Sourced from the 2005 growing season Cargill will process the low-linolenic soybeans designed by Monsanto.
The move marks a clear step from both firms to drive deeper into the growing market for trans fat alternatives, stimulated by incoming rules in the US that mean by 2006 food manufacturers will have to label on the nutritional panel all trans fats in food products.
Trans fatty acids (TFAs) are formed when liquid vegetable oils go through a chemical process called hydrogenation. Common in a range of food products - biscuits, chips, doughnuts, crackers - the hydrogenated vegetable fat is used by food processors because it is solid at room temperature and has a longer shelf life.
But research suggests that trans fats raise LDL (bad) cholesterol levels, causing the arteries to become more rigid and clogged. An increase in LDL cholesterol levels can lead to heart disease.
As a result, the food industry is gradually slicing out their use as more consumers look for alternative products and in the US food manufacturers will have to label any TFA content from January 2006. Europe has yet to impose such rules, but pressure is building from consumer-led organisations.
In a statement this week Cargill said it will contract Iowa growers for up to 50,000 acres of the Monsanto Vistive soybean brand, designed by the St.Louis-based firm that claims to have sunk more than $500 million into research last year.
"Cargill will pay a premium to producers who grow Vistive soybeans under contract, then it will crush and sell the processed soybean oil to food companies," said the Minneapolis-based firm that pulled in a 2004 profit of $1.28 billion (€1.04bn).
Sales growth for the vistive soybean oil is not only tied to the trans fat alternatives, but also to health concerns that are currently driving the market for soybean oil as ongoing research suggests soy not only lowers cholesterol, but can also have a preventative effect on breast cancer and other hormone-related cancers. Both the UK and the US have approved a health claim for soy.
Today, soybean oil - together with palm oil - accounts for over half of all oil consumed in the world. A recent report from analysts Business Communications Company suggests that US production of major crude vegetable oils is slated to reach 8.6 million metric tons in 2008, with soybean oil accounting for nearly 87 per cent of the major vegetable oil production at 7.4 million metric tons.
US consumption of fats and oils is projected to increase at an annual rate of 1.7 per cent, from 12.7 million metric tons in 2003 to 13.8 million metric tons in 2008.