07 November 2005 00:01 [Source: ICB Americas]
Oilseed processors are lining up for a piece of the low-linolenic soybean market. More than 150,000 acres of the soybeans were planted this year in anticipation of the incoming trans-fat labeling rules beginning January 1. Contracted acreages are expected to rise to more than 700,000 in 2006.
“Current soybean oil is not optimal for a lot of food applications as it is often hydrogenated or blended for it to become stable. With every 18 billion pounds per year of domestic soybean oil consumed, 1.9 billion pounds of trans-fatty acids are being produced,” said David Stark, vice president, global industry partnerships at Monsanto Company. He recently spoke at the American Fats and Oils Association (AFOA) meeting held in New York City.
Stark highlighted trait-enhanced oils such as low-linolenic soybean oil as a healthy alternative to partially hydrogenated soybean oils. “The market needs cost-competitive trans-fat-free oil that doesn’t compromise taste or increase saturated fat. Substitution of more-stable oils like low linolenics in some major food categories could decrease trans-fat consumption from soy by two-thirds,” he added.
Monsanto is currently marketing its Vistive low linolenic soybeans for the 2006 crop season and already contracted several major oilseed processors such as Cargill, CHS, Ag Processing Inc., and Zeeland Farm Services to crush and sell the oil to the food industry. Monsanto expects Vistive soybeans, which contain less than 3 percent linolenic acid, to grow on nearly 500,000 acres in 2006. The planned acreage will produce an equivalent of more than 250 million pounds of oil. The company estimates Vistive soybean oil supply in 2005 to be around 70 million pounds.
Cargill expects to contract up to 150,000 acres of the soybean in 2006 with growers in Iowa. The company will pay a premium to farmers who contract to grow the soybean.
“Trait-enhanced soybeans help address food manufacturing customers’ desire to reduce the trans-fat content in processed foods while providing farmers a premium for growing a higher-value product,” says Jim Sutter, vice president of Cargill’s grain and oilseed supply chain. “We expect to see more of it in the future as additional traits are developed in response to market demand.”
Last year, DuPont, parent company of Pioneer Hi-Bred International, formed an alliance with Bunge Ltd. for the production and marketing of the alliance’s Nutrium Low Linolenic soybean oil. The oil, which comes from Pioneer soybean variety 93M20, also has a linolenic acid profile of less than 3 percent. Contracts in 2005 for the soybeans were offered through Bunge North America at participating elevators in Iowa and Ohio.
Pioneer targeted around 35,000 acres of the soybean for the 2005 season and says it has sold out its seed supplies. The company expects to sell around 200,000 acres of the soybeans for the 2006 season, expanding the program to include Illinois, Indiana and Michigan.
“As the deadline for the trans-fat labeling approaches, inquiries from the food industry on oil alternatives have increased and we expect demand for low linolenic soybeans to rise,” says Troy Hobbs, business manager for the Bunge DuPont Biotech Alliance. “Projected US market opportunity for low-linolenic soybeans is around 5 million acres or the equivalent of 2.5 billion pounds of low-linolenic soy oil. It will probably take the industry up to 2010 or 2011 for supply to build on that level.”
Some of the current challenges for members of the food industry, according to Hobbs, include solidifying plans on the best way to address the trans-fat issue and the prices for current options. “The premiums for current trans alternative oils, which include but aren’t limited to soy oil, are on the high side. But as volumes increase, we expect to see those cost structures improve,” adds Hobbs.
Both Pioneer and Monsanto note continuous research and development in the improvement of low-linolenic soybean varieties. Another type of low linolenic soybean is currently being marketed by Asoyia LLC, a privately held, farmer-owned company in Iowa. The soybean, which features less than 1 percent linolenic acid profile—the lowest linolenic acid level available in the market, was developed by agronomists and food scientists at Iowa State University. Asoyia has already sold 3 million pounds of the oil this year.
“Interests for the soybeans have far exceeded our expectations,” says Vivan Jennings, CEO of Asoyia. “The company is harvesting 25,000 acres this fall, the equivalent of more than 12 million pounds of ultralow-linolenic soybean oil. We quadrupled our acreage this year in response to demand and we plan to continue increasing acreage even more in future years.”
Asoyia recently announced a research and marketing collaboration with Dairyland Seed, a privately-owned seed company based in Westbend, Wis. The alliance will develop high yielding soybeans with improved genetic packages that contain 1 percent ultralow-linolenic soybean trait.
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