It’s on.
After years of regulatory delays, developers of high oleic soybeans are finally in a position to take back market share lost to high oleic canola.
After a lengthy review process, China has approved Monsanto’s Vistive Gold soybeans, paving the way for full-scale commercial introduction of the product in 2018.
It will be competing head-to-head with high oleic canola out of Canada.
“We are excited and encouraged by that news,” said John Motter, chair of the United Soybean Board.
Read Also
Canada’s plant hardiness zones receive update
The latest update to Canada’s plant hardiness zones and plant hardiness maps was released this summer.
Monsanto had little to say about the development other than it has not finalized its 2018 commercialization plans for Vistive Gold.
However, Motter said the company has been “poised and ready” for years to launch the product.
U.S. growers planted an estimated 700,000 acres of high oleic soybeans in 2017, the vast majority of which are DuPont Pioneer’s Plenish soybeans. Plenish is still awaiting full approval in the European Union. Motter expects that to come this summer.
He believes acres will double next year and every subsequent year for the foreseeable future now that Vistive Gold has global approval.
“It gives us the opportunity to reach our stated goals of having 18 million acres of high oleic soybeans here in the United States by 2025,” he said.
Dave Dzisiak, commercial leader grains and oils at Dow AgroSciences, the manufacturer of Nexera canola, said high oleic canola has enjoyed a huge head start on its competition.
That has allowed the product to make inroads in the U.S. market where it has been displacing hydrogenated soybean oil.
“Certainly it’s nice to have the market to yourself for a while like that, longer than what we had thought,” he said.
Dzisiak expects a full-on market brawl because the U.S. soybean industry is not pleased that canola oil has rapidly become the second most popular food oil in the U.S. It is gearing up to win back the market share it has lost to high oleic canola and other oils.
“So we need to be as good as we can be and have the whole supply chain look to maintain the markets we have established and created for ourselves,” he said.
Motter was a little more conciliatory in his comments.
“Certainly I think there’s room in the market for everybody,” he said.
However, he later acknowledged that the goal is to win back market share lost to canola and palm oil.
Dzisiak considers Vistive Gold to be the bigger threat because it has a fatty acid profile that mimics Dow’s omega 9 oil.
“It has got a high oleic profile like omega 9, it has the same low linolenic profile as omega 9 but it also has low saturates, and that’s a first,” he said.
“That’s where canola has always been a unique product, and this could really change that.”
One thing canola has going for it is its track record of reliable supply combined with good functionality.
“In the end it’s going to come down to, ‘are we price competitive and then how is our functional competitiveness?’ ” said Dzisiak.
He said canola oil has become price competitive because of growers expanding production and the weak Canadian dollar.
Canadian growers planted 2.5 million acres of high oleic canola this year, or about 11 percent of total acres.
Motter believes the soybean industry has a leg up on canola because of its size and proximity to end users of the product.
“We certainly think we have advantages in soybeans because of the wide geographic area where we can grow soybeans,” he said.
Dzisiak said the industry’s vast production capabilities could also be its downfall because U.S. soybean crush facilities are massive and are not made for segregation.
“They are meant to run flat out all day,” he said.
Meanwhile, the smaller and more nimble Canadian canola crush plants are devoting one-quarter to one-third of their capacity to processing high oleic canola.
In addition, Canadian growers have plenty of on-farm storage and grow a wide diversity of crops, so they are used to flowing product into the system as required.
Dzisiak said high oleic soybeans have good functionality, but studies and anecdotal reports from oil customers have indicated that there are taste issues with the product when frying potato chips.
“We know some large people in packaged goods that aren’t testing it anymore even,” he said.
Motter said switching from processing conventional soybeans to high oleic soybeans will not be nearly as onerous a process once there is full global approval in place for both Monsanto’s and DuPont’s products.
As well, he disputed Dzisiak’s criticism about product palatability.
“I’ve eaten a lot of high oleic potato chips and I guess I’m not too concerned about the taste,” he said.
