HIL are useful in agriculture because they can be used as feed for livestock or fertilizer and can bioconvert organic wastes, such as food waste and human and animal manure to usable fertilizer. In addition, HIL are being studied as a source of biodiesel because of their high-fat content. However, their use for biodiesel production has not been fully adopted. Here, the results showed that survival, weight gains, and total dried weight were significantly enhanced when HIL were fed dried-food waste (DFW)/chicken manure (CM). Furthermore, increased weight gain was observed in HIL fed DFW containing 5 mL waste cooking oil (WCO) per 100 g and 1.2% (v/w) fermented effective microorganism (F-EM). Based on these results, we prepared experimental feeds containing DFW, CM, WCO, and F-EM to establish an optimal feed for biodiesel production. We found that FT-1-2, a feed prepared with 60 g DFW, 40 g CM, 2 mL WCO, and 0.8% F-EM (v/w), significantly enhanced fat content, weight gain, and total dried weight of HIL. Our results indicate FT-1-2 is a suitable feed to breed HIL for biodiesel production. We then developed an automatic oil extractor for biodiesel production. The yield of the oil extractor was higher than that of solvent extraction. The study shows FT-1-2 is an optimal HIL feed for biodiesel production and that the developed oil extractor is useful for the extraction of crude oil from HIL and for the harvesting of defatted HIL frass for livestock feed and fertilizer. Taken together, we established an optimized low-cost feed for HIL breeding and developed an automatic oil extractor for the production of biodiesel from HIL.