US seed oil ban would have devastating impact on farms and consumers, new study says – Oils & Fats International
A seed oil ban in the USA would have a devastating impact on US farmers and consumers, a new study has found.
Seed oils have come under increasing public scrutiny since the appointment of Robert F Kennedy Jr as the US Secretary of Health. He has accused seed oils of causing a range of illnesses and health conditions and has raised the idea of banning the most common oils.
The new study, funded by the United Soybean Board and conducted by the World Agricultural Economic and Environmental Services (WAEES), says that such a ban would devastate the US seed oil industry and significantly reduce consumer choice.
The US seed oil industry – including soyabean, canola, corn, cottonseed, grapeseed, rice bran, safflower and sunflower oil producers – would see a major drop in domestic consumption, which could be replaced by imported palm oil, the study noted.
Meanwhile, it would be problematic for consumers to find direct replacements for specific seed oil products that satisfied the same nutritional, availability, allergy and end use attributes without a significant increase in cost.
Caleb Ragland, president of the American Soybean Association (ASA) and a soyabean farmer, said the study “simply confirms what we already knew.”
“A ban on seed oils, including soy, is going to have costly impacts for farmers and costly impacts for consumers – and I don’t just mean in the wallet. There is the potential here that we lose consumer choice based on conjecture, and that should not be something we condone in the USA or anywhere, for that matter,” Ragland stated.
WAEES, which carries out agricultural supply and demand projections on a 10-year timescale, identified two possible scenarios from a potential US ban on seed oils.
The first scenario assumed that U.S. oils and fats consumption would remain steady, with consumers opting for other available fats.
However, this scenario did not take into account that many seed oils cannot be directly substituted by other fats due to nutritional and chemical differences.
The steady-consumption scenario would see the annual 58-pound (26.3kg)/capita seed oil consumption replaced by imported palm oil, which would lead to a projected 1.3M ha increase in palm oil planted area.
As a result, WAEES saw this situation leading to consumers spending an additional US$7.7bn/year on vegetable oils and fats, marking a 43% increase.
The second scenario took substitution difficulties into account and assumed consumers would not be willing to spend more than 8% on fats and oils.
This would lead to a significant reduction in seed oil consumption, which was projected to fall from 58 pounds (26.3kg)/year to 21 pounds (9.5kg)/year, leading to a 35% increase in the Consumer Price Index (CPI). The WAEE did not include details of possible public health effects.
In both scenarios, the lower vegetable oil and fat consumption resulting from a seed oil ban would lead to farm losses for producers, and higher costs and fewer options for consumers.
Soyabean prices would fall more than 3%/year while farmer returns would decrease by approximately 7%, the study said.
Overall cash crop income would plummet by US$3bn/year and farm incomes would fall by US$2bn/year, while soyabean planted area would drop by more than 1.1M ha/year.
As a result, consumer meat supplies would drop by more than 12 pounds (5.4kg)/year, as lower soyabean meal supplies would lead to higher animal feed prices.
According to Dr Scott Gerlt, ASA chief economist, says replacing seed oils with other options is simply not feasible due to insufficient US production.
“Fats are largely a by-product of meat production and represent only a small share of the value of 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,” Dr Gerlt said.
Kennedy has called the most commonly-used vegetable oils, which he has dubbed seed oils, the “hateful eight,” claiming they’re responsible for causing inflammation, obesity, diabetes, and other health conditions.
The US Food and Drug Administration (FDA) does not agree with Kennedy’s view and has produced studies demonstrating the health benefits of moderate vegetable oil consumption.
