Increasing and stable demand for high oleic soybean oil for 2022 - Indiana Corn and Soy

Increasing and stable demand for high oleic soybean oil for 2022

Posted: November 1, 2022
Category: Indiana Corn and Soybean Post - Holiday 2021, ISA, News

U.S. soy checkoff partners such as the United Soybean Board (USB) and the Indiana Soybean Alliance (ISA) have been a champion of this technology for several years. With a versatile oil that provides a sustainable, highly stable, U.S.-grown product for the food industry and additional industrial users, high oleic soybeans will protect and grow demand.

High oleic soybeans brought an average premium of 50 cents to 99 cents per bushel, depending on the acreage grown and other factors, versus commodity soybeans last season. Locking in contracts like those available for high oleic can safeguard profits. Farmers won’t have to worry about storing any high oleic beans next season.

Walton, Ind., farmer Kevin Wilson began growing high oleic soybeans eight years ago.

“The benefits of high oleic soybean oil intrigued us,” said Walton, Ind., farmer Kevin Wilson, a director on the USB board. “High oleic soybeans diversify our crop portfolio and spread risk a bit without much management change. The premium is worth the minimal effort needed to clean planting and harvesting equipment between his commodity and high oleic soybeans.”

Former McDonald’s executive Tim Wrinn said the restaurant tested fries cooked in high oleic soybean oil, and it was positively received by consumers. Wrinn said supply is the big problem.

Wilson has grown high oleic soybeans for nearly a decade. He said there are many reasons farmers benefit by growing high oleic soybeans. “They’re basically the same as growing regular soybeans, so it makes it easy to use,” Wilson said. “And the flipside is that we’re getting a really beneficial oil that now has taken off in the demand side. So, it appears to me that it’s a really good win-win for everyone.”

The added value the high oleic beans have offered, in Wilson’s case for eight years, is also a benefit.

“We’ve really never seen any yield drags at all,” he added. “The genetics continue to improve; yields are definitely on par with our conventional soybeans. Bottom line is that we get an additional 75 cents to $1.25 depending on how it works out on top of it. So, this year with our rise in our inputs, especially to me, this is something that could be very beneficial.”

Farmers in 2021 planted about 600,000 acres of high oleic soybeans in 13 states. To meet food processors’ demand, which the soy checkoff is focused on building, the goal for 2022 is 1.1 million acres.

“As a result, farmers are going to really see more varieties out there, so that they’ve got more choices to choose from in the 2022 planting season,” said Wilson. “And something that I don’t know we’ve really talked a lot about, double cropping, if you happen to be in an area that does a lot of double cropping, I think that these might be something you really want to look at as well.”

Food industry insider touts high oleic soy

Tim Wrinn is an oil consultant to the food industry and a former executive with the Sara Lee Company and McDonald’s Corporation for more than 30 years. Wrinn was McDonald’s “resident potato person” when the restaurant began transitioning from partially hydrogenated soybean oil to high oleic canola oil. He said restaurants are always looking for an advantage.

“Soybeans have an inherent advantage for their long growing season, and that’s what large food companies need,” Wrinn said. “Yield per acre is better, and that gets cost down. If consumers are happy with the oil, then the food companies are 90 percent happy. That last 10 percent is about price. The new high oleic soybean oil is outstanding, and food companies know this, but there isn’t a lot of it, yet.”

He said the only hurdle preventing most large-scale food companies from switching to high oleic soybean oil is it’s limited availability.

“We were testing it when I was with McDonalds, and it tested well,” Wrinn admitted. “High oleic soy was not available in the quantities we needed at that time, and it still is limited today. But it is growing. We couldn’t switch the McDonald’s system over to something being processed on in a small setting. Right now, demand is there, but supply isn’t yet. Meeting that demand is the goal that we all have.”

Better health benefits for consumers is also attractive to restaurants, he said.

“Commodity soybean oil was once the most widely used oil in the food industry, at both the restaurant level and food-manufacturing level,” Wrinn said. “At McDonald’s, we didn’t want to change that flavor profile that everybody loves. Consumers liked high oleic soybean oil when we tested it with them. There’s no competitive advantage, no marketing advantage, to other oils over high oleic. The trans-fat issue is the whole thing, and high oleic soy is perfect to address that.”

Grain elevators offer premiums

Signs at a county fairgrounds offer information about growing high oleic soybean oil.

In a challenging economic time for many soybean farmers, central and northern Indiana grain elevators have teamed up to offer premium contracts for high oleic soybeans. ADM, Bunge, Perdue Agribusiness and Zeeland Farm Services crush high oleic soybeans and also refine and market the oil to food service operators, food manufacturers and non-food industrial users. Many smaller elevators are taking part in the growing demand for high oleic soybean oil.

“Above all, we aim to serve the farmers in our area,” said Dave Schnepf of Shideler Grain Company, Inc., of Eaton, Ind. “Anything we can do to make it easier for farmers to sell their beans and support everyone’s profitability this season, we’re going to do it. We’re excited to offer this service to farmers.”

Many grain elevators are offering farmers a premium to grow high oleic soybeans in 2022.

Schnepf went on to say that he can help farmers who are thinking of adding high oleic soybeans to their farm. “I’m happy to connect you directly with a farmer utilizing a high oleic contract for this growing season to go into more depth. Please let me know how I can best be a resource for you,” he said.

For contact information, visit the company’s website at www.shidelergrain.com

According to industry sources and USB, consumer demand is growing for food-grade, high oleic soybean oil.

Contracts are available for an estimated 50,000 acres. These contracts are available until they are all claimed. Participating elevators servicing central and northern Indiana include: ADM-Frankfort ADM-Logansport

• ADM-Swanington Clunette Elevator Co. Inc.

• Deatsman Grain Farms

• Dennis Grain Co.

• Gavilon Grain-Pleasant Ridge

• McGrawsville Feed & Grain Co., Inc.

• Moon Island Farms Grain, LLC

• Ridgeville Elevator-Elery Branch

• Shideler Grain Co., Inc.

• Smith Grain

• Wheatfield Grain Co.-Rensselaer

• Wheatfield Grain Co.-Wheatfield

For more information about high oleic soybeans, go online to www.unitedsoybean.org/media-center/issue-briefs/higholeic-soybeans, www.soyinnovation.com or www.qualisoy.com.

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