m FATS~OILS Rex W. Cox BUTTERFAT B.F. IN CREAM, WHOLE MILK AND) FARM BUTTER ) Sales of Fat and Oil-Bearing Pvoduc.ts

Transcription

1 JUNE 1944 m FATS~OLS Rex W. Cox HOGS ( BUTTERFAT B.F. N CREAM, WHOLE MLK AND) FARM BUTTER ) FLAX Sales of Fa and Oil-Bearing Pvoduc.s ring in 55% of Minnesoa's Cash Farm ncome

2 CONTENTS Page Classes of fas and oils... Producion and rade Origin and uilizaion Domesic uilizaion Animal fas and oils Vegeable oils... Compeiive relaionships Lard and oher shorenings. Producion, rade, disappearance Prices and relaive raes of consumpion Consumer expendiures Uilizaion of fas and oils in manufacured shorenings Buer and margarine. Producion Consumpion and prices.... Consumer expendiures for buer..... Uilizaion of fas and oils in margarine Soap... Uilizaion of fas and oils in soap. Price and subsiuion of fas and ohs Pains, varnishes, and oher producs of he drying indusries The supply and demand siuaion 25 Oules for fas and oils Animal fas and oils Vegeable oils Acceped for publicaion January 7, 1944 SM-6-44

3 <Ji.e A1Uu1-ed.oia d)~ J~ ;, FATS AND OLS Rex W. Cox MNNESOTA derives more han one half of is annual cash income from he fa- and oil-bearing producs, chiefly milk, hogs, and flaxseed. During he large expansion which has aken place in Minnesoa agriculure wihin he las 33 years and which reached a peak in , he oupu of hese producs increased more rapidly han ha of mos oher producs. The sales of buerfa, including he buerfa equivalen of cream, whole milk, and farm buer in , were more han wo and one-half imes hose of The sales of hogs were almos four imes as large, and hose of flaxseed more han five imes as large. The combined income received from he sale of buerfa, hogs, and flaxseed averaged 54 per cen of he oal Minnesoa cash farm income in as compared wih 38 per cen in Alhough he producion of soybeans increased from 11,000 bushels in o 3.5 million bushels in , his crop is relaively of minor imporance in Minnesoa agriculure. Minnesoa occupies an imporan posiion in is conribuion o he oal supply of fas and oils originaing in he Unied Saes. n his sae conribued abou 20 per cen of he supply of buer, 7 per cen of he supply of lard, and 43 per cen of he supply of linseed oil. The oupu of oil obained from he producion of soybeans represened 1.7 per cen of he Unied Saes' supply of his oil. Table. ndexe~; of Quaniy and Value of Sales of Buerfa Hogs, and Flaxseed, Minnesoa, ( = 100) ndex of quaniy ndex of value Year All Buer- Flax- All Buer- Flaxproducs fa Hogs seed producs fa Hogs seed ' ncludes buerfa in sales of cream, whole milk, and farm buer.

4 4 MNNESOTA BULLETN 376 The naional fas and oils picure has changed grealy since he beginning of he war. Alhough he oal domesic producion of he fa- and oil-bearing producs has increased grealy during he pas wo years, he supply has been relaively shor because of limied impors and enlarged demands arising from a high rae of indusrial aciviy, he need for fas and oils in he manufacure of armamens and muniions, and he operaion of he lend-lease program. n consequence, hese iems have been raioned no only in direc consumpion, bu also o he processors of food and indusrial producs. The manufacuring echnique of many of hese producs has undergone rapid changes, paricularly in he subsiuion of domesically produced fas and oils for hose formerly impored. The Minnesoa farmer is ineresed no only in he long-ime and curren changes in he producion, rade, and uilizaion of he various fas and oils in direc consumpion or in he manufacure of margarine, lard subsiues, soap, pains, varnishes, and oher producs, bu also in he compeiive aspecs of buer and margarine, and lard and lard subsiues. He is also concerned wih he poswar demand, paricularly for buer, lard, and linseed oil. The purpose of his bullein is o analyze hese various phases, bu in order o do so i is necessary o consider hem from a naional viewpoin. CLASSES OF FATS AND OLS The wo large classes * of fas and oils, animal and vegeable, may be subdivided ino drying, semidrying, and nondrying. Generally, hose of animal origin, excep he marine, are nondrying, while some vegeable oils are found in each of he various subdivisions. Drying oils absorb oxygen from he air and are hereby convered ino plasic, elasic, resinlike subsances. Consequenly, where hey are exposed in a hin layer, as in paining, hey form a ough, elasic, waerproof film which adheres ighly o he pained surface and proecs i from he weaher. 1 The mos imporan drying oil produced in he Unied Saes is linseed which is he main ingredien enering ino he manufacure of pain and oher producs of he drying indusries. Tung and perilla oils, which have been he wo chief compeiors of linseed in he manufacure of hese producs, are impored oils. The nondrying oils have a wide variey of uses such as in he manufacure of food producs, soaps, leaher dressings, lubricans, and ohers. Some of he more common sricly nondrying oils are coconu, coonseed, and olive. Buer and lard, he mos imporan animal fas, are also classified as nondrying. Soybean and corn oils are represenaive of he semidrying group. When exposed o he amosphere in a hin layer, hese oils and oher!: of he group hicken bu do no form a hard dry film. n consequence, hey are no used in any large proporion in he manufacure of pains and varnishes, and when so used hey mus be mixed wih oils possessing quickdrying characerisics. Fas and oils in general fall ino hree classes of use, edible, echnical, and special, bu in only a few cases is any fa or oil confined o any one use.' Some oils, such as olive and peanu, obained by cold pressing he raw maerial an~ suiable for edible purposes wihou furher processing oher han filering. These are commonly called virgin oils. Ohers obained by ho pressing or by solven exracion usually mus go hrough a process of re- 1 Alsberg, C. L., and Taylor. A. E., The Fas and Oils: A General View. Pp Sanford Universiy Press 'U.S.D.A.. Saisical Bullein No. 59. FRs, Oils, and Oleaginous Raw Maerials. Pp

5 FATS AND OLS 5 finemen before being suiable for edible purposes. Among he more common edible oils obained in his way are coconu, coonseed, soybean, and inferior grades of olive oil. Many fas and oils may be used for indusrial purposes wihou being refined, bu ofen hey are processed in some way. For example, some are hydrogenaed for soap; ung oil is subjeced o hea reamen for use in pains and varnishes; linseed oil is blown, boiled, or refined or oherwise reaed for special indusrial uses; coonseed oil mus be refined for use in whie soap; fish oils are usually deodorized before use and are also refined for use in pain. The disincion beween edible and inedible fas and oils is a purely pracical one, for wih modern mehods nearly all can be refined or modified o a poin of physiological edibiliy, alhough he coss of so doing migh exclude hem as serious compeiors wih ohers more readily adapable for use in food producs. PRODUCTON AND TRADE Pracically all * of he animal fas and oils used in his counry, wih he excepion of some fish and whale oils, are of domesic origin, bu he supply of vegeable oils has consised no only of hose produced from boh domesic and impored seeds, bu also impored oils (able 2). The oal producion of fas and oils in he Unied Saes including buer and lard increased from over 5.8 billion pounds in 1912 o 9.5 billion in 1940, a gain of 64 per cen. Producion of animal fas accouned for 65 per cen of he oal in 1912 and 67 per cen in The producion of vegeable oils produced from domesic maerials represened 31 per cen of he oal in 1912 bu declined o 26 per cen in 1940, while ha obained from impored maerials increased from 4 o 8 per cen. Our impors of fas and oils oaled almos 1.9 billion pounds from July 1, 1938, o June 30, 1939.' The impors of coconu oil and copra in erms of oil equivalen, pracically all of which originaed in he Philippines, were 674 million pounds, or 35 per cen of he oal impors. Flaxseed impors fr'om Souh America in erms of linseed oil equivalen amouned o 349 million pounds, or 18 per cen of he oal. mpors of palm oil conribued 14 per cen, abou four fifhs of which originaed in he Eas ndies wih mos of he remaining coming from Africa. Europe and Africa supplied 104 mil- ' This period is aken in order o show he impor siuaion as unaffeced by war condiions. Year Table 2. Producion and Ne Trade of Primary Fas and Oils, Unied Saes, * Toal (Average).. 7, , , , , , , ,359 Producion From domesic maerials From imoored Toal Animal Vegeable maerials Million pounds 7,095 5, ,808 5,675 2, ,306 5,584 1, ,761 5,536 2, ,781 6,346 2, ,385 6,572 2, ,965 6,777 3, ,870 7,207 3, Ne expors or impors Toal Animal Vegeable , , U.S.D.A. Bureau '>f Agriculural Economics, The Fas and Oils Siuaion Nos 48, 73, and 84. Daa on expors and impors are no available subsequen o Ocober, ' Ne expors are indicaed by a minus sign.

