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Corn+Soybean Digest

Kraft Foods Shakes Ag

Kraft Foods' announcement that it will reformulate its products to help combat a national obesity epidemic is expected to shake the food industry to its core. But certain segments of agriculture, including corn and soybean growers, may not feel much impact.

Kraft — which counts Oreo cookies, macaroni and cheese dinners, and Ritz crackers among its many products — pledged to introduce smaller portion sizes and develop healthier, higher nutrition products.

Because Kraft is the world's largest food company and an industry leader, other segments of the food industry are likely to follow suit. These segments include snack food and fast food, says Rob Goldin, executive vice-president of Technomic Inc., of Chicago, a major food research and consulting firm. However, Goldin stresses that any changes are likely to come gradually.

Nonetheless, these changes could have an impact. For instance, if fast food restaurants shrink the size of hamburgers, cattle numbers could fall, and so could corn shipments to cattle feedlots. If restaurants cut the portions of French fries, the market for vegetable cooking oil could drop. And over time, the move to get America to eat less fatty foods could crimp the snack food market for products like corn chips.

Fortunately, both corn and soybean growers have emerging markets to pick up the slack. These include synthetic fuels and vegetable-based plastics. “We have so many ways to use corn,” says Fred Yoder, president of the National Corn Growers Association. If there is less demand for corn syrup, or less demand for corn oil by the fast food industry, the loss would soon be absorbed by demand for other products, including ethanol or PLA (polylactic acid) used to make plastic, Yoder predicts. “You can make anything out of PLA that you can from petroleum,” he says. “We look at that as a real opportunity for new uses for corn.”

Of course, there is the chance Kraft's initiative will fail as quickly as other efforts to curb American appetites. In that case, demand for food-based corn and soy products may continue unchecked. “Let's look at history,” says Kim Nill, technical issues director for the American Soybean Association. “Do you remember the McLean sandwich? That burger is gone.

“Every time they made one of these health proclamations, there were predictions that there would be big changes in the American diet,” Nill says. “History points out otherwise.”

But if Americans do cut back on burgers and French fries, Nill says the soybean industry is ready to provide healthy products made from soy. Says Nill, “If and when this diet change comes, we'll be glad to sell them tofu, edamame and soy burgers.”

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