chicken fat? The price of biodiesel may drop big time!

[JBsZ06]

The price of biodiesel may be posed for a significant drop.

Animal fat, which is about 40 percent cheaper than soybean oil, is expected to become a cheap source for biodiesel fuel, according to the Associated Press.

Large meat packers, including Tyson Foods, Perdue Farms and Smithfield Foods, are setting up new divisions to cash in on the emerging fuel. Animal fats, such as those derived from chickens, typically cost less than 20 cents per pound versus 33 cents per pound for soybean oil.

Vernon Eidman, a professor of economics at the University of Minnesota and a biodiesel expert, said U.S. production of biodiesel will probably grow to 1 billion gallons within five years. By that time, animal fat is expected to account for half of the total biodiesel volume compared to 20 percent for soybean.

The National Biodiesel Board estimates that American production of biodiesel fuel more than doubled last year to between 150 million and 225 million gallons.

What this means to you: Chicken fat may make biodiesel a lot more affordable in the future.