Study Warns US Seed Oil Ban Would Devastate Farmers and Consumers

A new study has found that a ban on seed oils in the United States would have a devastating impact on American farmers and consumers.

Public scrutiny of seed oils has intensified since Robert F. Kennedy Jr. was appointed US Secretary of Health, after he accused these oils of causing a range of diseases and health problems and proposed banning some of the most widely used varieties.

The study, funded by the United Soybean Board and conducted by World Agricultural Economic and Environmental Services (WAEES), found that such a ban would severely damage the US seed oil industry and significantly narrow consumer choice.

The US seed oil industry encompasses soybean oil, canola oil, corn oil, cottonseed oil, grapeseed oil, rice bran oil, safflower oil and sunflower oil. The study indicates that a ban would lead to a sharp decline in domestic consumption, with imported palm oil likely to fill the gap.

The study also noted that it would be difficult to find direct substitutes for seed oils that match them in terms of nutritional value, availability, allergen considerations and end uses without triggering a significant rise in prices.

Caleb Ragland, president of the American Soybean Association (ASA) and a soybean farmer, said:

"This study simply confirms what we already knew. Banning seed oils, including soybean oil, would have costly consequences for farmers and consumers — and not just financially. There is a real risk that we could lose consumer freedom of choice based on unproven assumptions, and that should not be acceptable in America or anywhere else."

The study outlined two possible scenarios should a ban be implemented:

Scenario One: Stable Consumption

• Assumes Americans continue consuming the same volume of oils and fats, but from alternative sources.
• Annual per capita seed oil consumption of 58 pounds (26.3 kg) would be replaced by imported palm oil.
• This would drive an increase of an estimated 1.3 million hectares in global palm oil planted area.
• Consumers would be expected to spend an additional $7.7 billion a year on vegetable oils, a rise of 43%.

Scenario Two: Consumers Refuse to Pay Higher Prices

• Assumes consumers will not accept an oil price increase of more than 8%.
• This would lead to a sharp drop in seed oil consumption, from 58 pounds (26.3 kg) to 21 pounds (9.5 kg) per year.
• This would result in a 35% rise in the Consumer Price Index (CPI).
• The study did not address the potential health effects of this scenario.

Economic Outcomes Under Both Scenarios:

• Soybean prices would fall by more than 3% annually.
• Farmer profits would decline by roughly 7%.
• Cash crop income would fall by $3 billion a year, with farm household income down $2 billion annually.
• Soybean planted area would shrink by more than 1.1 million hectares per year.
• Meat supplies to consumers would fall by more than 12 pounds (5.4 kg) annually, driven by higher feed costs resulting from reduced soybean meal output.

Dr Scott Gerlt, chief economist at the American Soybean Association, said replacing seed oils with alternatives is not practically feasible given the limited domestic production of animal fats such as tallow and lard.

Kennedy, for his part, has dubbed the most widely used vegetable oils the "hateful eight," claiming they are responsible for inflammation, obesity, diabetes and other health problems.

However, the US Food and Drug Administration (FDA) disagrees with Kennedy's views, and has published studies showing health benefits from moderate consumption of vegetable oils.

Source: OFI Magazine