SOUTHERN JOURNAL OF AGRICULTURAL ECONOMICS JULY 1977 DEMAND AND SUPPLY OF VEGETABLE OIL PRODUCTS IN THE UNITED STATES: A SHORT-RUN ANALYSIS*

Over the last decade consumption of vegetable where: oil products in the United States has increased enormously. Per capita consumption of vegetable oil p = nxl vector of commodity prices, products rose from 30.6 pounds in 1965 to 43.1 q nxl vector with the ith element representing pounds in 1975-an increase of more than 40 percent. quantity of the ith commodity produced, This expansion continues a historic trend and repre- v = mxl vector of input prices, sents the single largest ten-year increment in the last x = mxl vector of input quantities, fifty years [1, 2, 3]. The principal vegetable oils used * = optimizing value for the problem. in domestic products are soybean, cottonseed and corn oil. For this reason the increase in consumer Relation (1) represents the basic static supply demand for vegetable oil products over the last function. decade has had an important effect on the derived The supply function given in (1) is somewhat demand for soybeans, cottonseed and corn. limiting in generality. Not only does it neglect the This paper reports the results of a study per- impact of past prices on current production but also formed to determine the levels of the short-run allows no explicit role for commodity storage. Th