Overview

In nearly twenty years since the publication of Designing Value-added Soybeans for Markets of the Future (Wilson, 1991) a number of legislative actions have stimulated the development, commercialization and promotion of trait modified vegetable oils by the U.S. soybean industry. Efforts to genetically modify commodity oil composition are a response to consumer demand for dietary ingredients that improve health and nutrition. In addition, separate legislation has enabled the emergence of the biodiesel industry, which also may benefit from trait modified oils. In the early 1990s trait modified oils were just beginning to be developed by plant breeders and geneticists, but the germplasm was not ready for commercialized production. However, by the mid 1990s, low linolenic acid soybean oil and mid-oleic sunflower oil were commercialized. Low-linolenic soybeans became a $500 million/year crop, and virtually the entire U.S. sunflower crop was converted to the mid-oleic (NuSun™) trait (Miller et al., 1987; Gupta, 1998). As with any new product, the initial supply of these crops was low even though premiums were paid to farmers (Krawyzyk, 1999). However, in 1990 the U.S. Congress passed the Nutrition Education Labeling Act (NELA) and, after some 13 years, the final rules were published (Food and Drug Administration, 2003). Key provisions included the listing of trans fats on nutrition labels effective January 1, 2006. Foods containing less than 0.5 grams trans fat/serving could be declared zero. As a result of this ruling, trait modified oils began to take on increased importance to the food industry because they offered a trans fat free alternative for many food applications including cooking/salad oils, baking, deep fat frying and snack foods. This chapter reviews the changes in market dynamics for the U.S. soybean industry during the past two decades that are associated with shifts in federal agricultural and food policies, the impact of those policies on consumer trends in consumption of soybean and soybean products, and the application of useful research technology in response to consumer demand for affordable, nutritious, and high-quality food and industrial products from soybeans.

Discussion

The Market Situation for Soybeans and Soybean Products

The major oilseeds in global trade include soybean, cottonseed, peanut, sunflower, rapeseed, canola, coconut and palm. Over the period 2001 to 2009 world-wide production of oilseeds increased from 325 to 419 million metric tons (MMT) with soybeans increasing from about 185 to 242 MMT. Production of vegetable oils increased from 96 to nearly 137 MMT. Soybean oil production increased from about 31 to over 37 MMT from 2001 to 2009. Thus, soybeans accounted for about 36% of the worldwide production of oilseeds and 27% of the world’s oil. Worldwide production of protein meals during the period 2002 to 2009 increased from about 185 to over 237 MMT. Soybeans supplied about 65–70% of all oilseed protein meal during that period.

From 1990 to 2009, U.S. soybean production increased from 1.9 to 3.4 billion bushels. During that period domestic crush increased from 1.2 to 1.7 billion bushels. Exports of U.S. soybeans increased 684 to 1420 million bushels. It is apparent that over the past 20 years that both production and export of U.S. soybeans have grown dramatically even as the farm-price for soybeans has risen from record low to record high levels. During the period 1990–2006 prices ranged from about $5 to $6 per bushel. During the past three years prices increased to the $9 to $10 per bushel range. The escalation in soybean value is attributed to increased worldwide demand for U.S. soybeans coupled with the emergence of the biodiesel industry, both domestically and internationally. However, there can be no doubt that specific governmental legislative acts catalyzed a new era in the economic growth of the U.S. soybean industry.