6 6 MNNESOTA BULLETN 376 lion pounds of olive oil which represened more han 5 per cen of he oal. All of he 96 million pounds of ung oil impored came from China and Hong Kong, while he 39 million pounds of perilla oil originaed in Japan and Kwangon. These wo oils consiued abou 7 per cen of our oal impors. Souh America supplied all of our impors of casor oil and abou wo hirds of he impors of coonseed oil (able 3). The Far Eas has been he mos imporan source of impored fas and oils, accouning for abou 57 per cen of our oal impors in (able 4). This is paricularly significan in view of he presen Japanese conques. Coconu and perilla oils are no produced elsewhere and he impors of palm oil from Africa have no been sufficien o mee he domesic demands. Only a very limied amoun of ung oil is produced in he Uni~d Saes. Since coconu and palm oils have been imporan consiuens in soap, and ung and perilla in pain and varnish manufacure, he eliminaion of he impored supplies means ha hese indusries mus uilize subsiues which are obainable primarily from domesically produced oils. Souh America conribued more han one fourh of our oal impors, consising primarily of linseed and relaively small amouns of casor, coonseed, babassu, and oiicica oils. Europe supplied abou one enh of he oal, our mos imporan impors being olive, fish, and marine oils. Alhough Africa has accouned for less han one wenieh of he oal, i was an imporan conribuor o our supply of olive, palm, and palm kernel oils. A number of changes have occurred over a period of ime in ariff duies and excise axes levied on impored seed and oil, influencing he compeiive posiion of hese and oher producs enering ino he manufacure of boh food and indusrial producs. Some of hese changes have been made for he purpose of encouraging he imporaion of he seed raher han he derived oil in order o provide addiional business for he oil crushers in his counry. The duies and excise axes levied on flaxseed and is produc, linseed oil, and on copra and coconu oil have been of special significance o producers and manufacurers in he Unied Saes. Flaxseed' and linseed oil have been subjec o heavy impor duies for many years. The relaive raes have been such as o discourage he imporaion of oil; in consequence, wih he excepion of a shor ime during , he impors of oil have been negligible. The ariff ac of 1913 levied a rae of 20 cens per bushel on flaxseed and 1.3 cens per pound on oil, which represened a reducion from he prevailing raes. The rae on flaxseed -was equivalen o 1.1 cens per pound on he average oil yield. n 1921 he rae on flaxseed was increased o 30 cens per bushel, equivalen o 1.6 cens per pound of oil. The rae on oil remained he same; in consequence, impors of oil enjoying a.5 cen differenial rose o 180 million pounds in The Tariff Ac of 1922 increased he rae on he seed o 40 cens per bushel, equivalen o 2.2 cens per pound on he average oil yield, and he rae on he oil o 3.3 cens per pound. These raes prevailed unil 1929, when, by presidenial proclamaion, he duy on flaxseed was increased o 56 cens per bushel, or 3.0 cens per pound of oil equivalen, and he rae on oil o 3.7 cens per pound. One year laer he Smoo-Hawley Tariff Ac furher increased he rae on flaxseed o 65 cens per bushel, or 3.5.cens per pound of oil equivalen, and on oil o 4.5 cens per pound. These raes prevailed unil he recen rade agreemen wih Argenina was signed. The laer became effecive on November 15, 1941, and provides for a reducion of he duy on flaxseed o 50 cens,

7 Table 3. mpors of Specified Fas and Oils by Counry of Oriqin. July June * em All counries Europe Canada and celand Africa Souh Newfound- America land New Zealand Eas ndies ndia and Ceylon China Japan Uniden- Philip- and and ified pines Hong Kong Kwangon origin All fas and oils Vegeable... 1,818.6 Babassu ' 52.2 Casor Coconu Coonseed Com Linseed Olive Oiicica Palm Palm kernel Peanu Perilla Rapeseed Soybean Sesame Teaseed Tung Animal Tallow Fish Oher marine * U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion, No. 40. U.S.D.A. Agriculural Saisics,

8 Table 4. Proporion of he mpors of he Specified Fas and Oils Conribued by he Differen Counries of Origin, July June Canada and New ndia China japan Uniden- Hem All Europe celand Africa Souh Newfound- Zea- Eas and Philip- and and ified counries America land land ndies Ceylon pines Hong Kong Kwangon origin Per cen All fas and oils ll Vegeable Babassu Casor Coconu Coonseed Corn Linseed Olive.....,,,_,,,.,,,_ Palm ~ Palm kernel Peanu Perilla Rapeseed Soybean Tung Sesame Teaseed Oiicica Animal Ll Tallow Fish Oher marine

9 FATS AND OLS FG.. Flaxseed: producion, ne impors, and ne supply excep ha he duy shall be 32.5 cens per bushel for he duraion of he abnormal siuaion in he Unied Saes. The emporary reducion will erminae 30 days afer he Presiden of he Unied Saes, following consulaion wih he Argenine governmen, proclaims ha he abnormal siuaion has passed. The impors of flaxseed have consiued a very significan proporion of he supply available for crushing in he Unied Saes (figure 1). Boh producion and impors of flaxseed vary widely from year o year, wih he endency for impors o increase when producion declines, paricularly in years of heavy domesic demand for linseed oil by he drying indusries. Domesic producion averaged 20.1 million bushels in and impors 20.4 million. Alhough producion changed hu slighly in 1930, impors declined o less han 8 million owing o he grealy decreased demand for linseed oil. Domesic producion amouned o only 5.3 million bushels in 1936, bu he impors of 26 million were nex o he highes in hisory. The producion of flaxseed has increased rapidly since 1938 and averaged abou 31 million bushels in mpors averaged less han 10 million bushels in hese wo years. Amendmens o he Ac o provide for Philippine independence, which became effecive in 1939, esablished duy-free quoas for impors of coconu oil ino he Unied Saes from he Philippine slands for he period January 1, 1940, o July 3, The quoa, amouning o 440 million pounds in 1940, diminished by 5 per cen of his amoun each year unil Wih complee independence for he Philippines beginning July 4, 1946, all impors of coconu oil ino he Unied Saes from he Philippines were o be subjec o he ariff levied on impors from oher counries, or wo cens per pound. mpors from he Philippines during he inervening period in excess of he annual quoas were o be subjec o he duy paymens! n 1921 a duy of 2 cens per gallon was levied on impors of coconu oil from counries oher han he Philippine slands. The duy was changed o 2 cens per pound in Since he U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siua_ion, No

