The new $63 million biodiesel plant in Algona, Iowa, is a "great, big, beautiful facility," says Kenneth Clark, board president of owner East Fork Biodiesel LLC. The plant also is idle.

It hasn't run since construction ended in December, except for a test. The reason: The price of soybean oil, a common raw material used to make biodiesel, has tripled in cost over the past two years.

"But no one in their right mind would run now," Clark said. "You'd lose money on every gallon you made."

Signs of distress in the biodiesel industry are visible across the country: Plants are idle, production reduced, construction halted, investment dwindling.

About 20 of 170 plants nationally have been idled, officials say. Others have reduced production.

"In 2007, most U.S. biodiesel plants found that they could not cover their operating expenses," wrote Bruce Babcock, an economics professor at Iowa State University. As a result, only about 500 million gallons were expected to be produced in 2007, he wrote.

That's only about 20 percent of U.S. capacity, according to the National Biodiesel Board.

Babcock calls biodiesel's outlook "dismal," even with a federal mandate that pushes annual consumer use to 500 million gallons next year and ramps up to 1 billion gallons by 2012.

Bucking the trend is a Hawai'i-based company called Pacific Biodiesel. In all, Pacific Biodiesel manages 10 plants in Hawai'i and on the Mainland and the company plans to open a new plant on the Big Island in the next year.

Rather than using soybean oil to produce biodiesel, Pacific Biodiesel uses waste oil from restaurants and other businesses. Owner Bob King said he gets a 90 percent yield from each gallon of oil and the byproduct, glycerin, is used to make boiler fuel or compost.

Producers and others call high commodity prices a temporary challenge. They point to new, cheaper feedstocks being developed, as well as higher-value uses of byproducts such as glycerin.

"The biodiesel industry is relatively new compared to its ethanol brother, so one would expect to see some growing pains," said Randy Olson, executive director of the Iowa Biodiesel Board. "There's been a global commodity bull market, and that has affected producers of biodiesel."

But Daniel Oh, chief operating officer for Renewable Energy Group, or REG, of Ames, Iowa, said some plants likely will not restart because they won't work economically. Two plants that REG manages — SoyMor in Glenville, Minn., and Algona's East Fork — have been idled. Also, REG halted construction last month on a 60-million-gallon plant in Emporia, Kan., citing difficulty in finding capital to finish the plant.

Babcock says the biodiesel industry is overbuilt, which has resulted in "low or zero returns to investors." He expects little to change that.

"Low feedstock prices will trigger production. But feedstock prices will be bid back up to break-even levels that do not allow for a return on capital," he said. "It's a Catch-22."

Clark said soybean oil was trading between 18 and 21 cents per pound when planning for the Algona plant was underway in 2006. Soybean oil for May delivery was about 58 cents a pound on the Chicago Board of Trade last week. It has risen as high as 70 cents a pound, officials say.

The reasons for higher soybean oil prices include increased demand from "a growing middle class in China, India" and elsewhere and investor speculation that has created froth in the markets, Olson said.

Jittery stock market investors have jumped into the commodities market, said Joe Jobe, chief executive officer for the National Biodiesel Board: "When there's a discussion of a recession, there's a retreat toward commodities. It creates volatility."

As a result, even with a $1-a-gallon tax break, biodiesel has been priced higher than diesel, given the skyrocketing price of soy oil and other feedstocks, industry leaders said. Last week, diesel cost about $4 a gallon, a 131 percent increase from a year ago.

Biodiesel plants that are able have switched to less costly animal fat to make biodiesel, Olson said. Those plants are more likely to operate than plants that rely on soybean oil.

East Fork is weighing whether to add equipment so it has more options in feedstock, such as animal fat, Clark said. It's also considering new feedstocks like algae oil, expected to come onto the market in about a year.

Other possible oils for biodiesel production include corn oil as an ethanol byproduct and jatropha, a weed that can be grown in marginal soil conditions.