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Sunflower oil markets may experience future growth

After the Food and Drug Administration (FDA) announced it would be banning partially hydrogenated oils (PHOs) from food products, the sunflower industry in South Dakota is hopeful sunflower oil will take its place in food products.

After the Food and Drug Administration (FDA) announced it would be banning partially hydrogenated oils (PHOs) from food products, the sunflower industry in South Dakota is hopeful sunflower oil will take its place in food products.

South Dakota had the highest amount of sunflower production in the country for 2015, producing more than 1.2 billion pounds of sunflowers, according to the United States Department of Agriculture.

In June 2015, the FDA determined PHOs as "not generally recognized as safe." PHOs are manufactured trans fats, which the FDA has linked to coronary heart disease. The agency gave food companies a compliance period of three years to remove all PHOs from their products and "reformulate" them or petition the FDA for specific uses of PHOs.

This could be good news for South Dakota's sunflower market since sunflowers are a stable substitute.

"I think it opens up some opportunities for the sunflower industry, because it is an oil that does not have to be partially hydrogenated to be stable to be used in food products," said John Sandbakken, the executive director of the National Sunflower Association (NSA). "So, it really opens up a new set of opportunities for us solely for sunflower oil or in a blend that would need that extra stability."

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The state's conditions are conducive to growing good, high-yielding sunflowers, Sandbakken said. But, there are still other oils that could potentially replace the partially hydrogenated oils.

It is because of this that Rick Vallery, the executive director of the South Dakota Oilseeds Council, said the industry does not know how it will be affected.

"We're just kind of in wait-and-see mode to see how it affects markets," Vallery said. "You would think it would, but we don't know."

Vallery said the increase in the sunflower market has been through exports of oil and confectionary sunflowers while bird seed has also remained as a strong market.

Sandbakken said other potential replacements could include canola oil, corn oil or palm oil, though they are higher in saturated fats than sunflower oil.

Safflower and soybean oil are also contenders, Vallery said.

"The other side of that is the soybean industry has already come up with an oil that has lower hydrogenated fat," Vallery said. "So, the soybean industry is already trying to protect its own market share. That's why we don't know how much (the ban is) going to affect sunflowers."

A good example of this is Nestlé. Liz Caselli-Mechael, the manager of corporate communications at Nestlé, said the company is in the process of removing trans fats from its products and has replaced the trans fats in Coffee-mate with high oleic soybean oil.

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But, Sandbakken remains optimistic that sunflower oil markets will increase.

"Any time you gain more customers, you obviously have to sell more oil, so it adds to the potential for growing more acres," Sandbakken said. "Being a good alternative for replacing partially hydrogenated oils makes it more of a premium oil and then that translates to better prices for growers."

Sandbakken said the National Sunflower Association has been conducting a domestic campaign to promote the sunflower industry through various publications.

Since the announcement from the FDA and the efforts of NSA's advertising campaign, Sandbakken said he believes some major companies have been looking at sunflower oil as an alternative.

"It's definitely on everyone's radar," Sandbakken said. "Some have probably already converted to other oils and others are still deciding which route they're going to go."

Sunflower oil is competitive because, unlike other oils, it has a lower percentage of saturated fat. Palm oil, for example has about 50 percent saturated fat, Sandbakken said. Linoleic varieties of sunflower oils have about 11 percent saturated fat and high oleic have six to seven percent.

"One thing we've found in any of the research is people want to eat the same amount of food, they just want it to be better for them," Sandbakken said. "(Sunflower oil) fits the bill for that."

Because of the consumer demand for a healthier product, Sandbakken said the industry is following suit and changing to meet the "commands of the consumer" by converting acreage from linoleic varieties of sunflowers to high oleic.

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But, like Vallery, Sandbakken said he does not know how much the sunflower industry will increase.

"I'd love to say 100 percent," Sandbakken said. "But that market will have to shake itself out."

Related Topics: AGRICULTURE
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