10 10 MNNESOTA BULLETN 376 duy on impors from non-philippine sources wen ino effec, only small amouns of coconu oil have been impored from hese counries; however, impors of copra from hese sources coninued o be fairly large. Wih imposiion of excise axes of 3 cens per pound on he firs domesic processing of coconu oil originaing in he Philippines and 5 cens on ha originaing in oher counries, he impors of copra declined rapidly. Abou 99 per cen of he coconu oil and oil equivalen of copra impored by he Unied Saes in 1939 originaed in he Philippines. Our oal impors of coconu oil and copra in erms of oil equivalen declined from 627 million in 1918 o 309 million pounds in Rapid increases occurred during he succeeding years, he impors exceeding 722 million in Since he laer year, considerable variaion has occurred, bu, in general, he excise ax did no cause any grea decline, he average for he period approximaing 656 million pounds. Alhough he quoa in 1940 se by he Philippine legislaion was 440 million, only 371 million pounds were impored, primarily because of he shorage of shipping space. ORGN AND UTLZATON Domesic * Uilizaion The domesic uilizaion of fas and oils including buer and lard increased from an average of 7.1 billion pounds. in o 9.4 billion pounds in (able 5). This increase was fairly evenly disribued beween he uilizaion for food and uilizaion for indusrial purposes. Food producs accouned for 69.4 per cen of he oal disappearance of fas and oils in and 68.4 per cen in (able 6). Alhough he uilizaion of fas and oils for he various food and indusrial producs, wih he excepion of lard, was significanly greaer during he las five-year. period, some significan changes occurred in he relaive imporance of he individual iems. For example, buer accouned for 27.6 per cen of he oal disappearance in and 23.4 per cen in , while cooking compounds or manufacured shorenings and he miscellaneous group of food producs changed from 18.7 per cen o 25.1 per cen. The decline in he relaive imporance of lard in was due in par o he decreased supply of his produc resuling from he drouh in The relaive imporance of he uilizaion of fas and oils for he manufacure of he various groups of indusrial iems such as soap, producs of he drying indusries, and oher producs changed bu slighly during he 20- year period. An unusually sharp rise in he domesic uilizaion of fas and oils occurred in 1941, he oal increasing o almos 11 billion pounds or abou 12 per cen larger han in Mos of his increase was for indusrial purposes and was due o he enlarged demands for indusrial producs arising from l;le high rae of manufacuring and consrucion aciviy and o he exensive requiremens for fas and oils in he muniions indusry. The drying indusries uilized 34 per cen more han in 1940 and he soap indusry abou 25 per cen more. Fas and oils used in he manufacure of miscellaneous indusrial producs increased by 42 per cen. The uilizaion for food rose 4 per cen, he decrease in buer and lard being more han offse by an increase of 15 per cen in he amoun of fas and oils used in he manufacure of cooking compounds or shorenings, margarine, and oher edible producs. The oal domesic disappearance declined slighly in 1942, bu more han 50 million pounds were used in producs for lend-lease delivery.

11 8,414 Table 5. Uilizaion of Fas and Oils in Food and ndusrial Producs. Unied Sales " Toal Food domesic Year disappeara nee Toal Buer Marga- Lard Compounds and vegeable Ohers rine cooking fas Million pounds (Average) 7,100 4, ,456 1, ~ 5,700 2, ,526 1, ,357 5,895 2, ,617 1, ,332 6,384 2, ,566 1, ,767 6,651 2, ,949 1,196 1, ,965 6,921 2, ,898 1,418 Ll ,344 6,759 2, ,794 1,282 1,144 U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion, Nos. 61, 62, 74, and 76. Excludes use in oher producs. ndusrial Drying Toal Soap indusries 2,175 1, ,714 1, ,462 L , ,116 1, ,044 2,270 1,054 3,585 1, Ohers Table 6. Proporionae Disribuion of he Toal Uilizaion of Fas and Oils in Food and ndusrial Producs. Unied Sales, Year Toal domesic disappearance Toal Food Buer Marga- Lard rine ndusrial Compounds Drying and vegeable Ohers Toal Soap induscooking fas ries Ohers (Average) Per cen l.l

12 12 MNNESOTA BULLETN 376 Animal Fas and Oils n addiion o lard, he slaughering and mea packing indusries produce a number of oher imporan by-producs among which are grease, edible and inedible allow, oleo oil, and oleosearine. The fa from sheep and cale is known as allow. Sheep fa is used widely for soap, candle making, and lubricans. Beef fa is also used husly, and in food producs as well. The fa from he hear, caul, and around he kidneys gives he fines edible allow, he bes grades of which are used o produce oleo oil and oleosearine. The disincion beween edible and inedible allow is somewha vague and depends in par on he degree of refinemen o which he allow has been subjeced and he exisence of inspecion and saniary regulaions governing he slaughering processes. Tallow from condemned animals can as a rule be classified as inedible, and, in consequence, is used in soap or oher indusrial producs. The disincion beween allow and grease originaing in he mea packing indusries is also raher indefinie. Grease may consis of inedible lard or he lower grades of beef and sheep fa, as well as exracions from ordinary refuse maerial. A significan proporion of he grease used in commercial channels originaes ouside of he packing indusries and represens more or less he resuls of salvaging. Vegeable Oils While animal fas are obained by rendering processes, he vegeable oils wih few excepions are obained by compressing he seed or nu which conains he oil. Mos of hese oils are obained by ho pressing, for example, coconu, palm kernel, soybean, coon- "Alqberg, C. L., and Taylor, A. E., The Fas and Oils: A General'View. Pp Sanford Universiy Press seed, and linseed. As a rule such oils undergo addiional processes involving refinemen before hey are suiable for eiher edible or indusrial use. Alhough mos of he vegeable oils are edible, hey ener exensively ino he manufacure of inedible compounds. As in he case of cerain animal fas, a number of vegeable oils are used direcly. Linseed oil is commonly used by painers; olive oil is a well-known salad dressing ingredien; and coonseed oil is used exensively for frying. The uilizaion of he individual fas and oils by differen oules is shown laer in able 12. The daa included in his able, which are averages for , are he proporions of he oal used in he manufacure of differen producs and used direcly. Compeiive Relaionships As indicaed in he previous discussions, he main oules for mos fas and oils, aside from direc use, are he manufacure of shorenings, margarine, and various oher food producs; soap; pains; varnishes, and oher producs of he drying indusries; and oher miscellaneous indusrial producs. Fas and oils have many properies in common bu some possess properies making hem especially adapable o he manufacure of paricular producs. Consequenly, many fas and oils are boh complemen~ry and subsiuable.' n he range wihin which fas and oils have properies in common and are subsiuable in he manufacure of a specified produc, compeiion is inensive, he demand for he individual iem is elasic, and, herefore, he e:xen of is use is deermined largely by he price relaive o he prices of compeing fas and oils. When a fa or oil has peculiar properies which make i especially suiable in a specified usc, o Alsberg, C. L., and Taylor, A. E.. The Fas and Oils: A General View. Pp Sanford Universiy Press

13 FATS AND OLS 13 compeiion of he iem wih ohers is subordinae, and, in consequence, he demand of i is likely o be inelasic. Over a period of ime, echnological changes involved in he preparaion of an individual fa or oil may increase is adapabiliy o such an exen ha i can be subsiued for ohers wihou significan changes in he produc. Alhough many fas and oils are subsiuable in he manufacure of a cerain produc, heir properies may be such as o limi heir adapabiliy o he manufacure of oher producs. This difference in adapabiliy prevails no only as beween he food and indusrial groups of producs, bu also beween he producs wihin he respecive groups. Ohers are of such a characer ha hey can be used for differen producs. n consequence, individual fas and oils no only compee among hemselves in a paricular use, bu also he manufacured producs compee one wih he oher for cerain iems because of he wide adapabiliy of he laer. An individual fa or oil whose properies are such as o render i a srong compeior wih ohers, no only in one use bu in one or more oher uses, possesses a demand ha is more elasic han if is range of compeiion was limied o a single use. An increasing demand for paricular iems resuling from heir expanded use in food or oher high-priced producs may cause he prices of hese iems o so advance as o discourage heir use among he producs of he lowerpriced field. LARD AND OTHER SHORTENNGS Producion, Trade, * Disappearance Lard is a join produc of pork producion; herefore, is oupu depends largely on he number of hogs. Bu he demand for lard as refleced in price, as well as he demand for pork and he supply of corn, affecs he weighs a which hogs are markeed and hence he supply of lard. Producion of lard was characerized by an increasing rend from 1912 o The producion in he laer year was 64 per cen larger han in No disinc rend was eviden in he following 10 years; bu during he middle 1930's, he decreased number of hogs and reduced feed supplies resuled in he rapid decline of he oupu of lard. The producion of 1,276 million pounds in 1935 was he smalles annual oupu of any year during he period During he pas six years, producion has increased, he oupu averaging abou 2,300 million pounds in Up o 1930 he Unied Saes was a relaively heavy exporer of lard, expors ending o increase when he producion was a a high level. For he period hey averaged abou 35 per cen of he annual oupu. The decline in expors subsequen o 1929 was in par due o a declining expor demand for lard and in par o he low raes of producion prevailing during Alhough producion again reached a high level in , expors consiued less han 13 per cen of he producion. The facory producion of oher shorenings usually called lard subsiues increased rapidly from 1912 o 1919, bu during he nex five years when he producion of lard was unusually high, i declined, averaging around 800 million pounds. Fairly sable bu higher levels prevailed from 1925 o 1931, bu producion declined o less han 1,000 million pounds in he succeeding wo years. Since 1935, he rend of facory producion of shorenings has been almos opposie o ha of lard wih a peak oupu of 1,595 million pounds in The combined per capia consumpion of lard and is subsiues during he pas 31 years has ranged from a

