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The Soy Checkoff Is Working To Turn Soybean Oil Into Liquid Gold. | KTIC Radio

The Soy Checkoff Is Working To Turn Soybean Oil Into Liquid Gold.

The Soy Checkoff Is Working To Turn Soybean Oil Into Liquid Gold.

Soybeans are crushed for meal. This unspoken belief permeates the soy value chain, supported by increases in the output of global animal ag operations and past blows to commodity soybean oil in food markets. Some would go as far as describing soybean oil as a byproduct of meal production.

Indeed, soybean oil, which accounts for about 20 percent of a soybean’s mass, is often perceived as secondary to soybean meal.

However, through key investments by your soy checkoff, soybean oil has emerged as a significant and resilient value-driver for U.S. farmers. It boasts a diverse customer base, major growth potential, precision focus on end-user needs and unmatched flexibility in real-world applications.

“The uses and possibilities for soybean oil are almost endless,” says the United Soybean Board’s (USB) Oil Target Area Coordinator, Dan Farney. “I’m excited about what I’m hearing and seeing about oil building healthy markets for soybean farmers, especially when we get to high oleic oil.”

From your tractor’s tires to its paint to its seat cushions and even the fuel in its tank, soybean oil can lay claim to just about any industrial use you can imagine. Industries from baking to boat manufacturing, both domestically and abroad, all have their eye on soybean oil.

And with near-infrared (NIR) technology becoming more accessible to measure component amounts in soybeans, farmers can monitor the value of their oil and watch it rise as more industries put it to use.

Innovate or perish

For decades, soybean oil rode the comfortable wave of food industry demand. It served as a versatile oil used in frying and baking, and in products like barbecue sauce and non-dairy creamers. On top of that, it was cost-effective and widely available. Then came 2006.

In 2006, the U.S. Food and Drug Administration (FDA) mandated the labeling of trans fatty acids on nutritional labels, causing an exodus of soybean oil’s food customers and signaling further legislation.

When the dust settled, the toll was 4 billion pounds of lost annual demand.

But the trouble was only just beginning. The FDA has since labeled partially hydrogenated oils (PHOs) as not Generally Regarded as Safe (GRAS) and has given food manufacturers until June 18, 2018, to remove them from their products. While strong demand for commodity soybean oil still existed for many uses, whole customer segments were distancing themselves from the soy industry.

Had the soy checkoff been resting on its laurels, this impact could have meant tanks upon tanks of soybean oil going rancid at processors, which would subsequently have to slow down meal production with limited capacity to store excess oil. Luckily, the checkoff had an answer: light the oil on fire.

Biodiesel to the rescue

In 1990, the Missouri Soybean Merchandising Council funded a study with the University of Missouri to use a soy-based fuel as a diesel replacement. Since the success of that landmark study, the national soy checkoff has made significant contributions in the funding and promotion of this soy-based fuel, now known as biodiesel. The impact of these investments is staggering.

In the 2015/16 marketing year, the U.S. market used more than 5.6 billion pounds of soybean oil for biodiesel production, more than making up for lost food-oil demand.

The diesel fleets of municipalities, corporations and trucking companies have switched to biodiesel for its environmental benefits and the fact that it is literally a home-grown energy source. And experts expect the trend of switching from petroleum diesel to biodiesel to continue.

“We’re very confident that we’ll be growing soy biodiesel use dramatically over the next five years,” says Steve Howell, senior technical advisor for the National Biodiesel Board (NBB) and president of M4 Consulting.

Howell believes there are numerous factors that lead to a bright biodiesel outlook.

“The reasons for this optimism is that this is a product that significantly lowers the carbon footprint, it’s an added market for farmers, it creates new jobs in the economy and it’s a renewable fuel resource,” he says. “All of these make soy biodiesel a very popular alternative.”

Beyond the Department of Motor Vehicles (DMV)

As impactful as biodiesel is on the road, it goes beyond the limits of pavement and asphalt. Biodiesel can now be found in the tanks of boats and planes and even in homes in 23 states.

Marketed as Bioheat®, biodiesel is blended with traditional petroleum home heating oil to offer customers a cleaner, more environmentally friendly option for keeping toasty in the winter. These benefits are helping the heating oil industry gain the edge over natural gas as the preferred source of home heating fuel in the region.

“The Bioheat advantage is now being delivered to homes by the same family-owned, full-service heating oil companies that have delivered traditional heating oil for decades,” says NBB’s petroleum liaison, Paul Nazzaro. “In response to growing consumer demand for clean, renewable fuel sources, these companies are evolving to offer a cleaner, more efficient product.”

Bioheat’s cleaner burning characteristics do more than just make consumers feel good about their heating choices. Customers will also see a difference in their home heating equipment.

“It’s a better fuel for heating equipment as it may extend equipment life while reducing maintenance and service calls,” Nazzaro says. “It’s proven to be a better choice all around.”

Policymakers in New York City are among those who see Bioheat as a boon for the home heating industry. The Big Apple will be incrementally increasing heating oil blends from 2 percent Bioheat up to 20 percent by 2034.

