Fats and Oils in World War II: Production and Price-Supporting Programs

Excerpts from the Introduction: Initial efforts to spur production of fats and oils in the United States following outbreak of war in Europe in 1939 were lukewarm and hesitant. Production adjustment programs during the uneasy thirties had been oriented in the direction of restricting acreage of principal crops, first through contractual agreements between the Government and farmers, and later by means of "conservation” programs and payments. Soybeans and cotton, for example, were defined as soil-depleting crops, and participating farmers could expand acreages of these crops only within their total farm allotments of soil-depleting acres if they wished to receive conservation payments. The movement of prices during the first year of war in Europe did not encourage expansion in oil-bearing crops. Prices of fats and oils had made a strong recovery in 1935-37 from the depression lows, but the upward movement, resulting largely from the world scarcity of lard following severe droughts in the United States, was short-lived. Prices plunged downward in1938 and 1939, and for some commodities, such as lard, the downward trend persisted through the greater part of 1940. The abnormally low level of prices in 1939 and 1940 resulted from two major factors in world markets – the self-imposed restrictions on imports by Germany and the rapid upward trend in world production of low-cost vegetable oils and whale oil. Little effort was made in 1940 to increase production of fats and oils. Farmers were urged to reduce the acreage of peanuts, and the two-price system designed to make expansion in peanut acreage unattractive was continued. A tight clamp was maintained on soybean and flaxseed acreage, and measures were being explored to bring about further reductions in cotton. Hog prices were depressed, but in the early fall the Secretary of Agriculture strongly urged farmers to increase pork production with the assurance that rising demand would bring an increase in hog prices.