14 14 MNNESOTA BULLETfN 376 low of 17.8 pounds in 1921 o a high of 24.8 pounds in 1941 (figure 2). Alhough he per capia consumpion of boh lard and lard subsiues has been quie variable, he annual changes in consumpion of he wo ypes of shorenings have usually ended o be in opposie direcions. Consequenly, he variaion in he combined consumpion has been much less han ha of eiher of he componens. Lard consumpion was mainained a especially high levels in , , and 1940, bu consumpion of lard subsiues reached relaively low levels during hese periods. Prices and Relaive Raes of Consumpion The prices of boh lard and lard subsiues were unusually high in 1919 and Since he laer year he general rend of boh series of prices has been downward, paricularly ha of lard. The annual flucuaions of he prices of lard have also been larger (figure 3). The relaive raes of consumpion of lard and is subsiues have been closely associaed wih he relaive prices of he wo producs; ha is, when he price of lard is high relaivl~ o he price of he subsiues, he proporion ha he per capia consumpion of lard is of he combined per capia consumpion of lard and is subsiues ends o be lower han when he reverse price siuaion prevails (figure 4). From 1925 o 1931 he price of lard relaive o he price of subsiues declined rapidly, bu he proporion represening he consumpion of lard remained a fairly uniform levels, indicaing ha he demand for lard was declining relaive o he demand ' for subsiues. Since 1931 boh of he wo series of proporions have shown marked changes from year o year, bu in reverse direcions. n view of he close correspondence beween he producion and he consumpion of lard subsiues during he pas 10 years, i POUNDS LARD AND OTHER SHORTENNGS ~~ j --~~ ':. ~ ~ ~r---- ~ \;' ' ' ' ' /'.. :"><,, / / / ' OTHER SHORTENNGS 7' FG. 2. Per capia disappearance of lard and oher shorenings

15 FATS AND OLS 15 CENTS \\ \\ ~ \ --- / ~..../ ~ l / L~ --- ''-,_ ', OTHER / '\ SHO~~-~~~~~ \,,_// \ \ \ ',. h ' / " \ ) ~ \._./ FG. 3. Reail prices per pound of lard and oher shorenings PER CE NT \ r-....._.,., , --./ -;/"'' PER CENT PRCE OF LARD SHORTENNGS ~ /_ ~ OF PRCE OF OTHER 1\ PER CENT CONSUMPTON OF LARD S OF COMBNED - f- CONSUMPTON OF LARD AND OTHER SHORTENNGS ~ 1\_r,/ ~ / \ v\1 )( 1;-- \' ,..., i FG. 4. Relaive prices and relaive raes of consumpion of lard and oher shoreninqs

16 16 MNNESOTA BULLETN 376 is eviden ha he manufacurers of hese compounds curail heir oupu when he prospecs are very favorable for a large available supply of lard a relaively low prices. Consumer Expendiures The annual flucuaions of he prices of lard and lard subsiues are larger han he changes in he per capia consumpion. Since exreme flucuaions in demand occur when he nonfarm income changes rapidly, he more exreme flucuaions in per capia expendiures are also associaed wih he changes in nonfarm income. n general, he per capia expendiures for lard have shown a downward rend during he pas 23 years, alhough he annual flucuaions have been somewha less han hose of lard subsiues. From 1920 'o 1927, per capia expendiures for lard exceeded hose for subsiues, bu since 1928 hey have been less. Expendiures for lard averaged $1.79 per capia in 1937, and expendiures for subsiues $2.67, a differenial of 88 cens. n 1941 he differenial declined o 32 cens. Uilizaion of Fas and Oils in Manufacured Shorenings Domesic fas and oils have always accouned for a large proporion of he oal fas and oils used in he manufacure of shorenings. was no unil 1931 ha foreign oils made up as much as 10 per cen of he oal. The proporion was highes in 1935 and 1936, reaching 18.1 per cen in he laer year, bu by 1942 i had declined o 4.7 per cen (able 7). Table 7. Shoreninqs: Percen::qe Conribued by Principal ems o he Toal Weiqh of Fas and Oils Used in Manufacure. Unied Saes * Averaqe Average Average Average em! ! ! Per cen All fas and oils ! Vegeable Domesic Coonseed Soybean Peanu Com Foreign Palm Coconu Sesame Ohers...., Animal Land ll.6 Tallow, edible O!eosearine Oleo Lard and pork fa Marine Toal weigh, million pounds ,220 1,208 1,052 1,583 1, *From daa repored in: U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion, Nos. 27, 65, and 76. L"ess han. 05 per cen.

17 FATS AND OLS 17 Vegeable oils of domesic origin conribued a leas 86 per cen of all he fas and oils used in producion of shorenings previous o 1931, wih coonseed oil being he main conribuor and accouning for no less han 80 per cen of he oal. Oher oils of he vegeable group were relaively of minor imporance excep during he years n hese years, subsanial amouns of peanu and soybean oils were used, he former conribuing 4.6 per cen in 1918, and he laer 6.4 per cen in Coconu oil was he mos imporan foreign oil used previous o 1931, bu even i was of relaively minor imporance. Among he animal fas, oleosearine conribued around 5 per cen annually o he oal weigh of all fas and oils used. Alhough a considerable amoun of coonseed oil was replaced by oher oils, paricularly hose of he foreign vegeable group in 1931, he more significan changes in he echnology of he manufacure of shorenings did no occur unil n he laer year coonseed oil conribued only 63.9 per cen o he oal as compared wih 87.2 per cen in he previous year. This decrease was balanced mainly by increases in he proporions conribued by soybean and peanu oils of he domesic vegeable group, and oils of he foreign vegeable group, paricularly palm, coconu, and sesame oils. The use of edible allow also reached is highes level in For some years he use of his animal fa.had been increasing, while ha of oleosearine had been decreasing. The decline in he relaive imporance of coonseed oil and he increase in he relaive imporance of soybean oil and oils of he foreign group coninued in n his year coonseed oil conribued 56.9 per cen, soybean oil 7.1 per cen, and peanu oil 5.5 per cen. The foreign group accouned for 18.1 per cen, palm oil alone making up a'lmos hree fifhs of he conribuion by his group. The more significan changes occurring during he pas six years have been he increasing imporance of soybean oil and he declining imporance of he foreign group. The proporion conribued by soybean oil was almos four imes larger in 1942 han in Soybeans are produced primarily for he oil conen. ncreased domesic producion of soybean oil in recen years and is adapaion o use in edible producs has been mainly responsible for he marked increase in he uilizaion of his oil in shorenings. Coonseed oil is a by-produc of coon producion, so he supply of i is dependen on he oupu of coon. These wo oils are disincly compeiive, bu he influence of relaive prices on he proporions conribued by each o he manufacure of shorenings and oher food producs is ob- scured a presen because of warime resricions regarding heir uilizaion. is likely ha soybean oil will coninue o be one of he main compeiors of coonseed oil, and wih he removal of resricions, he exen of is use will be governed mainly by is price relaive o he price of coonseed oil. BUTTER AND MARGARNE * Producion The combined producion of creamery and farm buer amouned o 1,684 million pounds in 1914 wih creamery producion accouning for 44 per cen of he oal. The combined producion of 2,349 million pounds in 1933 was he highes on record up o Creamery buer producion in 1933 was 75 per cen of he oa~. Following he decline during he nex few years, producion again increased in 1938 and reached he record high of 2,370 million pounds in n he

