High oleic oils | Lengthy approval process keeps high oleic soybeans out of production
NEW ORLEANS, La. — Approval delays continue to push back the rollout of high oleic soybeans.
The U.S. soybean industry is anxious to get into the commercial production phase of the crop because it is losing huge market share to imported canola and palm oil brought in to replace partially hydrogenated soybean oil.
Soybean growers thought approvals would be in place for a major launch of the trait this year. However, it didn’t happen and it looks like it won’t happen next year either.
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The European Union has approved the high oleic trait, but the new trait is being stacked with the glyphosate tolerance trait.
“The EU being the EU, they require approving the two to be used together, so that’s the next step,” Richard Galloway, president of Galloway & Associates, told the recent 2014 Oilseed & Grain Trade Summit.
The lack of global approval is limiting planting of the new high oleic soybean varieties because growers must adhere to strict segregation protocols.
High oleic oils have gained popularity because they are free of trans fat.
Galloway estimated that 40 million kilograms of high oleic soybean oil will be produced this year, 100 million kg next year and 300 million in 2016.
To put that in perspective, high oleic canola oil sales are expected to top 1.13 billion kg in 2014-15.
Galloway anticipated that demand for high oleic soybean oil will rapidly expand once approvals are in place.
The soybean industry expects 2.8 billion kg of edible demand and 800,000 kg of industrial demand by 2024.
The United Soybean Board is spending $60 million over five years to promote the product, with $40 million going to Pioneer and Monsanto for seed expansion and $20 million for market promotion.
Dave Dzisiak, commercial leader of grains and oils with Dow AgroSciences, said the European regulatory delay is a godsend for high oleic canola.
“It just lets canola get more market share and get better established (because) the launch of high oleic soybean oil is long delayed,” he said in an interview at the conference.
The U.S. Food and Drug Administration threatened last November to remove partially hydrogenated soybean oil’s Generally Recognized as Safe (GRAS) status. Food manufacturers have already dramatically reduced their use of partially hydrogenated soybean oil because of trans-fat labeling regulations.
Removing the GRAS status would be the final nail in the coffin. Galloway believes the FDA has already taken out the hammer with its threat.
“Really, it doesn’t matter what they do now because what they’ve already done is stigmatized partially hydrogenated oil,” he said.
“(Food companies) are going to be moving away from partially hydrogenated systems as quickly as they can.”
Dzisiak said manufacturers are reformulating products, but he estimated that U.S. food companies still use 900,000 kg of partially hydrogenated soybean oil a year.
An additional 2.5 million acres of high oleic canola oil would be required if all of that demand went to that commodity. However, there are other competitors. Galloway expects imported palm oil will mop up about half of that demand in next year.
Dzisiak estimated that 12 to 15 percent of next year’s Canadian canola crop will be planted to high oleic varieties, which comprises 25 percent of Canadian crush volumes.
He believes the share of the crop and crush will continue to grow despite the looming competition from high oleic soybeans.
“We have a very cost effective, great product that is kind of the incumbent, so we’re in a pretty good position. We can compete,” said Dzisiak.
