High-oleic soybeans will crop up in more regions of the eastern soybean belt this spring, as two seed companies continue to woo farmers and processors while awaiting full regulatory approval.
DuPont Pioneer expects to see about 1,000 farmers roll out 200,000 to 300,000 acres of Plenish soybeans in states like Ohio and Indiana. Monsanto is targeting 25,000 to 35,000 acres for their Vistive Gold beans in Ohio, Indiana and Michigan.
The high-oleic beans are genetically engineered to produce oil that has no trans-fats, is lower fat, has lower linolenic levels and produces higher levels of oleic acid than commodity soybeans. That translates to a healthier oil profile and more-stable cooking oil.
Thanks to the oil’s high flashpoint, low combustibility and non-toxic, bio-degradable nature, industrial companies are increasingly experimenting with the oil in other applications, such as lubricants, greases, foams and cosmetics.
“The United Soybean Board has projected that the opportunity for high-oleic soybeans will be somewhere around 17 million acres out of roughly 80 million acres,” Russ Sanders, the director of food and industry markets for Pioneer, told DTN.
These new soybean markets represent a timely opportunity, Sanders added.
“The industry essentially lost about 10 million acres equivalent of the soybean oil business in food markets when the FDA started requiring labels for trans-fats in 2006,” he explained. “Since the year 2000 to today, we have dropped from soybean oil having 80% share of the food oil market in the U.S. to 59%. And we have potentially another 4 million acres that we can lose as a result of this most recent announcement by the FDA that says they’re no longer going to allow hydrogenation. That’s why this product couldn’t come at a better time,” Sanders explained.
ON THE GROUND
For now, both companies are holding off on a commercial release of their beans until they have full regulatory approval for the beans. Monsanto is waiting on import approvals from the EU and China, which they expect in time for a full commercial launch in 2015. Pioneer has Chinese approval, but is hoping for EU approval to come halfway through 2015.
In the meantime, farmers who contract with either company to produce the beans are still under full stewardship requirements that include cleaning out combines and planters and segregating the beans in storage. They must also work closely with the participating processors. Monsanto has helped farmers contract their acres with Zeeland Farm Services, a Michigan-based soybean crusher and processor. For Plenish producers, Pioneer helps arrange contracts with ADM, Bunge, Cargill and Perdue Agribusiness for oil production.
For now both companies are offering high-oleic seed suited for growers in eastern soybean belt states such as Ohio, Indiana, and Michigan. Sanders said Pioneer expects to expand to states such as Nebraska and Iowa in the next couple years.
Sarah Vacek, Monsanto’s soybean quality traits product manager, said yields from Vistive Gold beans are competitive with commodity soybeans, even in the face of extreme weather. “What’s great about the geography that we’ve been working in is that we’ve seen quite the range of weather the last couple of years,” she told DTN. “In 2012, we stood up really well under dry conditions and growers were really pleased with the harvest. In 2013, we experienced some pretty wet conditions during the growing season — in the reproductive phase — and growers are reporting that they’re satisfied and happy with how they’re performing.”
Sanders said Plenish beans suffered the same as commodity beans in the drought of 2012, but the company was relieved to discover that the bean’s prized fatty acid profile was not affected by environmental stress.
Both companies are offering double premiums to growers that produce the specialty beans under contract. Monsanto pays farmers $12.50 per acre for following stewardship steps in addition to a 60-cent premium. Pioneer offers a 40-cent premium for their beans, and then an additional 50-cent premium for “buyer’s call,” where the farmer holds onto the beans until the processor needs them.
After regulatory approvals come in, some stewardship requirements will probably be dropped, Sanders acknowledged. Yet both companies stressed that certain segregation steps will always be crucial for farmers growing high-oleic beans.
“You’ve got the stewardship piece largely because of the unique fatty acid profile that’s adding value to the downstream customers, and processors will want to keep it segregated so they can capitalize on that,” Vacek said.
Once these two brands of high-oleic beans are released commercially and some of the stewardship requirements are relaxed, the premium will be determined by the processors and the marketplace, company representatives told DTN.
Zeeland Farm Services contracted with farmers for 6,400 acres of Vistive Gold beans in 2011 and is aiming for 20,000 acres from Michigan and Ohio farmers in 2014.
“The food industry is starting to adopt high-oleic oils quite well,” said Zeeland’s Vice President of Oil Marketing Robb Meeuwsen. “So far we’ve had nothing but positive feedback from our oil customers. They like the long-life as far as the fry life goes. It keeps their fryers cleaner, too — they get much less residue building up on them.”
Zeeland Farm Services’ high-oleic bean oil is running at a 10-to-13-cent premium per pound over commodity soybean oil, but Meeuwsen believes that will come down as more farmers add acres.
For now, high-oleic soybeans lack the geographic range and large-scale acreage required to supply the large-scale restaurant and fast-food industry, Meeuwsen said.
“I think the future is looking bright,” he said. “But it has to be adopted by more of the food industry — they have to find uses for it. It has to be cost-effective for the food industry, and the other thing they worry about is volume. They have all their labels set for the product and to switch them over is very costly. So there’s plenty of more testing to be done by processors, but I think it will be promising.”
In the meantime, Monsanto is working on rolling out another specialty soybean: SDA Omega-3 soybeans, which they expect to launch commercially six months to a year after the Vistive Gold launch in 2015. The company is partnering with a nutritional ingredient company, DSM Nutritional Products, which will brand, package, market and sell the beans to food industry customers.
Sanders said Pioneer’s next goal is “the Holy Grail” of the grain industry: a soybean variety with added value properties on both the oil and the meal side.
“Around 60% of the value of the soybean is the meal,” he said. “So that’s a nice attractive target for us if we can find ways to improve the feeding value, maybe improve protein composition, energy composition, just the overall meal-feeding value of the soybean.”