodiesel can be made locally to be utilized by local consumers. From an agricultural standpoint, biodiesel still appears promising as an energy source to support farm s that will grow the world’s food. However, as consumers, we must be careful and temper our demand for liquid fuels with an understanding of the current state of the climate and the global food system. In short, we are faced with a dwindling food surplus and increasing demand by developing nations, while at the same time the climate is screaming to get our attention.

As always, we need to think about the way we use liquid fuel and oils and we need to prioritize the ways in which we use these scarce and vital resources. It is our responsibility to make choices for the future, and that means considering what is safe for the earth and the climate. Constant Growth is a False Assumption and if we do not choose to take the implications of climate change, food, and energy security seriously, we will be forced to address these issues when we have far fewer options to work with.

For those who want to read more you can click here to read the article: "Switch to Corn Promotes Amazon Deforestation". It is from the recent December 2007 volume of Science.