Connections 2012 Identifying Game Changers in the U.S. Soy Industry

Panel: Human Utilization of Soybean Oil

Robert M. ReevesDirector of Public Relations, QUALISOY

December 5, 2012

Potential Game Changer #1

Introduction of Trait Enhanced Soybean Varieties

● High Oleic Soybean Varieties● Oil improves healthfulness/safety

● Trans fat alternative (no hydrogenation)● Saturated fat reduction (20-60%)

● Oil improves functionality in foods● High oxidative stability

High Oleic Soybean Oil Availability

● Introduced in 2005● Test quantities provided in 2010-2012● Commercialization in 2013

● High stability facilitates extended exposure to heat (deep frying) and extended shelf life in packaged foods (snack foods)

● Increased flavor retention in foods cooked in HOSBO

● May be blended with other vegetable oils to achieve desired functionality and flavor

● Applications: deep frying, baking, pan release and spray oils

● High stability may have significant industrial use applications

High Oleic Soybean Oil (HOSBO) Functionality

Potential Game Changer #2

Labeling of Foods Derived from Genetically Modified Plant Varieties

● California Proposition 37 (defeated 53-47% on 11-6-12)

● Other states considering similar legislation● Legal challenges to foods claiming to be

“natural” while containing GM ingredients (Goldfish lawsuit, Colorado)

High Levels of GM Food Crops in U.S.

● Soybeans: 93%● Corn: 88%● Packaged foods

containing ingredients from these two sources estimated to be over 75%

Source: Sustainable Food News

Effects of GM Food Ingredient Labeling

● Affects large amounts of food ● One state passage

problematic for interstate commerce

● Virtually all foods labeled as “GM” may result in consumers being “immune” to labeling

● Likely to stimulate “non-GM” food sector growth

● Lawsuits targeting food industry likely

Repeal or change in Renewable Fuel Standard (RFS2)

● Federal government mandate for biofuel production

● Soy biodiesel portion● 1 B gallons in 2012● 1.28 B gallons in 2013

Potential Game Changer #3

Soybean Oil as Source for Biodiesel (methyl esters)

Source: University of Iowa

Year Amount (B lbs.)2010-11 2.7

2011-12 4.6

2012-13 5.4

Soybean Oil Feed Stock as Percent of U.S. Soybean Crush

Year Percent2010-11 14.5

2011-12 23.5

2012-13 30.7

Source: University of Iowa

Soybean Oil as a Percent of Domestic Food and Non-Biodiesel Use

Year Percent2010-11 19.5

2011-12 35.5

2012-13 44.0

Source: University of Iowa

Challenges to Sustainability of Biofuels

● High price of feed stocks● Adequacy of infrastructure● Effects on other markets

(food prices)● Soybean oil feed stocks

likely to level off (5 B lbs) due to economics of using lower priced feed stocks (animal fats, used vegetable oils)

Summary

● High oleic soybean varieties anticipated to be successful for food and industrial use

● Mandated labeling of GM food ingredients could be problematic for soy-containing foods

● Biofuels market health important to soy industry

Questions?

Thank You!