Edible Oils Manufacturing Industry Profile

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.

The US edible oils manufacturing industry includes about 200 companies with combined annual revenue of about $65 billion. The industry is expected to grow at a slow rate over the next two years. Key growth challenges include dependence on government support and competition for raw materials from the livestock and ethanol industries.

The edible oils manufacturing industry doesn't include companies that render or refine animal fats, wet-mill corn into ethyl alcohol, or mill-dry corn for flour.

COMPETITIVE LANDSCAPE

Demand is driven by consumer trends in consuming sweeteners, fats, and food oils, and in eating meat, since soybean meal is used primarily 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 industry is highly concentrated: the eight largest companies account for about 80 percent 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 ...