Global demand for vegetable oil and meal to supply feed, food, and fuel is pushing oilseed processors toward expansion and improved efficiency in 2024. High prices and increasing demands are driving investments in bigger, better oilseed processing plants around the world as facilities try to keep pace with ongoing growth.
Wrapping up 2023 with an estimated value of $303.7 billion, the global oilseed market is expected to grow 6% annually to reach $513.1 billion in value by 2032, according to some projections. Crushing accounts for 90% of worldwide oilseed usage, and this crush demand is increasing faster than the demand for other uses, including direct consumption by humans (food) and animals (feed).
To stay ahead of this growth, oilseed processing equipment manufacturers like Anderson International are continuing to innovate new solutions to help processors optimize their systems, boost yields, cut operating costs, and maximize profits. With these goals in mind, here are the top four industry trends we’re watching in 2024.
1. Pursuit of protein
Historically, the animal feed sector has accounted for the largest share of protein byproducts from oilseed processing. Some industry insiders predict that the human food sector will demand more protein products, like texturized soy protein, in the future to meet the increasing desire for alternate protein sources.
Within this trend, we see a growing market niche for organic protein sources, like organic soybean meal, to satisfy the needs of health-conscious consumers. This demand for natural, organic products (both oil and meal) will shift the focus away from chemical extraction toward chemical-free mechanical pressing instead.
Producing high-quality end products with higher protein content and maximum oil yield requires certain processing steps and equipment, especially when offering organic alternatives. Embrace these changes now to position your plant for shifting consumer demands in 2024 and beyond.
2. Rise of specialty seeds
In a market punctuated by fluctuating oilseed prices and supplies, diversification is critical. This means we’re seeing more oilseed producers and processors exploring new specialty seeds to fill the gaps between other markets they serve. Processing less-common oilseeds like camelina, safflower, flaxseed or mustard seed can keep a facility nimble when commodity markets like soy or canola take a hit.
To key to diversified oilseed processing is having flexible multi-seed crushing equipment that can easily handle different materials with minor modifications. The right equipment can keep a plant nimble when switching between smaller volumes of specialty seeds throughout the growing season. For example, the Anderson Super Duo Expeller® is a versatile press that can efficiently process a wide range of stubborn specialty oilseeds including corn germ, copra, palm kernel, and grapeseed.
3. Undisputed soy dominance
Despite the growth of niche seed markets mentioned above, soybean still dominates the oilseed processing industry—and likely will for the foreseeable future. Soybean crush is expected to grow by 45 MT in the next 10 years, reaching 70 MT of soybean oil production according to the Organization for Economic Cooperation and Development (OECD) Food and Agriculture Organization (FAO) Agricultural Outlook.
The U.S. soybean crush for 2023-24 is expected to be about 2.3 billion bushels, up 90 million from the previous year. Although the U.S. soybean output for 2023-24 is expected to total about 113 million MT—which has been the annual average for the past decade—some industry analysts estimate that U.S. growers will plant at least 6 million additional acres of soybeans in 2024 to meet growing demands for vegetable oil.
While the soy oil market revolves around large-scale solvent extraction plants, we see plenty of opportunity for mechanical processing plants of all sizes. For example, the organic soy market depends on chemical-free processing that can only be achieved with mechanical expeller presses. This gives mechanical processors a chance to set their operations apart from much larger competitors.
4. Fueled by biofuel
The rising demand for sustainable, renewable fuel sources is driving the popularity of biofuel. Vegetable oil’s use as a feedstock for biodiesel currently makes up 10-15% of global vegetable oil usage, according to the OECD-FAO, and is projected to grow—especially in countries like the U.S., Indonesia, and Brazil.
Subsidies, tax benefits, and regulations are helping to “fuel” this trend. For example, the Environmental Protection Agency (EPA) recently issued a final rule on renewable fuel requirements for 2023-2025, increasing renewable fuel volumes to 22.33 billion gallons by 2025, including 3.35 billion gallons of biomass-based diesel.
Specifically, the USDA projections indicate that 12.5 billion pounds of soybean oil will be used for biodiesel during the 2023/24 marketing year, which is an increase of nearly 8% over 2022. The use of soybean oil for biodiesel as a percentage of total consumption surpassed the use of corn for ethanol in 2020 and has continued to rise since then.
Staying ahead of oilseed processing trends
To keep up with these evolving trends and increasing demands for vegetable oil and meal, processors will have to expand their production capacities while improving quality and efficiency. Every step of the oilseed processing system can be optimized to achieve these goals—from selecting the best quality seed material to properly conditioning the seeds for optimal pressing and using the right extraction equipment to separate the oil from the meal.
Emerging technologies are constantly providing new solutions to help processors fine-tune their systems and perfect their products. For example, automation is being used to accurately identify heat-damaged seeds using near infrared spectroscopy (NIR) or hyperspectral imaging (HIS) instead of sorting seeds manually based on color differences, which can be subjective and time-consuming.
Likewise, new pre-treatment technologies are being explored to improve the yield and quality of oil extraction. Microwave irradiation and pulsed electric fields could be energy-efficient alternatives to conventional heating treatments. Processors are always searching for more efficient conditioning solutions to prepare oilseeds for pressing. Instead of using stacked cooking and drying vessels combined with flaking mills, for instance, more and more processors are replacing these expensive installations with a more streamlined solution like the Dox™ Extruder that simultaneously shears, cooks, and dries seeds in a single multifunctional machine.
Whatever changes, challenges, opportunities, and trends 2024 brings to the oilseed processing industry, the one constant you can count on is Anderson’s steadfast commitment to our clients.
Contact us to learn more about what processors can expect in the coming years and how you can stay competitive among the competition.