A group of University of Chicago students recently staged a protest outside the Chicago Mercantile Exchange to call for repealing the Onion Futures Act of 1958, a little-known federal law that bans trading in onion futures. The demonstration, which took place on October 19, featured students dressed in onion-themed attire and holding signs advocating for lifting the ban.
The protest was partly supported by Kalshi, a prediction market platform valued at $40 billion. Kalshi paid for transportation to the event and sent representatives to participate. The company’s co-founder and CEO, Tarek Mansour, has publicly criticized the law, describing it as an outdated and unjust restriction on trading derivatives linked to onions. Mansour emphasized during a financial conference in Arlington, Virginia, earlier that month that trading onion derivatives should be permitted.
The 1958 law was enacted following a manipulation scheme in the 1950s by Sam Siegel, a Chicago cold-storage facility owner, and Vincent Kosuga, an onion farmer from New York. They cornered the onion market, controlling the vast majority of onions in Chicago and orchestrating a scheme that first inflated and then sharply depressed prices. Their actions led to many onion farmers going bankrupt, prompting congressional intervention. President Dwight D. Eisenhower signed the Onion Futures Act, making onion futures trading the only agricultural commodity banned under federal law.
Some experts view the push to repeal the law as symbolic. Craig Pirrong, a finance professor at the University of Houston, noted that Kalshi’s focus on onions is largely performative but could have wider implications. A 2010 amendment to the act also bans trading on movie box office receipts, and its repeal could open more lucrative markets for Kalshi. Pirrong suggested that lifting the ban might benefit Kalshi’s broader business interests beyond just onions.
In contrast, Scott H. Irwin, an agricultural economist at the University of Illinois Urbana-Champaign, interpreted Kalshi’s campaign as a principled stance reflecting the company's ethos that any asset should be tradable. He expressed surprise that the issue has gained public attention after decades of obscurity, calling it an unexpected development in public policy debates.
The National Onion Association, representing U.S. onion growers, opposed repealing the law. The association stated this week that growers continue to support the prohibition, emphasizing the vulnerability of onions to market manipulation due to their perishability and seasonal nature.
Research dating back to 1963 suggests that banning onion futures may have had unintended consequences, including lower prices for farmers at harvest and higher prices for consumers. Nonetheless, the law remains in force.
Kalshi, which offers trading on various topics ranging from sports events to elections, has framed the Onion Futures Act as an example of government policy failing to address the real issue—market manipulation by individuals rather than the commodity itself. Alongside promoting the protest, Kalshi also allows trading on whether Congress will repeal the ban, with current odds below 30 percent by 2030.
The students involved in the protest belong to For Our Futures, an unaffiliated and unregistered group that opposes the Onion Futures Act on grounds of economic freedom. They have organized various campus events, including distributing onions and creating songs advocating free markets. Kalshi’s Mansour has amplified the group’s content on social media.
The debate over the Onion Futures Act now represents a broader conversation about market regulation, historical lessons, and the evolving nature of trading in financial derivatives.