The Fats and oils situation

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Material Information

Title:
The Fats and oils situation
Physical Description:
301 v. : ill. ; 26-28 cm.
Language:
English
Creator:
United States -- Bureau of Agricultural Economics
United States -- Agricultural Marketing Service
United States -- Dept. of Agriculture. -- Economic Research Service
United States -- Dept. of Agriculture. -- Economics, Statistics, and Cooperatives Service
United States -- Dept. of Agriculture. -- Economics and Statistics Service
United States -- World Food and Agricultural Outlook and Situation Board
Publisher:
The Bureau
Place of Publication:
Washington
Publication Date:
Frequency:
frequency varies

Subjects

Subjects / Keywords:
Oil industries -- Periodicals -- United States   ( lcsh )
Oils and fats, Edible -- Economic aspects -- Periodicals -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
periodical   ( marcgt )
serial   ( sobekcm )

Notes

Statement of Responsibility:
United States Department of Agriculture, Bureau of Agricultural Economics.
Dates or Sequential Designation:
FOS-1 (Mar. 1937) - FOS-301 (Oct. 1980).
Issuing Body:
Issued by: Agricultural Marketing Service, 1954-Mar. 1961; Economic Research Service, May 1961-<Oct. 1977>; Economics, Statistics, and Cooperatives Service, <May 1978>-July 1980; Economics and Statistics Service, Oct. 1980.
General Note:
"Approved by the World Food and Agricultural Outlook and Situation Board," Oct. 1977-Oct. 1980.
General Note:
Title from caption.
General Note:
Item 21-D.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 000502965
oclc - 01588232
notis - ACS2699
lccn - 46039840 //r82
issn - 0014-8865
Classification:
lcc - HD9490.U5 A33
ddc - 380.1/41385/0973
System ID:
AA00005305:00028

Related Items

Succeeded by:
Fats and oils outlook & situation

Full Text


J.r.. ..


UNITED STATES DEPARTMENT OF AGRICULTURE
BUREAU OF AGRICULTURAL ECONOMICS


WASHINGTON


JUNE 14,


1939


TH E FATS A.ND OI LS S I T U A T-
mmm ase emm mme eme em---- --------- m mum


*1
;^i.


AVERAGE WHOLESALE PRICES OF REFINED LARD AND. LARD SUBSTITUTES
AT CHICAGO AND COTTONSEED OIL AT NEW YORK. 1930 TO DATE


~m.s
.. .... ..
W.2.












Af,.
HY


J3-,

1930
ULal ana T fo ur AGItCIAZurI


juL.; J ML aJ W JUL JW.. Jrt' J UL LV JUI' JM. .iY di. ..a', JULy AJ.
1931 1932 1933 1934 1935 1936 1937 1938 1939
LrG NMI A B1 I uU Or AGrIIULTIIUIAL ECNO


WITH INCREASINd SUPPLIES OF LARD, LARD PRICES IN MAY 1939 WERE
THiE -LOWEST IN MORE THAN 5 YEARS. SUPPLIES OF COTTONSEED OIL ARE
SMALLER THIS YEAR THAN LAST, AND PRICES OF COTTONSEED OIL AND OF
VEGETABLE COOKING FATS DURING THE PAST 10 MONTHS HAVE BEEN HIGH IN
RELATION TO LARD PRICES.







. ... :: ... ..


.. ., ....
Ft


S.. .





P08-28


Table 1.- Price per pound of specified fats and oils,
May 1937 and 1938, and March-May, 1939


: May 1939
Fat or ol z: 1937 # 1958 u Mar. : Apr. I May


Domestic prices -
Butter, 92 score, N. Y.
Oleomargarine, dom. veg., Chicago
Lard, prime steam, Chicago
Lard refined, Chicago
Lard compound, Chicago
Coconut oil, edible, N. Y.
Cottonseed oil, crude, 8. E. mills
Cottonseed oil, p.s.y., N.Y.
Soybean oil, refined, N.Y.
Peanut oil, domestic refined, N.Y.
Rape oil, refined, N.Y.
Oleo oil, No. 1, N.Y.
Oleostearine, bbls., N. Y.

Corn oil, refined, N. Y.
Olive oil, edible, N. Y.
Teaseed oil, crude, N. Y.

