Fats and Oils

Extract

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Fats and Oils

SIC 2070

NAICS 311225

Industry firms extract and process a variety of fats and oils, mostly for use in human foods and animal feed. Major production categories include cottonseed

oils, soybean oils, other vegetable oils, animal fats and oils, and margarine, shortening, and related products. (Production of butter, however, is not included under this topic.)

INDUSTRY SNAPSHOT

In the early 2000s, global supplies of fats and oils were sufficient to meet steadily increasing world demand. According to analysis of the Food and Agricultural Organization (FAO) of the United Nations, consumption of oils and fats was expected to grow by about 5 percent in 2005, while consumption of oilcakes and meals (used for livestock feed after oil has been extracted from seeds by pressing or grinding) was expected to increase by 4 percent. World consumption of oilseeds rose steadily through the 1990s, reaching 347 million metric tons (mmt) in 2004. Of this total, about 288 million metric tons (mmt) were expected to be crushed for oil or oilmeal.

Growing demand in developing countries was expected to account for more than 60 percent of this increase. Soy and palm oil consumption was expected to increase the most, while use of sunflower seed oil was likely to decrease. Use of non-edible oils was also expected to rise, most notably for the production of biodiesel fuels.

Global trade in oilseeds and oilseed products experienced astronomical growth in the late twentieth century, due largely to expanded production of soybeans. Trade in oilseeds, cakes, and meals increased almost 900 percent from 1964 to 2004, while the global market for vegetable oils during the same period grew by a stunning 1,800 percent. While trade slowed in 2004, it was expected to pick up again in 2005, rising by 5 to 6 percent. Most of the increase, according to the UN's Food and Agricultural Organization (FAO), would be attributed to palm oil, with trade in soybean and rapeseed oils also increasing. The market for sunflower seed and ground seed oils, however, was expected to shrink. Although the United States and the European Union have historically led world production, much of the industr...

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