TAMPA, Fla. – Canadian omega 9 canola growers won’t face stiff competition from the mighty U.S. soybean industry for a couple more years.
High oleic soybeans were supposed to be on the market by now.
Pioneer Hi-Bred’s business manager for soybean output traits said in 2009 that the company planned to commercially introduce the product that spring with “aggressive ramp-up plans” in 2010 and 2011.
Flash forward to the 2011 Commodity Classic conference, where a company spokesperson said it is still in the pre-commercialization phase with “very small quantities” of a product that will compete with Dow AgroScience’s Nexera canola.
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“It’s a major piece of work for us to get this deregulated,” said Russ Sanders of DuPont, which owns Pioneer Hi-Bred.
Regulatory delays have been a major source of frustration for the company. It submitted its product for approval with the U.S. Department of Agriculture in 2006, and approval was granted last June.
The genetically modified crop has been approved in the United States, Mexico, Canada, New Zealand and Australia. The company is still awaiting regulatory consent in important export markets such as Japan, Taiwan, South Korea, China and the European Union.
Sanders said the EU will likely be the last to approve Pioneer’s high oleic soybeans. He expects the approval to come in early 2012, paving the way for widespread planting of the crop in 2013.
Pioneer hopes 20 to 30 percent of the 80 million acres planted to soybeans in the U.S. and Canada will eventually be converted to its high oleic varieties.
“We have pretty high hopes that this could be a crop that’s in the tens of millions of acres,” he said.
In the meantime, the U.S. soybean industry continues to lose market share in the food service industry to palm oil and high oleic canola oil, which are able to meet trans fat regulations.
Sanders estimates the industry has lost the equivalent of seven million acres to those competing crops since trans fat labelling laws were adopted.
He applauded the canola industry for developing a market for its omega 9 high oleic oil.
“That was a real wake-up call for our industry. We had to think about a way to improve this oil to recapture some of that market share,” he said.
It takes a long time to qualify an oil so that it can be part of a food company’s formulations.
Pioneer has signed more than 25 testing agreements with major U.S. food companies for its Plenish oil but is holding off on making long-term commitments until all the regulatory work is complete.
Pioneer’s Plenish oil will compete with Dow’s Nexera oil, but Sanders believes both products can take some of palm’s share of the food market because it has higher saturated fat levels than the high oleic products.
Sanders acknowledged that canola has an advantage in its higher oil content, but high oleic soybeans will have a big acreage and transportation advantage. A major focus for the company will be to keep its costs down.
One market Pioneer is targeting that Dow hasn’t is the industrial products market.
Plenish oil can be used as a replacement for dielectric fluids in transformers, which is a huge market.
