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The level of demand hasn't been fully established in this mkt (turkey offal to biofuel), therefore there is no equilibrium point for the price. The plant you refer to, in Carthage, MO, is also going through numerous hassles with EPA and the city fathers (the place REALLY smells -- fortunately, it smells like turkey -- and a lot of locals are very, very upset).

Assuming the latter problem can be palliated to a sufficient degree, the price of the input will sooner or later (sooner, in my view) stabilise at a low level. There is no economic reason why turkey growers should continue to pay for offal disposal; there is only dog-in-the-manger pique.

Grant, generously, that the cost of production of light oil from such a plant runs $18/bbl using 'free' input, 42.8 cents/gal (the plant, one of ConAgra's joint projects, says COP is about $15/bbl). Given that 200K lbs of turkey offal, processed, yields about 600 bbl, 25200 gal, of what is effectively #2 oil, and given that average-grade diesel weighs approx. 7.1 lbs/gal, the plant could easily afford to pay 5.25 cents/lb for the offal, and wind up with a **total** production cost, before taxes, distribution, and profit, of just 80 cents/gal for the product.

Add the others in (depending on how greedy the gov'ts involved will be) and you get something like 1.15/gal for light #2, in distributors' hands (i.e. shipped once -- this stuff can be piped, btw, which should keep shipping costs lowish). Put another 15 cents on it for the distributors' profit when selling to homeowners/local businesses, and you've got 1.30/gal for a final consumption price. It might be more efficient just to sell the turkey biodiesel as motor fuel rather than as heating fuel; transport costs would certainly be lower. And, all this assumes, remember, that the actual COP is 20% higher than the plant's stated COP, so the real-world price is almost surely lower than this 1.30 figure when the plant pays a nickel or so per pound for the input.

Front-month #2 oil on NYMEX closed at 1.95/gal Friday. This price differential between turkey (et al) biodiesel and #2 will do nothing but decrease in future, too, as economies of scale kick in. The downside to turkey biodiesel is that there's not enough available input to produce, ever, more than 8-10% of the mkt demand.

Unless, of course, we start using chicken offal, and hog waste, and other inputs that we have entirely TOO much of and don't know what to do with.