Cargill set to take on soybean oil campaign

One of the two main developers of high oleic canola is at odds with the national industry association on the outlook for the commodity.

The Canola Council of Canada wants one-third of the 22 million acres of canola it envisions for 2025 to be high oleic and other specialty oil varieties.

That would be more than double the three million acres now seeded to high oleic canola in Canada, which represents about 15 percent of total canola acres.

Lorin DeBonte, technical director of market development in Cargill’s specialty seeds and oils division, believes the council’s goal is unattainable.

“Cargill just has a different vision,” he said during an interview at the 2015 International Rapeseed Congress.

DeBonte does not anticipate additional growth in the high oleic share of the canola market.

“There isn’t a demand to increase further production in this area. It’s unfortunate, but it’s where it is,” he said.

Willie Loh, vice-president of market development with Cargill, told the conference that the major players in the food service and packaged food industries have already made the switch from partially hydrogenated soy oil to high oleic canola oil.

“The penetration of high oleic canola has been nothing short of remarkable,” he said.

However, annual sales growth is flattening out. Sales that expanded at more than 10 percent per year from 2009-11 have slowed to four percent per year, which is equal to the population growth rate in North America.

He said high oleic canola has been on the market since 1993, and food manufacturers have figured out when they need it and when they can use lower cost substitutes.

“We believe that market penetration is near the maximum,” said Loh.

Dave Dzisiak, commercial leader of grains and oils with Dow AgroSciences, the developer of Nexera high oleic canola, has a different outlook.

He believes the U.S. Food and Drug Administration’s announcement last month of a complete ban on trans fats will expand the market. There is also room to increase de-mand in Japan and other Asian countries, where there are mounting concerns about saturated fat.

That is why Dzisiak believes the council’s 2025 goal is feasible.

Loh feels there is a good chance high oleic acreage will actually contract because of the looming competition from high oleic soybeans.

“If you’re in the high oleic canola industry, look out the window, they’re all coming after you,” he said.

The United Soybean Board is spending $12 million per year for five years promoting the new product in an attempt to regain the millions of acres it has lost to canola.

“This is a lot of money. They’re going to win. This is a big industry and there’s blood in the water,” said Loh.

In response, Cargill is developing a new high oleic, low saturated fat canola to maintain market share.

The product, which is in advanced field trials, contains four percent saturated fat compared to seven percent in today’s varieties.

That is well below the levels contained in DuPont Pioneer’s Plenish high oleic soybeans, which contain 12 percent saturated fat, and Monsanto’s Vistive Gold high oleic soybeans with six percent saturated fat content.

Cargill is convinced saturated fat will be the next battleground in the oil industry. The company has decided to drop its closed loop approach to high oleic canola production in an effort to encourage more growers to plant its Victory hybrids. In the past, it would contract acreage with growers who would then deliver to Cargill elevators or crushers. Other select crushers will now be able to contract Cargill’s InVigor Health lines of high oleic canola with growers in their regions.

“We’re determined that we’re going to win in this space,” he said.

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