Coconut oil, crude, Pacific Coast
Tallow, inedible, Chicago
Grease, house, N. Y.
Palm oil, crude, N. Y.
Olive oil foots, bbls., N. Y.
Palm-kernel oil, denatured, N. Y.
Babassu oil, tanks, N. Y.
Sardine oil, tanks, Pacific Coast
Whale oil, ref., winter bleached, N. Y.

Linseed oil, raw, Minneapolis
Tung oil, drums, N. Y.
Perilla oil, drums, N. Y,
Soybean oil, crude, f.o.b. mills
Menhaden oil, crude, f.o.b. Baltimore

Castor oil, No. 3, N. Y.
Cod oil, bbls., Newfoundland, N. Y.

Foreign prices 3/
Cotton oil, crude, naked, Hull
Copra, Resecada, Philippine Islands
Palm-kernel oil, crude, Hull
Whale oil, crude, No. 1, London 5/
Tallow, beef fair-fine, London
Linseed oil, naked, Hull


:Cents

S32.27
16.38
a 11.92
: 12.88
: 13.25
S9.15
: .91
10.50
a 12.30
S13.15
S12.55
S12.50
9.62

S12.45
S32.53
: 10.12

S6.29
8.22
S 8.28
S 6.02
S11.35
S5.95
:1/ 9.75
6.93
S10.80

S10.90
S13.82
S11.54
S8.96
5.65

S10.25
S 6.93


S 6.58
:4/ 3.13
S5.95
S4.96
S5.99
S 6.61


Cents

24.30
14.50
6.53
7.52
9.25
4.38
5.78
6,90
7.50
9.12
10.80
8.19
6.62


Cents

26.36
14.75
8.12
9.25
10.25
5.44
7.03
8.10
8.56
10.06
11.16
8.50
5.97

9.62
25.60
7.09

3.09
4.45
3.89
3.52
8.27
4.15
6.41
4.93
9.90

8.90
11.39
10.33
5.69
4.67


9.25 8.88
6.67 2/4.00


3.94
1.32
4.07
3.27
4.38
5.29


3.67
4/1.29
3.72
3,16
3.87
5.10


3/ Futures. Y Untanked.
current monthly rates of exchange.
crude #1, ex. tank, Rdm., minimum 500


SConverted to U. S. eents per pound at
4/ Preliminary. 5/ Prices are for
ton lots, beginning March 1, 1939.


Cents

23.11
14.50
6.33
7.28
9.25
4.38
5.53
6.60
7.50
8.98
10.80
8.10
6.22

8.88
25.07
9.48

2,79
5.02
4.84
3.82
6,99
3.43
6.12
4.45
8.20

8.70
16.05
9.68
4.72
4.21

8,35
2/4.33


3.57
4/1.33
3.66
3.25
3.94
5.08


C

23.
14.5
6.53
7.50
9.28
4.38
5.56

7.50
8,94
10.80
8.00
5.88

8.88
25.07
9.50

2.97
4.99
4.82
3.82
7.06
3.45
6.28
4.33
8.20

8.68
17.75
9.68
4.92
4.27

8.25
_4,33


3.71

3.60
3.54
3.81
5.26


8.88
25.07
8.94

2.89
5.14
4.94
3.82
7.03
3.45
6.12
4.07
8.20

8.58
15.16
9.67
4.91
4.07


---- --


- 2 -






FOS-28


-----------r-------l------- ----r--------------
THE FATS AND OILS SITUAT ION
------- -------------------- ---------------


Summary


Prices of most fats have shown little change since early last

summer, the Bureau of Agricultural Economics reports. The general trend

in lard prices, however, has continued downward since late 1937, while

prices of tung oil have advanced sharply in recent months. Prices of

fats and oils generally declined sharply in late 1937 and early 1938,

largely as a result of weakness in general demand. A moderate recovery

occurred in prices of some fats in early summer last year.

With the partial recovery in hog production from the low levels

of 1935-37, domestic lard supplies increased in 1938, and marked increases

are expected for 1939 and 1940. Lard production in 1940 may total almost

as much as the average for the 5 pre-drought years, 1929-33. But exports

of lard in 1940 probably will continue to be much smaller than in the pre-

drought period, chiefly because of the virtual loss of the German lard

market since 1933.

Supplies of tung oil at Hankow, China, are reported to be large.

But transportation difficulties arising from the closing of the Yangtze

River to European and American traffic, and hostilities along the Hankow-

Canton Railway, have brought about a shortage of supplies at coastal

shipping points, thus accounting in large part for the sharp rise in

prices of tung oil in recent months.


