About 97 of soybean oil is used in food with the balance used in industrial

About 97 of soybean oil is used in food with the

This preview shows page 176 - 178 out of 212 pages.

About 97% of soybean oil is used in food with the balance used in industrial applications. Food uses include margarine, shortenings, and mayonnaise. Today, there are roughly 90 soybean crushing facilities in operation in the United States. Like the flour milling and wet milling industries, the past 20 years have been marked by rapid consolidation of the companies. Among the largest soybean crushers are ADM, Cargill, CHS, Bunge and AGPl. In 2008, Bunge expanded the crush capacity of its soybean processing plant in Council Bluffs, Iowa to 77 million bushels annually (220,000 bushels per day, assuming 350 operating days each year). At that time, it was generally recognized as the largest crush facility in the U.S. It is important here to distinguish between soybean crushing and oil refining. Plants involved in these activities represent two different levels of processing, which today are often consolidated at a single sight. To clarify, a soybean crushing plant produces crude soybean oil. A vegetable oil refining plant takes that crude oil and further refines it into the products consumers purchase including salad and cooking oils. An oil refinery can and will take in crude oil from other sources (e.g. corn oil from the wet milling industry, canola oil and sunflower oil from other crushing plants, etc.). With the interaction of several distinct markets - exports, oil, and feed - measuring and characterizing the nature of soybean demand is not simple. When compared to flour milling or ethanol production, soybean crushing exhibits a unique twist in that the process creates two primary products, often called co-products, of nearly equal value and impact on processing margins. According to USDA estimates, the long term meal and oil "share of value" in crushing is split about 60%/40%, respectively. While the actual share of value will change from year to year, rarely has the oil share of value exceed meal.
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177 Applied Economics 3411/5411, 2018 Lecture Notes Copyright © 2018 Edward Usset. All rights reserved. Contrast this with flour milling, where the value of flour generates more than 80% of total revenues, with the balance generated by millfeed and bran sale. In corn wet milling too, processing revenues are overwhelmingly generated by one product, either starch, syrups, or ethanol. The purpose of a flour mill or wet corn mill is defined by that single product, with one or several byproducts playing an important, but decidedly secondary, role. By producing two primary products, soybean crushing reaches a different level of complex and the conditions that create a successful environment can differ greatly from one year to the next. When compared to other oilseeds, soybeans are unique in another regard - in most other oilseeds, the oil makes up a larger share (and meal a smaller share) of the total value because (1) most other oilseeds contain a higher percentage of oil than soybean's 18%, or 11 pounds of oil in a 60-pound bushel, and (2) soybean meal commands a premium due to its higher protein content and quality.
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