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Abstract

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.

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