- 3 -






RECENT TRENDS IN PRICES OF FATS AND OILS

Prices of food fats show downward trend

Lard.-After reaching the highest level in 9 years in 1935, lard
prices declined to some extent in 1936, but recovered part of the loss in
early 1937. During the last 3 months of 1937, however, lard prices declined
sharply, and the trend has been downward since that time. In May this year,
the average price of prime steam lard at Chicago was 6.5 cents per pound,
slightly higher than a month earlier but otherwise the lowest since early 193

Reductions in the number of hogs slaughtered and in the yields of lard
per hog resulting from the droughts and feed-grain shortages of 1934 and 1936
brought about a marked decrease in domestic lard production. In 1935, the
production of lard under Federal inspection totaled only 662 million pounds
compared with the 5-year (1929-33) average of 1,618 million pounds. Although
increasing after 1935, production in 1938 amounted only to 1,076 million
pounds. During the first 4 months of 1939, the production of lard under
Federal inspection totaled 414 million pounds, 14 percent more than in the
corresponding period of 1938. With an increase of 18 percent in the fall
pig crop of 1938 compared with that of 1937, and a further increase expected
for the spring pig crop of 1939, inspected lard production this year may total
somewhere near 1,300 million pounds. Production in 1940 may be nearly as
large as the average for the 5 years prior to 1934.

Although exports have increased with increased lard production, exports
in 1940 probably will not reach so high a level as in the immediate pre-drought
period, chiefly because of the marked reduction in takings by Germany since
1933. In the period 1929-33, exports of lard from the United States averaged
644 million pounds annually, of which exports to Germany accounted for nearly
one-fourth. In nore recent years, German takings of American lard have been
almost negligible, due largely to the present German policy of regulating
foreign trade along bilateral lines.

Cottonseed oil.-In contrast to the marked increase in domestic lard
production, the production of cottonseed oil thus far this year has been
smaller than that of a year earlier, when the supply of cottonseed for crush-
ing was unusually large following the record cotton crop of 1937. Influenced
by the increasing supplies of lard, however, prices of cottonseed oil averaged
lower throughout the first 5 months of 1939 than a year earlier, and have
been the lowest since early 1934. Prices of cottonseed oil (and of vegetable
cooking fats), nevertheless, have been relatively high compared with lard
prices.

Prices of cottonseed oil usually average about 2 cents per pound lower
than lard prices; but in the past 10 months prices of cottonseed oil have
averaged only about half a cent lower. Prices of vegetable cooking fats
usually are close to lard prices, but prices of such fats in recent months
have averaged considerably higher. (See chart on cover page.)

Other food oils.-Prices of soybean oil, oleo oil, corn oil, and peanut
oil also have been lower thus far in 1939 than a year ago. With a record
crop of soybeans in this country in 1938, and a still larger production expect-
ed this year, the domestic production of soybean oil in 1939 and 1940 probably
will show further increases. Factory production of crude soybean oil in 1938
totaled 323 million pounds compared with 194 million pounds in 1937, and a


-4-


FOS-28





0S-28 ,.- 5-

5-year (1929-33) average of 26 million pounds. During the first quarter of
1939, factory production of crude. soybean oil totaled 121 million pounds, 48
percent more than in the first quarterpof 1938.

Manchurian supplies of soybeans available for export for the 1938-39
marketing year are reported to be slightly larger than those of the preceding
year, and a larger Manchurian crop is planned for the current year. Despite
increasing production, the trend in prices of soybeans and soybean products
at Dairen has been upward since early 1938, principally because of increased
European demand. Germany and Italy have been heavy buyers in recent months.
Both these countries now have barter agreements with "Manchoukou" whereby soy-
beans are taken in exchange for industrial products.

The United States has exported soybean oil on balance in recent months.
More than 3 million pounds of soybean oil produced in this country were ex-
ported in 1938, and net exports of soybean oil from the United States during
the first quarter of 1939 totaled more than 1 million pounds.

The combined factory production of corn oil, peanut oil, and oleo oil
in the first quarter of 1939 was about the sane as in the first quarter of 1938.
Production of corn oil and peanut oil was larger than a year earlier,however,
while production of oleo oil was smaller. (Table 2.)

