The biodiesel industry ex­perienced its worst losses on record last year due mostly to price hikes in soybean oil, the primary ingredient in the fuel, according to a University of Illinois analysis.

“We estimate that the average net loss in 2021 (for a representative Iowa biodiesel plant) was 61 cents per gallon, which dwarfs the historical average profit of 3 cents,” said University of Illinois economist Scott Irwin last week. “This...