Companies in this industry manufacture oils through wet-milling corn (separating corn into its basic components); processing soybeans, tree nuts, and vegetables into oil; refining vegetable fats; and blending vegetable fats with purchased animal fats. Major companies include Archer Daniels Midland, Bunge, Cargill, CHS, and Ingredion, all based in the US; as well as Avril Group (France), COFCO (China), GrainCorp (Australia), Nisshin Oillio (Japan), and Ruchi Soya (India).
Demand is driven by shifting consumer attitudes toward different types of sweeteners, fats, and food oils; as well as livestock production trends, as soybean meal is used to feed poultry, swine, and cattle. The profitability of individual companies depends on managing raw material costs, leveraging federal farm subsidies, and operating efficiently. Large companies have advantages in purchasing, distribution, and marketing. Small operations can compete effectively by serving a local market or offering specialized products. The US industry is highly concentrated: the eight largest companies account for about 75% of industry revenue.
Products, Operations & Technology
Major products include soybean cake and meal; shortening and cooking oils; and corn sweeteners. Other products include margarine, butter blends, butter substitutes, and soybean oil.