But, back to food …

Biodiesel has done a great job at soaking up lost food-oil demand for soybeans, but the checkoff has no plans of throwing in the towel when it comes to providing the food industry with an exceptional product.

Make that three exceptional products: high oleic, fully hydrogenated and interesterified soybean oil.

High oleic soybeans were developed by seed companies in the mid-2000s to produce a trans-fat-free soybean oil. The oil produced by these soybeans doesn’t need partial hydrogenation for stable shelf life. That means no trans fats and lower saturated fats than commodity soybean oil. On top of that, high oleic soybean oil brings superior cooking properties to the table, such as high heat stability and long usage life in deep fryers.

Before the food industry reopens the door to soybeans, they need assurance that there will be enough of this premium oil to warrant them making the switch.

The checkoff made significant investments in research with both Pioneer and Monsanto to accelerate the development of expanded high oleic maturity groups. Because of these investments, more farmers are able to grow them in more regions, giving oil buyers the confidence they need in a reliable high oleic supply.

“We’ve developed high-yielding high oleic soybean varieties with the right traits needed in geographies that source these products,” says Steve Schnebly, DuPont Pioneer senior research manager. “For now that’s the Mid-Atlantic region of the United States, Indiana, Ohio, Michigan, Iowa, Minnesota and Nebraska.

According to Schnebly, many farmers outside of those regions can look forward to growing high oleic in coming years.

“We’re also filling the research pipeline with other maturities for future geographies as the marketplace expands,” he says.

High oleic soybeans now have processors accepting them in 12 states, with expansion continuing each year. At their current growth rate, high oleic soybeans will become the fourth largest grain and oilseed crop in the U.S., with 18 million planted acres. That equates to a major resurgence in the food industry and an overall increase in soybean value.

“One sign of confidence in our current Plenish® high oleic line of products is that we’ve got several growers who have dedicated their entire soybean production to high oleic varieties,” says Schnebly.

But what about commodity soybean oil? Checkoff-funded research has created a home for additional commodity soybean oil in food uses.

Commodity soybean oil can be stabilized not only through partial hydrogenation, which produces a liquid oil, but also full hydrogenation, which produces a trans-fat-free solid oil. Fully hydrogenated commodity soybean oil can be blended with high oleic oil for bakery applications that require harder lipids.

Interesterified soybean oil is another form of commodity soybean oil that comes free of trans fats. This oil, which serves the same purposes as typical shortenings, can be tailored to end users’ needs with customized melting points.

“The advantage of interesterified soybean oil for end users is that it provides the same functionality as partially hydrogenated soy oil with advantages over the palm oil alternative,” says Darren Moody, liquid oil product manager for Bunge. “An additional upside is that soy oil has a shorter supply chain because the source is home grown, coming from American soybean fields.”

QUALISOY, a third-party collaboration of soybean stakeholders, conducts checkoff-funded research to leverage that domestic advantage by developing soybean oil with enhanced traits, meeting the needs of end users. Among their customer-focused developments are interesterified and fully hydrogenated soybean oils.

“Interesterified soybean oil and blends of fully hydrogenated soybean oil provide functional replacements for partially hydrogenated shortenings,” says QUALISOY oil consultant Richard Galloway. “Among the more difficult applications, such as icing shortening and donut frying shortening, interesterified high oleic soybean oil provides an ideal replacement for PHOs.”

While icing and donut applications may seem like small potatoes to soybean farmers, the demand implications are measured in the billions.

“It’s a way of getting back the vast majority of the oil market that soybean farmers have lost in recent years,” says Galloway.

With functionality in baking, cooking and commercial food production, soybean oil is making a major comeback in the food industry.

But wait, there’s more. Much, much more.

These checkoff-funded innovations in the fuel and food industries have turned oil into a shining star for soybean farmers. And it only gets better from here.

Soybean oil’s sustainability and versatility lend themselves perfectly to myriad industrial uses that open countless doors for new uses.

Sheldon Chesky is the CEO of Biospan Technologies, Inc., which has taken full advantage of soybean oil’s attributes.

“Soybean oil is a complex molecule, allowing us to use soy oil in intermediate as well as end-use functions,” he says.

Both intermediates, such as foams found in car seats and mattresses, and end-use products like lubricants hold the potential of even more demand for farmers.

“One area of growing potential in industrial applications is replacing petroleum uses across a whole host of varied industries,” says Chesky. “Soy’s simply a wonderful – and renewable – resource.”

USB is investing in tomorrow’s innovations today, aggressively pursuing opportunities to further diversify soybean oil’s portfolio and find the next large-volume use. Tomorrow’s farmers may look back and see high oleic and biodiesel as the tip of the iceberg for oil.

These unfolding success stories prove considering the compositional quality of soybeans, and measuring the value in each part of the bean, is how soybean farmers and the entire soy value chain win. The evidence is the serious value-driving punch oil packs for U.S. soybean farmers.

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