If you listen to certain groups in the food industry right now, you may have heard claims that there are potential shortages or even rationing of edible vegetable oil. Some go as far as using this unfortunate fearmongering to suggest that Renewable Fuel Standard volumes for bio-mass based diesel (made from used cooking oil, vegetable oils, and animal fats) should be rolled back. 

Is there indeed a soybean oil supply crisis?

Very simply, no. The data does not support the alarm.

Harvest is currently underway for more than 86 million soybean acres, with U.S. farmers projected to produce a record soybean crop of over 4.4 billion bushels this year. From that record soybean crop will come a record amount of soybean oil available to meet both food and fuel needs. Growers are efficiently producing more per acre and meeting current demands. And, if the market signals for more soy next year, soy farmers are more than capable of responding. 

Not only are America’s farmers growing more soybeans using less land and energy per bushel, but also the soybean industry is gearing up to process more soybeans, thus ensuring adequate soybean oil is available for market needs. At least seven new oilseed processing plants are under development, and soybean oil production by our domestic processing industry is projected by USDA to reach a record level this year—on top of a 26% growth in supply over the last 10 years. In short, the markets are responding to the new demands.

Increased soybean crushing here in the United States has a beneficial side effect for U.S. consumers as well: An even greater supply of this less expensive protein is available for food production. When a soybean is crushed, about 4 pounds of soybean meal are produced for every pound of soybean oil, and that meal is an excellent source of protein for the animal food industry. As a result, ongoing industry expansion to meet soybean oil needs will reduce feed costs and, subsequently, lower meat prices for consumers if other factors remain equal.

The unfortunate fact is that prices have increased not only for soybean oil right now, but likewise for many products. Farmer input costs have rapidly increased. For example, fertilizer prices have approximately doubled this past year. Other parts of the supply chain downstream from the farm are also experiencing higher costs, with the producer price index for general freight trucking increasing by more than 20% in slightly over a year and barge freight costs on the Mississippi River about six times higher than just a few months ago. 

Attempting to pin the inflationary pressures impacting the food and agriculture sector across all cost categories solely on renewable fuels expansion is illogical. Doing so would only stifle our ability to reduce carbon emissions, could potentially increase protein prices for livestock producers, and would keep the market from adopting soybean processing expansion that would allow it to meet growing demand. This would hurt farmers’ ability to withstand the higher costs they, along with much of the world, are facing. 

Rather than create concern over edible soybean oil supplies, we encourage our food industry peers to recognize that America’s soybean growers are meeting current demands at the same time the soy industry prepares to meet even greater future demand for our versatile commodity—be that for food, feed, fuel or soy’s many other diverse uses.

There are numerous real challenges, both ongoing and developing, in food and agriculture. We are thankful soybean oil supply is not one of them and that every bit of each bean—whether meal or oil—can be used for America’s vital, evolving agricultural markets.

Stephen Censky is CEO of the American Soybean Association.

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