18 18 MNNESOTA BULLETN 376 laer year creamery producion consiued 80 per cen of he oal. was no unil World War ha he annual producion of margarine exceeded 150 million pounds. The oupu of 315 million pounds in 1918 was more han wice ha of Following he high oupu of 369 million pounds in 1920, producion declined o 185 million in 1922, bu in he succeeding years i again rose rapidly and exceeded 366 million pounds in The variaions since 1930 have been wide, ranging from a low of 203 million pounds in 1932 o he peak oupu of 397 million pounds in The producion of colored margarine has never exceeded 6 per cen of he annual oal, and since 1931 he proporion has been less han 2 per cen. Consumpion and Prices Pracically all of he annual producion of buer and margarine is consumed during he curren year; consequenly, he per capia disappearance of hese producs corresponds closely o he per capia producion. During he period , he combined per capia disappearance of buer and margarine mainained a high degree of uniformiy from year o year (figure 5). This was due mainly o he increased producion and uilizaion of margarine in hose years when he amoun of buer available for consumpion was less han normal. The annual per capia disappearance of margarine averaged 18.7 per cen of he combined per capia disappearance of buer and margarine in , bu in subsequen years he proporion has never exceeded averaged 12.6 per cen during he period The inverse relaionship beween he annual changes in he per capia consumpion of buer and margarine is shown in figure 6. Manufacurers of margarine end o expand heir oupu when he producion of buer is low, realizing ha limied supplies and relaive high prices of buer resul in an expansion of he marke for margarine, paricularly among low-income consumers. The close correspondence beween annual changes in he reail price of buer and he per capia disappearance of margarine is shown in figure 7. POUNDS BUTTER AND MARGARNE \o ~/ ---- ~ ,...,... ' /~/ BUTTER/" ',, r ~ ~ ~----1 MARGARN_~_"lo _ i ~ FG. 5. Per capia disappearance of buer and margarine

19 FATS AND OLS 19 POUNDS -l ~,, 'v \ MARGARNE_,/'!.; fig. 6. Annual changes in he per capia disappearance of buer and margarine Consumer Expendiures for Buer The annual changes in Unied Saes reail price of buer has been closely associaed wih he annual changes in nonfarm income. As a consequence of his relaionship and he relaively small variaion in he consumpion of buer, he annual changes in consumer expendiures for buer also depend primarily on changes in nonfarm income. For he period , a one per cen change in nonfarm income was accompanied by an average change of.89 per cen in consumer expendiures (figure 8) '-----'--..L---"'--+---'---'---'-~--l--'---'--'----'--+~--'--...J.. L_-+-~--' FG. 7. Annual changes in he price of buer and he per capia disappearance of margarine

20 20 MNNESOTA BULLETlN 376 EXPENDTU RES PER CENT OF PRECEDNG YEAR ~ o38 -""' 31 b/.2 / v h,25 o39 / '"/. ~ _ NONAGRCULTURAL NCOME PER CENT OF PRECEDNG YEAR FG. 8. Relaion beween nonagriculural income and consumers' expendiures for buer (The numbers wihin graph refer o individual years),36 Uilizaion of Fas and Oils in Margarine Fas and oils of domesic origin conribued 75 per cen o he oal weigh of 276 million pounds of fas and oils used in he manufacure of margarine during he period (able 8). Animal fas were wice as imporan as he vegeable oils. Oleo oil and lard of he animal group and coonseed and peanu oils of he vegeable group were he only iems of domesic origin which were used in significan amouns. Coconu was he only oil of foreign origin ha was used a his ime. During he following years and coninuing hrough 1933, he use of fas and oils of domesic origin declined rapidly in imporance. n he laer year animal fas conribued only 14 per cen and vegeable oils of domesic origin abou 11 per cen o he oal of 200 million pounds of fas and oils used in margarine. Coconu oil accouned for 75 per cen of he oal uilizaion. Beginning in 1934, a rapid rise occurred in he relaive imporance of he vegeable oils of domesic origin, wih coonseed replacing coconu oil. This change was in par a response o he ax levied on he processing of coconu oil. The ransiion from he use of coconu o domesic vegeable oils was paricularly marked during he pas hree years owing o he rapidly disappearing socks of he former. The rise in he use of soybean oil

21 FATS AND OLS 21 Table 8. Margarine: Percenage Conribued by Principal ems o he Toal Weigh of Fas and Oils Used in Manufacure. Unied Saes, * Average Average Average Average Average em All fas and oils.... Vegeable Domesic Coonseed Soybean Peanu Corn Ohers Foreign Coconu Babassu Palm kernel Palm.... Ohers Animal Oleo Oleosearine Lard, neural Oleo sock Buer.... Ohers Toal weigh, million pounds. 100_ l OO.O l Per cen * From daa repored in U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion, Nos. 27, 37, 49, 60, 72, and Oleomargarine, Augus 936. Less han.05 per cen l OO.O is of special significance o farmers in he norh cenral saes. Less han 2 million pounds of his oil were used in he manufacure of margarine in 1935 as compared wih 100 million pounds of coonseed; bu by 1940 more han 87 million pounds were used. n 1942 coonseed oil accouned for 48 per cen, soybean 38.5 per cen, and coconu oil only one per cen of he 347 million pounds of fas and oils used in margarine. SOAP Uilizaion of Fas * and Olls in Soap The manufacure of soap uilizes boh hard and sof oils. A number of he former are of a quick-lahering characer, he more common of which are coconu, palm kernel, and babassu oils. Ohers of he hard ype which are slow-lahering include allow, grease, whale and fish, palm and small amouns of edible allow, and oleosearine. The sof oils used in manufacuring soap are of vegeable origin, he more imporan of which are coonseed and coonseed oil foos, inedible olive and olive oil foos, and soybean oil. n addiion o fas and oils, a considerable amoun of rosin is used, conribuing beween 5 and 8 per cen of he oal weigh of saponifiable maerials used in manufacure. The use of rosin in soap has declined somewha during he pas 10 years, as a resul of growing consumer preference for soap flakes and powders and a diminishing demand for yellow laundry soap.

22 22 MNNESOTA BULLETN 376 The oal weigh of fas and oils used in he manufacure of soap increased from less han 1,000 million pounds in 1921 o almos 1,700 million pounds in From 1930 o 1938, uilizaion averaged around 1,530 million pounds, bu i increased rapidly during he nex hree years and exceeded 2,200 million pounds in Fas and oils of domesic origin have been he mos imporan iems. enering ino soap manufacure, acc6uning for abou wo hirds of all fas and oils used. The group of slow-lahering oils is he mos imporan conribuor o he oal weigh of fas and oils used in making soap (able 9). n erms of five-year averages, he proporions changed bu slighly from 1921 o 1940, ranging from 61.1 per cen in o 63.9 per cen in boh of he five-year periods and Accompanying he decline in he available supply of he oils of he quick-lahering group, paricularly coconu oil, he proporion rose o 83.4 per cen in The rends in he use of he various fas and oils of he slow-lahering. group have been quie irregular. nedible allow, he mos imporan iem of his group, accouned for 34.1 per cen of he oal weigh of fas and oils used in he manufacure of soap in The proporion declined o 28.0 per cen in he succeeding fiveyear period bu averaged 41.4 per cen in The large increase in he use of he slow-lahering oils in 1942 was largely due o he more exensive use of inedible allow. Grease, a fa closely resembling he lower grades of inedible allow, also has been used more exensively during he pas hree years han during he preceding 10- year period. Alhough whale and fish oils conribued 9 per cen o he oal in , he proporion declined o 3.7 Table 9. Soap: Percenage Conribued by Principal ems o he Toal Weigh of Fas and Oils Used in Manufacure, Unied Saes, Average Average Average Average em Per cen All fas and oils Hard oils-allow class '91.5 Slow-lahering Tallow, inedible Whale and fish Grease Palm Ohers Quick-lahering Coconu Palm kernel Babassu Sof oils Coonseed oil foos and oher foos Coonseed Soybean..... ~ Olive Ohers Toal weigh, million pounds ,599 1,491 1,674 1,822 2,270 1,985 From daa repored in U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion. Nos. 27, 64, and 74. Less han.05 per cen.

