Written by Zac Kreider
The vegetable oil market in the United States is massive. The restaurant industry, snack food manufacturing, and grocery stores cover the edible oils. Now, add for the other industries that use oil such as cosmetics, health and beauty, plastics, biodiesel, and even vehicle tires for additional consumption of vegetable oils as well as other industries I'm not accounting for. The United States consumed 34.86 billion pounds of vegetable oil in 2020. Our national market is very appealing for imported vegetable oils as our consumption continues to grow.
2020 and the first half of 2021 have shown us that imported oils are not sustainable. Many rely on imports as they are cheaper than our local supply. One reason for such a spike in demand in the USA vegetable oil market is that the imported oils were not as readily available due to the shipping industry being bottlenecked at the ports during the covid pandemic; this left many scrambling for oil. Ships that normally would be unloaded upon arrival to the USA were now sitting in port for weeks before they could get unloaded. The docks were short on labor during a huge influx of products coming into the USA as we were all sitting around internet shopping and eating more than we ever have. Improvements have been made but the problem is still there. Shipping costs for containers rose to 400% or more during the pandemic. The demand for empty containers was so high abroad that containers were being loaded on shipping vessels empty and shipped back overseas to speed up the turnaround time to get products into the USA.
Shipping distance and lead times are lengthy and currently are not reliable. Imagine sunflower oil that is produced in the Ukraine, put in a container, loaded on a ship, travels through the Panama Canal, arrives at the port of Los Angeles, California and is then transported by truck or rail car to Chicago, Illinois. This is a real scenario. Colorado Mills was able to capture this business as we outperformed on quality and lead times. Now take this scenario and multiply it across the billions of pounds of oil that are moved around the world to be sold into the United States. Imported oils are also popular amongst local oil suppliers as they can blend cheaper imported oil with their local oil giving an advantage on price while making the minimum standards.
The United States of America consumes more oil than we produce. We also don’t grow enough crops that produce the needed variety for chefs, food manufacturers, and the manufacturing markets. Quality, performance, variety, and price are all drivers of the vegetable oil market. One thing that Colorado Mills is very proud and passionate about is the fact that we know where our supply comes from. Some of you reading this have probably been to our facilities, stood on dirt roads talking to our farmers and currently support our network. Thank you! We are so proud of where our source of seeds come from we put “Sourced In The USA, Made In The USA'' on our boxes. I can guarantee you that Colorado Mills will stay 100% made in America. We are in your backyard, family owned, and believe that when we all work together we can all achieve more.