ABA recently released an infographic about the demand for soybean oil and vegetable oils. The demand has currently exceeded the supply, causing prices to rapidly increase.
The price of soy oil in the U.S. has tripled in the past year, adding $12B to consumers' food costs. Economists project that later this year, there may not be enough supply for all food producers. Economic analysis shows that the major driver of this market disruption is the increased use of edible oils to make biofuels for diesel engines.
ABA would like to remind the baking industry of the following:
- The baking industry, which employs one of the largest trucking fleets in the country, supports renewable fuels and a green agenda as ABA's members engage in sustainability initiatives to minimize their environmental footprints.
- Some wholesale bakers will likely be unable to access soybean oil by the end of this year because they cannot compete in the marketplace and are unable to procure soy oil needs at any price.
- The baking industry needs a short-term pause on upcoming federally mandated increases of biodiesel and advanced biodiesel production, which utilize large volumes of soybean oil. The government directive, at the moment, prevents the baking sector from being able to obtain a reliable supply of edible oils as producers divert supply away from food manufacturing and to renewable biodiesel production.
- ABA believes that a pause on biodiesel and advanced biodiesel under the Renewable Fuel Standard Program is the best solution to provide temporary relief for the baking sector as the industry grapples with supply chain hurdles across the board.
- ABA is concerned about the impact these challenges will have on kitchen table budgets, especially in disadvantaged communities, food banks, and feeding programs.
- EPA must consider commodity price impacts and eventual food price impacts when setting its upcoming biodiesel and advanced biofuel volume production levels.
Click here to see the full infographic.
