DEXTER, Mo. --- Plans call for a new $5 million biodiesel plant that will use chicken fat waste produced at a nearby Tyson Foods poultry plant. According to a report in the Detroit Free Press, Jerry Bagby and his partner Harold Williams plan to refine the chicken fat, combine it with soybean oil to ensure proper lubrication for engine use, and produce about 3 million gallons of biodiesel each year. Cheap animal fats hold promise in the future production of biodiesel -- and meatpackers have taken notice. Tyson Foods announced in November that the company was launching a renewable energy division in 2007. Perdue Farms and Smithfield Foods have indicated similar plans. Using animal fats makes economic sense for biofuels producers. Soybean oil costs 33 cents a pound, but chicken fat costs 19 cents.

Originally posted on Fleet Financials