The price for soybean oil has hit 35 1/2 cents per pound on the Chicago Board of Trade. Soybean oil for December 2008 delivery was trading at just under 38 cents a pound, This is good news for soybean farmers but not so good for producers of biodiesel which relies heavily on soy oil.
Part of the price increase can be attributed to the increased demand caused by the emerging biodiesel industry. Developing more markets for farm products is a primary motivation to build alternative energy plants.
The soybean oil price has a ways to go before reaching its historical price. The record price for soybean oil was set in 1974, when the July contract price exceeded 45 cents a pound. That's actual price. Adjusted for inflation, 45 cents in 1974 would be $1.97 today.