Assessing the Feasibility of Processing and Marketing Niche Soy Oil

Demand in the marketplace for foods with "natural" attributes, such as organic produce, continues to grow. Similarly, interest has developed in creating a technology that allows "physical" rather than chemical refinement of soybean oil to create a "natural" soy oil product. The physical refinement of non-genetically modified (non-GM) soybeans greatly strengthens the marketing claim to natural properties for that product. The oil derived in this manner, designated here as "niche soy oil," and its related inputs (non-GM soybeans) and by-products (high-energy non-GM soy meal) are the objects of our analysis. We find premiums of $0.03 to $0.43 per pound for niche soy oil compared to commodity soy oil. However, our price analysis suggests that only relatively optimistic combinations of premiums for niche soy oil, non-GM soybeans, and high-energy non-GM meal result in spreads above the estimated minimum economically feasible level.