Prices of inedible soap fats higher than a yar ao

Tallow and grease.-The peak in tallow prices in recent years, unlike
that for lard, occurred in 1937, when the price of inedible tallow at Chicago
averaged 7.51 cents per pound compared with 7.97 cents in 1929. Tallow prices
declined sharply in late 1937 and early 1938, and the average price for 1938
of 5.03 cents was the lowest since 1934. Since June 1938, tallow prices have
fluctuated near the 5-cent level. The price of grease has followed the price
of tallow closely in recent years.

In May 1939, the average price of inedible tallow at Chicago was 5.0
cents, about the sane as a month earlier, but 0.6 cents higher than in May
1938, when tallow prices were the lowest for that year. The price of house
grease at New York in May this year averaged 4.82 cents, nearly 1 cent higher
than in May 1938.

Domestic tallow production has been large since 1935. The relatively
high level of tallow and grease prices in 1937 was due mainly to the strong
demand for soap and lubricants resulting front the generally favorable business
conditions in that year. With the business recession and decline in industrial
payrolls in late 1937 and early 1938, however, tallow and grease prices de-
clined sharply. Some improvement in prices occurred in early sumner last year,
but since then tallow and grease prices have remained relatively stable.

Edible-soap oils.-Prices of coconut oil, palm oil, palm-kernel oil,
fish oils, and whale oil also reached their highest levels for recent years
in 1937, but declined sharply in late 1937 and early 1938. Since August 1938,
prices of pain oil have shown a slight tendency to rise. But prices of other
edible-soap oils declined somewhat further after August, although prices of
coconut oil and fish oils have recovered slightly during the past few months.







The average price of crude coconut oil at Pacific Coast markets in May
was 6.0 cents per pound (including excise tax) compared with 5.8 cents in
April and 6.1 cents in May 1938. Prices of palm-kernel, babassu, sardine,
menhaden, and whale oils also were lower than a year earlier, while prices of
palm oil were higher. (Table i.)

Prices- of ding oils show mixed trends

Linseed and porilla oils.-As in the case of most other oils, prices of
linseed and perilla oils in 1938 were lower than in 1937. But the decline in
prices of these oils from 1937 levels was less marked than that in prices of
most other oils, chiefly because building activity nnd the demand for paint
oils declined less than industrial activity and the demand for food and soap
oils in late 1937 and early 1938. And decreased world production of flaxseed
and porilla seed has tended to support prices of linseed and porilla oils to
some extent.

The preliminary estimate of world production of flaxseed for 1938 (ex-
cluding China) is 128 million bushels compared with 130 million bushels in
1937. Production of perilla seed in Manchuria, the principal producing area,
totaled only 203 million pounds in 1938 compared with 265 million pounds in
1937, according to reports of the Foreign Agricultural Service.

Prices of linseed oil declined from January through August 1938, but
since August prices have shown a slight tendency to advance. In May this
year the average price of raw linseed oil at Minneapolis was 8.7 cents per
pound, about the sane as in April, but 0.2 cents lower than a year earlier.

After declining from January through June last year, prices of perilla
oil advanced in July and August, but declined again from September through
January 1939. Since January, prices of perilla oil have shown little change.
The average price of perilla oil at New York in May this year was 9.7 cents
per pound compared with 10.3 cents in May 1938.

Tung oil.-The movement of prices of tung oil in recent years has been
quite different from that for linseed and perilla oils. Tung oil is unique
as a drying oil in some respects, forming a very tough waterproof film, and
has many special industrial uses. The average price of tung oil at New York
advanced from about 9 cents per pound in 1934 to 17 cents in 1935. Prices of
tung oil, however, declined after 1935 to less than 11 cents in June 1938.
The sharp rise in 1935 apparently was due in part to the recovery in indus-
trial production and in the demand for tung oil for industrial purposes in
that year, and in part to reduced production in China.

Since June 1938, the price of tung oil again has advanced sharply.
In May this year the average price at New York was 17.8 cents compared with
16 cents in April and 11.4 cents a year earlier.

Although the 1938 tung nut crop in China was of fairly good size, dif-
ficulties have boon experienced in moving out sufficient oil to meet the ex-
port demand. These difficulties have resulted from the closing of the Yangtze
River to foreign traffic by the Japanese, and Sine-Japanese hostilities along
the Hankow-Canton Railway. Tung oil prices at Hankow, where largo supplies are
available, have declined in recent months. But prices at Shanghai and Hong
Kong have advanced, owing to the smnll supply available from the interior.


