Soy industry: Replacing seed oils raises food prices, boosts palm oil

Removing soybean oil and other seed oils from food products would force the industry to rely on imported palm oil to fill the gap, driving up consumer prices, according to a study funded by the United Soybean Board.

Adherents to the “Make America Healthy Again” movement blame seed oils for health problems.

Under a scenario where U.S. usage of fats and oils remains flat, 53 pounds of palm oil per capita would be used to compensate for most of the 58 pounds per capita of seed oil that would be lost. That much palm oil would increase global palm production by 3.3 million acres.

Tallow would also help make up for the loss of seed oil, but tallow and palm oil can’t be used in products such as salad dressing since both are solid at room temperature.

The Consumer Price Index for fats and oils would increase by nearly 29%, costing $7.7 billion, or 43%, more per year.

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The study, conducted by World Agricultural Economic and Environmental Services, also found that the loss of the food oil market would depress soybean prices and production. Soybean prices would fall by an average of 3% per year and farmer returns would decline by 7% a year. Soybean production would be reduced by 2.8 million acres.  

“Simply put, there is not enough production,” Scott Gerlt, chief economist for the American Soybean Association, said in a statement.

“Fats are largely a byproduct of meat production and represent only a small share of the value of the processing. Capacity to produce tallow is also limited, even if the value of the fats increased significantly. For lard, over 80% is already used in food and 30% of white grease currently goes to food.”

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