23 FATS AND OLS 23 per cen in The available supply of hese oils has been definiely resriced by he war. Palm oil reached he peak of relaive imporance in he manufacure of soap in , accouning for 10 per cen of all of he fas and oils. used. The reducion since 1935 has been due in par o he processing ax of 3 cens per pound, and o he limied supply paricularly during he pas wo years. The imporance of he group of quick-lahering oils has been due primarily o coconu oil. Previous o 1942, he laer conribued abou 20 per cen o he oal weigh of fas and oils used in he manufacure of soap. The limiaions in he supplies of coconu oil resuled in he proporion declining o 7.0 per cen in The oher wo quick-lahering oils have been relaively unimporan. is likely ha he use of babassu oil, an imporan produc from Souh America, may be increased in he fuure, depending in par on he greaer culivaion of he babassu nu in ha area. The proporions conribued by he sof vegeable oils experienced a declining rend during he 21-year period, dropping from an average of abou 16 per cen in o around 8 per cen in The decline in recen years has been due mainly o he decrease in he use of coonseed oil foos and oher foos, and o a lesser exen in he use of olive and oher miscellaneous oils. Soybean oil has never been an imporan conribuor in he manufacure of soap, alhough he rend has been slighly upward. Price and Subsiuion of Fas and Oils There is a wide range of adapaion among fas and oils in he manufacure of he differen kinds of soap, and, as shown by he above, a number of hese are subsiuable. 7 While he exen of subsiuion from year o year is in par a response o relaive prices, he influence of he price siuaion is somewha obscured. The differen ypes of soap-oile, laundry, and household-have heir own basic demands, and daa are no available o show he relaive producion of he differen ypes. Furher, manufacurers of rade-mark soaps endeavor o keep hem uniform in order o reain esablished markes. n consequence, here is a cerain range wihin which hey can subsiue he various fas and oils and sill mainain uniformiy in he soap, bu probably wihin his range hey purchase he raw maerials on he basis of price. Ouside of his range, hey canno subsiue fas wih mainenance of uniformiy, bu mus buy he fas and oils a marke prices. The properies of rade-mark oile soaps are held more rigid han hose of rade-mark household and laundry soaps, bu he properies of he laer are held more rigid han hose of unbranded soaps. As a rule, he lower he ype of usage, he less he necessiy for uniformiy. n consequence, he range of subsiuion ends o vary inversely wih he price of he soap. The marked changes which occurred in 1942 in he manufacure of soap were due primarily o he limiaion of supply and o governmen resricions relaive o he use of specific fas and oils, raher han o he price differenials prevailing beween he differen iems. Alhough he quick-lahering oils have been resriced o processes such as soap manufacure in which a high percenage of glycerine. can be recovered, he limied supply of hese oils is such ha he hard-lahering group will coninue o accoun for a very high proporion of all fas and oils used in he soap indusry. The 7 Alsberg, C. L., and Taylor, A. E., The Fas And Oils: A General View. Pp Sanford Universiy Press

24 24 MNNESOTA BULLETN 376 reversal of he endencies in 1942 will depend mainly on how soon he impors of coconu oil from he far eas can be resumed. The use of he sof vegeable oils in hard soap manufacure, wih he excepion of coonseed and oher oil foos, is limied no only by he naure of he produc bu also by he demand for hese oils in oher uses. The prices of coonseed oil and soybean oil normally are oo high relaive o prices of allow and grease o permi hy- drogenaion and use in he manufacure of hard soap on any wide scale. PANTS. VARNSHES, AND OTHER PRODUCTS OF THE DRYNG NDUSTRES * Fas and oils are used no only in he manufacure of he producs of he drying indusries, such as pains and varnishes, linoleum, oil cloh, and prining ink, bu also in mixing wih prepared pains and varnishes. The rae of producion and uilizaion of he producs of he drying indusries depend o a large degree on he rae of indusrial aciviy; consequenly he major changes in he rae of uilizaion of he various fas and oils in hese indusries are closely associaed wih he major changes in he rae of in-: dusrial aciviy (figure 9). The disappearance of fas and oils in he drying indusries and he index of indusrial aciviy increased rapidly from 1921 o 1929, and hen declined o relaively low levels in n he laer year he disappearance of fas and oils approximaed 474 million pounds as compared wih 931 million in Boh disappearance of fas and oils and indusrial aciviy increased rapidly during he nex 10 years, excep for he recession in 1938, and reached heir highes levels in The uilizaion of fas and oils in he drying indusries in 1941 was NDUSTRALr , , , PRODUCTON NDEX ( =100) UTLZATON OF OLS, -~-,, ' FG. 9. ndusrial producion and uilizaion of fas and oils in he drying indusries

25 FATS AND OLS 25 Table 10. Producs of he Dryinq ndusries: Percenaqe Conribued by Principal ems o he Toal Weiqh of Fas and Oils Used in Manufacure and Used Direcly, Unied Saes, * em Average All fas and oils Linseed Tung Perilla Fish Soybean Casor.4 Oiicica... Ohers Average Per cen Toal weigh, million pounds *From daa repored in U.S.D.A. Bureau of Agriculural Economics, The Fas and Oils Siuaion, Nos. 39 and 75. 1,054 million pounds, or 13 per cen larger han in i929. During he period , he consumpion of fas and oils in he pain and varnish indusry accouned for 84 per cen of he oal uilizaion by he drying indusries; he manufacure of linoleum and oil cloh accouned for 13 per cen; and he manufacure of prining ink, 3 per cen. Of he oal uilizaion in pains and varnishes, abou wo hirds enered ino he manufacure of hese producs and one hird was used direc~y. The more imporan fas and oils used in he drying indusries are linseed, ung, perilla, fish, soybean, casor, and oiicica. Daa on he percenage conribuion of hese oils o he oal weigh of all fas and oils used in hese indusries are available only for he period During his period significan changes occurred in he relaive imporance of he differen iems (able 10). From 1932 o 1936 he use of linseed oil, while gaining in absolue volume, decreased proporionaely from 77 per cen o 61 per cen. This decline in he proporion conribued by linseed oil was balanced mainly by a marked increased use of perilla oil and a sligh increase in fish and some of he minor oils. During he following years he proporion conribued by linseed oil increased, as likewise did he proporions conribued by soybean, casor, and oiicica oils. The use of ung and perilla oils declined in imporance as a resul of decreased supplies and relaive high prices. Linseed oil accouned for more han 85 per cen of he fas and oils used in he drying indusries in 1942, ung oil 1.8 per cen, and perilla oil.4 per cen. Casor oil has become increasingly imporan in he drying indusries, paricularly in he manufacure of pains and varnishes. This oil conribued 5.8 per cen o he oal weigh of fas and oils used in he drying indusries in 1942, compared wih less han one per cen in THE SUPPLY AND DEMAND STUATON One of he firs * resuls of he oubreak of he war in Europe was he reducion in oules for fas and oils of exporing counries; in consequence, large surpluses accumulaed in hese counries, paricularly in he Philippine slands, Eas ndies, Briish ndia, Wes Africa, and Argenina. The Unied

26 26 MNNESOTA BULLETN 376 Table 11. Purchases of Fas and Oils by he Food Disribuion Adminisraion ' em Buer Lard and rendered pork fa.. Oher animal fas and oils:j:. Linseed oil Oher vegeable oils Shorening Margarine Soap (fa conen) Million pounds Toal fa equivalen 329 1,027 1,682 U.S.D.A., The Fas and Oils Siuaion, No. 84, p. 6. Less han 500,000 pounds. :j: ncludes fish and fish liver oils. Fa conen esimaed a 80 per cen for rnargadne and 55 per cen for soap. Saes was no maerially affeced during he firs wo years of he war in Europe, 1940 and 1941, alhough he impors of some oils from he Far_ Eas y.rere resriced eiher because of he decreased shipping faciliies or he conflic beween China and Japan. n consequence, he supply of fas and oils in he Unied Saes was such as o fulfill he domesic requiremens wihou much difficuly. The Japanese aggression in he Far Eas, he reducion in fishing and whaling aciviies, and he difficulies of shipping changed he fa and oil siuaion in he Unied Saes in 1942 from one of comparaive abundance o one of relaive scarciy. Alhough he domesic producion of fas and oils increased abou 10 per c~n in 1942, he requiremens, under he simulus of war needs and rising incomes, increased even more rapidly. The relaive scarciy became even more marked in 1943, and probably will coninue unil he cessaion of he war. ncreased war needs have arisen no only because of he enlarged demands of he miliary and manufacurers who are producing armamens and muniions, bu also as a resul of he operaion of he lend-lease program. The purchases of fas and oils by he Food Disribuion Adminisraion, inended primarily for lend-lease expor, increased from 329 million in 1941 o 1,027 million pounds in 1942, he laer figure represening abou 10 per cen of he domesic producion in The purchases amouned o 1,682 million pounds in 1943 (able 11). Lend-lease expors will coninue o be large no only during he remaining period of he war bu also in he early poswar period because of he necessiy of supplying fas and oils for relief of he populaions of coninenal European counries. is esimaed ha a leas one half of he fas and oils required for relief in Europe during he firs poswar year will probably be drawn from he Unied Saes. The civilian demand for fas and oils or he producs ino which hey have been manufacured has been grealy inensified as a resul of an increase in nonfarm income arising from he high level of employmen and high wages in indusry. This expanded demand, in conjuncion wih he resriced supply for civilian consumpion and he applicaion of price ceilings, has necessiaed raioning of pracically all he fas and oils, no only o consumers, bu also o he processors of he various food and indusrial producs. s U.S.D.A. Bureau of Agriculural Econonl~~.3The Fas and Oils Siuaion, No. 79, p. 12.

