NuSun Sunflower Oil: Redirection of an Industry

Abstract

In 1995, leaders in the US sunflower (Helianthus annuus L., Asteraceae) industry took a long hard look at the future and determined that it could no longer depend on export markets of sunflower oil as the primary market outlet. Up to this time, more than 80% of the market was export-dominant. This was largely due to strong demand from Mexico for this preferred oil. North African countries also preferred sunflower oil and often paid considerable price premiums. However, in the decade of the 1990s, most of these countries eliminated their government-buying agencies in favor of the private market. The private sector quickly determined that cheaper oils could satisfy customer demand if other alternatives were not available. In the meantime, Argentine and East European sunflower production increased. All of these factors put considerable pressure on world sunflower oil prices. United States industry leaders recognized this competition was not likely to abate in the near future. Furthermore, being one of the cheapest oils in the world market was not going to sustain a consistent sunflower crop area base in the US. The domestic market for sunflower oil has always intrigued the sunflower industry. However, sunflower oil did not have anything particularly unique for domestic users. Traditional sunflower oil consists of 68% linoleic acid (C18:2) and about 20% oleic acid (C18:1). Linoleic acid is well recognized as a healthy and desirable fatty acid. But the US produces a number of oils with high levels of linoleic acid. The most predominant is soybean [Glycine max (L.) Merr.] oil. This oil dominates the domestic market. It is always available and is generally the least expensive oil on the market. And there is corn (Zea mays L.) oil. It has been in the domestic market a long time, has been heavily promoted and is one of the domestic icons. It is also similar to soybean and sunflower oils with lots of linoleic acid. So unfortunately for sunflower oil, there simply was not room in the domestic market for another “look-alike” linoleic oil. That is unless the price of sunflower oil would consistently be priced at or below soybean oil levels (Kleingartner and Warner 2001). Oil drives the value of sunflower. It is a high oil content seed of 40% or more. Low sunflower oil prices severely impact the price of seed to the farmer resulting in reduced sunflower plantings. Soybean is an 18% oil content seed. It obtains most of its value from protein. Soybean oil is often a by-product and can, therefore, be sold at a discount without as much pain to the producer. Corn oil is a total by-product of other industries and can also be sold at discounts if required. So the domestic market did not provide a “friendly environment” for sunflower oil when it was introduced in the 1970s.