- 6 -


F0-28g





0os-2e -7-

Table 2.- Production and apparent disappearance of fats and oils in the
United States, January-March, 1938 and 1939


: Production / L Apparent
Pat or oil Jan.-Mar. : disappearance 2/
: 'Jan.-Mar.
1938 1939 : 1938 1939
:Mil. b. Mil. Ib. Mil. lb. Mil. lb.
3.
Cottonseed oil ................ ..: 596 391 514 322
Coconut oil ..... ..................: 75 75 131 165
Soybean oil ............................. 82 121" 63 106
Palm oil .... ..........................: --73 102
Corn oil ..............e... ............. 32 33 39 42
Peanut oil ........................,......: 22 28 19 22
Olive oil, edible .........,...... ......: 2 7 21 19
Castor oil ...............1.............: 14 18 12 17
Palm-Kernel oil ..........................: 1 3 26 7
Babassu oil ............. .............. 12 15 9 12

Linseed oil .....e... ..... ........... ...: 126 139 94 120
Tung oil .............................c...: 1 25 26
Perilla oil ................c..........:. 8 15

Other vegetable oils 5/...................: / 2 11 19

Butter 6/................................. 358 389
Lard. J/................. c.. ................: 287 322
Tallow, inedible ................ ........: 196 219 196 209
Fish oil ..................e............: 12 24 29 53
Marine mammnl oil ..................e....: 27 23 20 7
Fish-liver oil ..a..... ..... ... ........: / 4/ 13 19
Grease ...................................: 80 85 85 87
Tallow, edible ...........................: 22 25 20 25
Oleo oil .....,...........................: 24 18 22 19
Steari,,e, animal, edible ................. 13 10 12 11
Wool grease ............................: 1 1 2 2
Neatsfoot oil ....* ....................: I 1 1 1
Total .................. .... ...: 1,983 1950 --
Total, excluding butter and lard ....; 1,338 1,239 1,445 1,427

SFactory production, Bureau of the Census, except as otherwise noted.
SComputed from data on production, trade, and stocks.
Not separately reported.
Less than 500,000.pounds.
Includes olive foots, sesame oil, rape oil, teaseed oil, inedible olive oil,
oiticica oil, and vegetable'tallow.
g Factory production only.
-J Federally inspected production only.






n


UNIVERSITY OF FLORIDA
3 126II 2 0890I IllI 07 I IIII
3 1262 08904 2507


" 9-28 8 a

Table 3.- Oleomargarine: Production and materials used in manufact@i. :
United States

April : 1939 1/ -
Item
I 1937 : 1938 : .Feb. Mar. Apr.
S :
:1.000 lb.1,000 lb.1,000 lb.1,000 lb.. 1,000
Oleo oil ..................... 1,359 1,412 1,289 1,326 1,032
Oloostearine .................: 279 240 228 271 .237
Lard neutral .............. 173 138 115 112 94
Oleo stock ................... 158 163 132 95 81
Total animal ...............: 99 1.953 11764 1,80g 1,444
.** =


Cottonseed oil ...............t
Soybean oil .............,.:
Peanut oil .............,...:
Corn oil .........o....... :

Total domestic vegetable 2/:

Coconut oil *....:............:
Babassu oil *,...............:
Palm-Kernel oil .........,,.,.3
Rice oil 3/..................
Palm .........................

Total foreign vegetable Y/ :
I
Total fats and oils ..........

Milk ........... .. .....
Salt and other miscellaneous .-

Production of oleomargarine ..:


14,789
2,752
395
64


18,000


4,096
3,032
1,136
164


11,422
2,356
275
46


9,412
4,395
194
62


9,678
5,452
203
51


7,1483
4.925
178
27


14,099 14, 063 15,384 12,613


8,981
.971
560
34


5.295
1,168
44


8,428 10,546 6,507

28,397 26,598 22,334


4,729
1,596
173


3,428
1,247
126


6,498 4,801 j

3,.686 18.858


6.359 6,063 5, 422 5,s61 4,561
1611 1,446 1,256 1.316 1,078


34,355 32,662


27,701 29,417 23,325 1


l Preliminary.
/ Ordinarily domestically produced.
SBureau of the Census; probably oil imported from Japan.
SNot domestically produced.

Computed from Bureau of Internal Revenue records and Internal Revenue
Bulletin.


ii


- ~-- o


2


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