27 FATS AND OLS 27 The naional fa and oil siuaion is a complex one, owing in par o he inerchangeabiliy of he various iems in manufacure and o he compeiion ha prevails beween cerain producs. n consequence, supply and demand as hey relae o some paricular fa or oil affec and are affeced by he supply and demand for oher iems. is seldom ha any one fa or oil occupies an independen saus. Soybean and coonseed oil are srong compeiors in he manufacure of boh margarine and lard subsiues. Wihou resricions, he relaive raes of he consumpion of hese iems in he manufacure of margarine and lard subsiues will depend mainly on relaive prices. To a lesser exen, soybean and linseed oil are compeiors in he manufacure of pains and varnishes, bu he uilizaion of soybean oil is limied because linseed oil possesses superior drying qualiies. n he case of all manufacured producs, he respecive uilizaion of he various iems ends '::o change, eiher because of changes in relaive prices or 'because of an increase in he range of adapabiliy of he specific iems. The influence of price is also eviden on he relaive raes of consumpion of food producs. The consumpion of oleomargarine is influenced primarily by he price of buer; ha is, as he price of buer increases, he per capia consumpion of margarine ends o increase, as long as consumer income remains he same and in paricular when consumer income is a a relaively low level. A similar siuaion prevails in he case of lard and lard subsiues, alhough an addiional facor in he siuaion is of considerable imporance. Lard subsiues apparenly possess cerain physical properies which make hem somewha more desirable han lard o many consumers. Progress is being made a he presen ime in developing a ype of lard more aracive o hose consumers and which will, herefore, improve he compeiive posiion of lard. The rapid expansion in he producion of milk, hogs, flaxseed, and soybeans during he pas few years has been in par a response o favorable prices and in par due o he endeavor o mee warime demands. is hardly o be expeced ha he presen enlarged demands and relaively high prices will be mainained indefiniely following he cessaion of he war. Much will depend on he level of nonagriculural employmen. f a high level of employmen prevails, he Minnesoa producer of buerfa, even a he presen raes of producion, will benefi grealy because he price of buer and he expendiures for his produc depend primarily on he income saus of he nonfarm populaion. The economic saus of he dairy farmer is so closely associaed wih ha of he nonfarm group ha full nonfarm employmen is of prime ineres o him. While he demand for lard is also influenced by he rae of employmen in indusry, bu o a much lesser degree han ha for oher pork producs, he main facors influencing he lard siuaion in he poswar period will be he degree of compeiion beween his produc and is subsiues and he availabiliy of expor oules. The developmen of a ype of lard possessing more desirable physical characerisics from he consumer's sandpoin will be of disinc value o he hog producer. is doubful if he expor marke for lard again will be as favorable as in he 1920's when expors of his commodiy represened abou 35 per cen of he domesic oupu. The large decline in he expor rade during he 1930's was in par due o he lower raes of producion, bu i was definiely influenced by he developmen of a greaer self sufficiency in he coninenal counries o{ Europe, paricularly in Germany and aly, and he empire preference policy of Grea Bri-

28 28 MNNESOTA BULLETN 376 ain which favored he impors of fas and oils from he various Briish dominions. Neverheless, a greaer freedom of rade during he poswar period, resuling from a coninued removal of inernaional rade barriers, will grealy faciliae he movemen of lard and oher pork producs in expor channels and will be of definie value o he domesic hog producer. is likely ha a higher rae of building consrucion, paricularly residenial, will prevail during he pos.. war period. f so, he producer of flaxseed will benefi because he demand and price of linseed oil, he mos imporan iem used in he manufacure of pains and varnishes, are dependen primarily on he rae of consrucion aciviy. The acreage planed o flax in Minnesoa in was abou wo and one-hird imes he acreage in The producion of flaxseed in he Unied Saes in was abou 40 per cen greaer han he oal crushings of flaxseed in , including he crushings from he domesic crop and impored seed, and 10 per cen larger han in Even hough a high rae of building consruoion does occur during he poswar period, i is eviden ha he Minnesoa and oher producers of flaxseed in he norhwes whose coss are relaively high will find i necessary o adjus heir acreage because of he resumpion of impors of flaxseed from Argenina and ung oil from China. This assumes ha he ariff rae on flaxseed in he poswar period will be ha provided by he exising reciprocal rade agreemen wih Argenina. Terminaion of he war will be followed in a relaively shor period of ime by he resumpion of impors of ropical oils which will become compeiors of coonseed and soybean oils in he manufacure of margarine and lard subsiues. As soybeans are produced primarily for he oil conen in conras o coonseed which is a byproduc of coon producion, i is probable ha a reducion in soybean acreage may be necessary. This reducion is more likely o occur in hose regions where he acreage has increased so rapidly during he pas few years. Alhough soybeans have never reached a place of major imporance in Minnesoa agriculure, he coninuaion of he presen expanded acreage will depend on he success ha farmers in souhern Minnesoa have achieved in producing his crop and he reurns received relaive o he reurns from compeing crops. OUTLETS FOR FATS AND OLS The following * discussion of he uilizaion of individual fas and oils by differen oules and he daa in able 12 are based on he average disappearance of he various iems during he five-year period Animal Fas and Oils Edible Tallow-Facory consumpion of his fa averaged 62 million pounds in or more han wo hirds of he oal disappearance of 90 million pounds. Facory use was primarily in he manufacure of shorenings. nedible Tallow and Greases-The oal disappearance of hese fas averaged ~,165 million pounds or almos 20 per cen of he oal disappearance of all animal fas and oils excep buer and lard. Pracically all wen ino indusrial uses, he manufacure of soap accouning for 83 per cen of he oal disappearance, and miscellaneous facory producs, 17 per cen. Oleo Oil-Abou 80 per cen of he oal consumpion of 76 million pounds was used direcly, primarily as a cooking and frying oil. Mos of 1e remainder was used in he manufncure of oleomargarine.

