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Export Programs Increase Sunflower Product Sales

Friday, January 1, 2010
filed under: Utilization/Trade

By John Sandbakken

There are, at present, approximately 6.77 billion residents on our planet. (If you think that’s a lot, wait until the year 2040, when there will be around 9 billion!) About 300 million of those 6.77 billion people live in the United States, so there’s obviously a huge market outside our borders waiting to buy our agricultural products — including sunflower oil, seeds and kernel.

To make sure this happens, all we need do is lay the groundwork to start selling our products to them. Easier said than done, right?

The National Sunflower Association (NSA) can’t do it alone, so we have partnered with USDA’s Foreign Agricultural Service (FAS) to develop export markets for U.S. sunflower products. The FAS role is to work with the U.S. agricultural community in promoting the growth of overseas markets for U.S. agricultural products. This public/private partnership, ongoing since 1977, is vital to the continuing development of new markets and the maintenance of developed markets for U.S. ag products.

Key confection sunflower export markets include Spain, Germany, Turkey and Mexico. Canada and Japan are the top markets for U.S. sun oil. According to the U.S. Bureau of Census, exports of U.S. sunflower products have more than doubled across the past six years, from just over $110,000,000 in 2003 to almost $250,000,000 in 2009. Export sales account for 42% of the total value of U.S. sunflower production.

The National Sunflower Association has used FAS funds, grower checkoffs and industry dollars to help achieve this increase in sales. Every farmer checkoff dollar invested in export market development gets matched by $10 in USDA-FAS funds. NSA receives about $1,600,000 FAS dollars each year.

Another key relationship is the FAS market intelligence around the world. The agency has personnel stationed in most U.S. embassies. They continually assess market opportunities for U.S. exports and provide key insight for groups like the NSA. This market intelligence also relates to potential trade issues. Their diplomatic status gives them the authority to contact the host government about issues that may be limiting U.S. sales. This has proven to be an invaluable service through the years.

With domestic demand keeping NuSun sunflower oil prices at a reasonable premium to world sunflower oil values, the U.S. industry has decided to target markets that are closer to home and able to pay for our higher-value refined sunflower oil.

One such market is Canada. There is a segment in the Canadian market that has indicated strong interest in NuSun — despite the likelihood that NuSun will sell at a premium to existing sunflower oil.

According to research conducted in 2005 and 2007, NuSun has an attractive opportunity in the food processing and foodservice industries in Canada. Canadian food labeling requirements use a combination of trans fat and saturated fat content of oil when calculating fat per serving. Being trans fat-free and low in saturated fat, NuSun fits the bill for meeting a healthy profile.

Exports of U.S. sunflower oil to Canada for this marketing year were up 28% over last year’s level, finishing at 77,071 metric tons. (The old record of 60,099 metric tons was set last year.) NSA has been conducting a promotional campaign using FAS funds for more than four years, targeting food processors and foodservice personnel to create sales of U.S. sunflower oil. Exports have grown from 19,500 metric tons to the present level of more than 77,000 tons since the campaign began.


The United States is a major global supplier of confection sunflower. Germany and Spain remain the most prominent customers for U.S. confection sunflower products. The Germans import a large amount of sunflower kernel, which is used to make sunflower kernel bread — a very popular product in that European nation. Germans also use sunflower kernel in breakfast cereals, in confectionery products and as an ingredient in a variety of foods such as vegetables, yogurt and soup. While Germany is the major market for sun kernel, other European nations (e.g., Denmark and the Netherlands) have similar kernel consumption habits. NSA uses FAS funds on regulatory issues related to the German market to help maintain U.S. market share.

Competition for the sale of sunflower kernel in Germany has increased within the past few years, with the main competitors being China, Hungary and Poland. Chinese exporters have made the most significant inroads in a market that had been dominated by U.S. exporters. To compete, U.S. exporters are positioning themselves as reliable suppliers of high-quality sunflower kernel with impeccable customer service.

Spain’s needs are different, as the Spaniards primarily buy sunflower seeds in the shell. As in the U.S., roasted and then salted in-shell sunflower seeds are a popular snack food in Spain. Spaniards are very particular about the quality of what they purchase and typically buy large confection sunflower in-shell (commonly called “22/64” size). The U.S. seed industry invested a good deal of time and money developing long in-shell hybrids for this market.

Young people ages 10 to 25 are the main consumers of sunflower in-shell, although other age groups also consume them on an occasional basis. Spain produces only a small amount of confection sunflower seed, so is highly dependent on imports to satisfy its needs.

Currently the largest export market for U.S. confection sunflower in-shell, Spain has been a fairly stable buyer, with annual U.S. exports of 24,000-32,000 metric tons since 2002. Sunflower kernel also is used in Spain as a snack and food ingredient. Kernel imports have tallied over 2,000 metric tons in each of the past two years.

Competition remains strong in the Spanish market for the sale of confection sunflower in-shell, with our main competitors being Argentina and Israel. Eastern European countries could also be competitors down the road. With this as a backdrop, FAS funds are critical to achieving NSA’s long-term strategy in Spain to increase the export of U.S. confection sunflower in-shell and kernel and build U.S. market share. The NSA will continue to use FAS program funds to promote the sale of roasted in-shell seeds and kernel to consumers, to create sales of raw in-shell to Spanish importers, and to foster the development and introduction of products containing sunflower kernel.

NSA also targets potential growth markets. Mexico’s nearly 100 million-strong population is markedly young. Population and purchasing power are increasing, representing a growing market. Market research conducted by NSA indicates that consumers are willing to try new products such as kernel, so Mexico has the potential to become a good kernel market.

There are essentially 10 ways that confection sunflower kernel is available to consumers in Mexico: in bulk, packaged as a snack, as a component in a major snack, as a sweet snack, and in bread; in other baked goods, in cereal, as an imported salad topping, in some “mole” sauces, and as an ingredient in healthy drinks.

The fastest growth in Mexican consumption is in snack foods. NSA market development activities are using a two-pronged effort of getting food processors to introduce products using kernel, and building consumer awareness that leads to initial product trial and purchase. Sales of kernel have been modest up to this point, but the potential for increased export sales is exciting. FAS program dollars will be a key component in achieving success in this potential growth market.

Exported sunflower products are a value-added product, with processing facilities located in rural locations of Colorado, Kansas, Minnesota, North Dakota, South Dakota, Oklahoma and Texas. Not a seed leaves these states without being further processed.

Every billion dollars in U.S. agricultural exports supports nearly 12,000 American jobs, according to USDA. Export sales of sunflower products represent 3,000 jobs in these states. Exports give balance to the overall market, expanding business and in turn improving farm income. It’s a big world out there with a lot of people. Finding the right markets and developing those markets will be the key to success for the U.S. sunflower industry.

U.S. sunflower product exporters will continue to face increasingly strong foreign competition supported by government-sponsored activities in our key markets. This makes the USDA-FAS programs vital to maintaining and expanding markets for sunflower products. USDA-FAS will be a vital partner if we are to be successful. It is a unique private sector/public sector arrangement that has worked extremely well.

John Sandbakken is marketing director for the National Sunflower Association.

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