A method of making a hydroxyl terminated precursor for polyurethane is disclosed. The method comprises heating a vegetable oil-polyol mixture of modified vegetable oil containing about two or more hydroxyl groups per molecule and a polyether polyol having about two or more hydroxyl groups per molecule at a temperature of at least about 25 degrees Celsius and at a pressure of about 1 atmosphere. The mixture has a hydroxyl equivalent ratio of about 1:1 vegetable oil to polyol. The method further comprises mixing for at least about 10 minutes an isocyanate containing about two or more isocyanato groups per molecule at least about 25 degrees Celsius to the vegetable oil-polyol mixture at a molar equivalent ratio of at least 2:1 vegetable oil-polyol mixture to isocyanate to react the isocyanate with the mixture to form the hydroxyl terminated precursor.