29 FATS AND OLS 29 Oleosearine-The manufacure of food producs furnishes he mos imporan oule for his fa. Shorenings accouned for 61 per cen of he oal disappearance, margarine almos 8 per cen, and oher edible producs 11 per cen. Abou 19 per cen was used direcly. Fish and Fish Liver Oils-These oils, in general, are obained from various ypes of fish and have a wide variey of uses, bu more han 40 per cen of he average annual consumpion of 238 million pounds wen ino he manufacure of soap and 18 per cen ino he manufacure of producs of he drying indusries. While fish oils canno be used o replace linseed oil in he manufacure of ordinary pains, hey possess cerain qualiies which make hem especially adapable o he preparaion of special pains. The group of miscellaneous producs which accouned for 16 per cen of he oal consumpion includes caulking compounds, core oils, illuminaing oils, insecicides, lihographing producs, and paen leahers. s use in food. manufacure is limied o shorenings. Marine Mammal Oils-The use of hese oils which are obained principally from he whale is mainly in he manufacure of soap. Seveny-one per cen of he consumpion of 59 million pounds was used in soap manufacure, and 12 per cen in miscellaneous manufacured producs. Vegeable Oils Babassu-This oil is obained from he babassu nu impored from Brazil. has been only in recen years ha is domesic use has reached significan amouns, he disappearance in averaging 49 million pounds. Soap furnished he mos imporan oule, accouning for 54 per cen of he oal consumpion. Abou 37 per cen of he "Fas and Oils Siuaion. No. 26. oal consumpion was used in manufacuring margarine and oher foods. Casor Oil-The use of his oil has increased rapidly in recen years. The oal consumpion averaged 89 million pounds in , he manufacure of he producs of he drying indusries and miscellaneous producs accouning for 54 per cen of he oal. Dehydraed casor oil has been used increasingly in he drying indusries as a subsiue for ung and perilla oils. Coconu-Mos of he coconu oil used in he Unied Saes arrives here as oil bu some is obained from crushings of impored copra, he dried produc of he mea of he coconu. The mos imporan oule for he use of his oil is he manufacure of soap which accouned for almos 63 per cen of he oal consumpion of 604 million pounds. The proporions used in he hree groups of food producs were: shorenings, abou 3 per cen; margarine, 8 per cen; and oher edible producs, 9 per cen. The use of coconu oil in he manufacure of margarine has declined rapidly. n 1935 he manufacure of margarine uilized 174 million pounds, or 23 per cen of he oal consumpion of coconu oil; bu in 1941, less han 30 million pounds were used or abou 4 per cen of he oal. Large amouns of his oil are also used direcly in cooking. The shor supply of coconu oil and governmen resricions on is use resuled in is disappearance declining o 183 million pounds in Corn-More han 50 per cen of he average annual consumpion of 164 million pounds of his oil was used in he manufacure of various producs, he mos imporan of which was "oher edible producs," such as salad dressings. s exensive direc use is as a salad and cooking oil. An increased indusrial use of corn will probably resu~ in an increased oupu of corn oil. CoUonseed-Wih he excepion of lard and buer, his oil is used in

30 30 MNNESOTA BULLETN 376 larger amouns han any oher fa or oil, he consumpion averaging more han 1,550 million pounds in While significan amouns were used direcly, almos 87 per cen was used in manufacure of various food producs. Shorenings accouned for 62 per cen of he oal disappearance; margarine, 9 per cen; and oher edible producs, 16 per cen. Linseed-The use of linseed oil is confined almos exclusively o he manufacure of he various producs of he drying indusries or in mixing wih prepared pains and varnishes. n consequence, he variaion in consumpion Table 12. Uilizaion of Various Fas and Oils in Manufacure of Food and ndusrial Producs and in Direc Use, Unied Saes, Average Use ANMAL FATS AND OLS nedible Edible allow and allow greases Fish and fish liver Marine mammal Oleo Oleo- searine Per cen Toal Manufacure Food producs Shorenings Margarine Oher edible ndusrial producs Soap Producs of he drying indusries Miscellaneous Loss Direc use Average disappearance, million pounds , VEGETABLE OLS Olive, Use Babassu Casor Coconu Com Coonseed Linseed Olive, inedible, edible and foos Per cen Toal Manufacure Food producs Shorenings Margarine Oher edible ndusrial producs Soap Producs of he drying indusries Miscellaneous Loss Direc use Average disappearance, million pounds ,

31 FATS AND OLS 31 Table 12. Uilizaion of Various Fas and Oils (Coninued) VEGETABLE OLS (Coninued) Palm Soy- Use Palm kep>el Peanu Perilla Rape Sesame bean Tung Toal Manufacure Food producs Shorenings Margarine Oher edible ndusrial producs Soap Producs of he drying indusries Miscellaneous l!.5.1 Per cen l.l Loss Direc use Average disappearance, million pounds Less han.05 per cen from year o year is quie closely associaed wih indusrial aciviy. The consumpion averaged 609 million in , facory consumpion accouning for abou 64 per cen of he oal, mos of.which was used in he manufacure of pains and varnishes. Alhough curren prices of linseed oil in 1942 were above hose of oils commonly used in manufacure of shorenings, such as coonseed and soybean oils, he scarciy of fas ordinarily used in edible producs made i desirable o use linseed oil, which was relaively more abundan, as an ingredien in shorenings for lend-lease expor. Olive Oil-This oil is classified as eiher edible or inedible. The former may be virgin, refined, or pure. Virgin oil represens he firs processing of he olives and has no undergone any chemical process. Refined oil is ha which has been subjeced o some refining process usually for he purpose of clarificaion. nferior grades are frequ!ilnly refined by use of causic soda. Pure olive oil means ha i has no been mixed wih oher oils, bu i may consis of a mixure of virgin and refined. Only a small proporion of edible olive oil is used in food manufacure. Over 93 per cen of he average annual consumpion of 53 million pounds, , was used direcly. nedible olive oil which is obained from he hird or fourh pressing and sulfur olive oil or foos are used primarily in he manufacure of soap and miscellaneous indusrial producs. Palm-All of he palm oil consumed in he Unied Saes is impored from Africa or he Eas ndies. Mos of i is used in facories, he manufacure of shorenings accouning for 35 per cen of he oal disappearance of 277 million pounds; soap, 40 per cen; and miscellaneous indusrial uses, including he in and erne plae indusry, 12 per cen. The oal disappearance of palm oil declined o 131 million pounds in Palm Kernel-This oil is similar o coconu and is used largely for he same purposes. Oher edible producs consiued he mos imporan oule in food manufacure, accouning for

32 32 MNNESOTA BULLETN per cen of he average oal disappearance of 47 million pounds. Abou 62 per cen was used by he soap indusry. Only small amouns of his oil will be available during he remaining years of he war. Peanu-The use of his oil is confined principally o he manufacure of food producs and direc consumpion. The oal consumpion for he period averaged 98 million pounds, 54 per cen of which was used in shorenings, wih smaller proporions in margarine and oher edible producs. More han 28 per cen was used direcly. Perilla-Abou 85 per cen of he annual consumpion of 33 million pounds of his oil was used in he drying indusries. Mos of he remainder was used direcly. The consumpion of perilla oil has declined rapidly during he pas six years owing o he difficulies involved in obaining i from Japan. The disappearance amouned o 112 million pounds in 1936 bu was less han 4 million pounds in Rape-This oil whic4 is impored from he Far Eas is of minor imporance, he consumpion for he period averaging around 11 million pounds. Abou 10 per cen of his oal was used in he manufacure of shorenings and 73 per cen in he manufacure of miscellaneous indusrial producs. Sesame-The consumpion of sesame oil which is impored from Europe and he Far Eas averaged 17 million pounds. Shorenings accouned for 42 per cen of he oal disappearance, and oher edible producs 9 per cen. This oil is a superior edible oil and is considered desirable for salad, able, and cooking uses. is someimes used as a subsiue for olive oil. Direc use averaged more han 41 per cen of he oal consumpion. Soybean-The relaive imporance of soybean oil has been increasing rapidly during he pas 10 years. Less han 36 million pounds were consumed in 1931 bu more han 718 million pounds were used in The average for he period was 400 million pounds. The increased use of his oil has resuled primarily from is subsiuion for oher oils in he manufacure of various food and indusrial producs. The manufacure of shorenings averaged 43 per cen of he oal consumpion during he five-year period; margarine, 15 per cen; and oher edible producs more han 7 per cen. Alhough soybean oil is difficul o saponify, i is used o some exen in hard soap, and hydrogenaed soybean oil can be used successfully in sof soap. The soap indusry accouned for almos 4 per cen of he oal consumpion. This oil when subjeced o hea reamen is paricularly adapable o he manufacure of whie or lighcolored enamel pains for inerior use. is one of he semidrying oils and as such canno be considered a saisfacory subsiue for linseed oil. When used wih he laer, i usually has been mixed wih perilla oil. A mixure of 40 per cen perilla and 60 per cen soybean oil produces a degree of hardness in pains similar o raw linseed oil. Abou 8 per cen of he oal disappearance was used by he drying indusries in This oil is also used exensively in cooking, direc use accouning for 16 per cen of he average annual consumpion. Tung-A very small amoun of his oil is produced in he Unied Saes; consequenly, he annual consumpion has depended on he volume of im pors from China. is similar o linseed and perilla oils in is properies, and is use is confined mainly o he manufacure of he producs of he drying indusries. The consumpion averaged 98 million pounds in 1937-!1, facories using 84 per cen of he oal. Mos of he remainder was used direcly in mixing wih prepared pains and varnishes. The disappearance de clined o 17 million pounds in 1942.