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Canola Continues To Be The Golden Crop

Canola continues to be the darling of the vegetable oil market – and the industry is urging Prairie farmers to keep cranking up production.

Western Canadian farmers have painted the Prairies yellow with canola, but processors say they want more.

The Canola Council of Canada wants farmers to produce 15 million tonnes of canola by 2015. Some wonder if it’s enough. Alberto Weisser, chairman and chief executive officer of Bunge, recently said Canada needs to produce closer to 20 million tonnes to sustain domestic crushers and supply export seed customers.

“I agree the potential demand is there,” Richardson International president Curt Vossen said in an interview at the Canola Council of Canada’s 44th annual meeting in late July.

“The domestic (canola) crush has tripled in the last 10 years.”

In the last two years, the industry has spent upwards of $1 billion to expand crushing capacity, and this year is expected to process 6.6 million tonnes of canola.

Canada’s five crushing companies now operate 13 plants with 7.45 million tonnes of annual crushing capacity. Add crushers at Velva and Enderline, North Dakota and North American capacity sits at 8.54 million tonnes.

And more crushing capacity is coming. Bunge is replacing its 1,100-tonne-a-day Altona plant with one that can handle 2,500 tonnes a day and will upgrade its plant at Fort Saskatchewan, Alta. A 1,000-tonne-a-day plant is under construction at Hallock, Minn., and Legumex Walker has announced plans to build a slightly bigger plant at Warden, Wash.


When complete, North American crushers will need around 10 million tonnes of canola a year, Vossen said. Throw in annual canola seed exports and total demand approaches 17 million to 18 million tonnes a year.

Canadian canola production averaged almost 11 million tonnes the last five years.

“If you can double (production) in five years it doesn’t take much to go up another 25 per cent in the next five years,” said Vossen.

Despite the sanguine forecast, Vossen doesn’t rule out the possibility of surplus crushing capacity, as happened during the last wave of expansion in the 1980s. But said everyone is keen to avoid that because plants are too expensive to run at less than full capacity.

“If you do the math, we need more acres today to meet the plant capacities of the plants being built today,” he said. “You’re making an investment on a flier that those acres will continue to grow at the same pace as your growing capacity and that remains to be seen.”

Some of those new plants – Hallock and Warden – are being built by new, inexperienced entrants and their pockets aren’t as deep as the established competitors.


And they’ll have to compete for canola supply. The new plant in Hallock, an hour and a half southeast of Altona, will be the third crusher located on the eastern edge of North American canola production. It will compete for seed with Altona and Viterra’s Ste. Agathe facility. Those plants already compete for seed with Bunge’s Harrowby plant in western Manitoba and ADM’s facility at Velva.

In addition, canola crushers in Windsor and Hamilton, Ont., and Beacancour, Que., are bidding for the same canola.

Meanwhile, farmers, especially in Manitoba’s Red River Valley, are increasing soybean plantings. Manitoba farmers planted an estimated 590,000 acres of soybeans this year and are headed for one million acres, Vossen said.

“Some of that – not all of it – will be on canola ground,” he said.

That’s why canola yields need to increase and will, breeders say. The last 10 years they’ve increased an average of a half a bushel a year and that’s likely to continue because of competition between seed companies, said David Harwood, Pioneer Hi-Bred’s technical services manager.

“As a group of product developers we are in a foot race with one another to create more genetic gain,” he said during a panel discussion at the Canola council meeting.


“The organization that creates the most genetic gain will capture most of the business. So each of us is jockeying to create more genetic gain than the next guy.”

An estimated $75 million is invested in canola varietal development annually – probably more than on any other crop in North America except corn, Harwood said.

Researchers have barely tapped into canola’s yield potential, according to Van Ripley, Dow AgroSciences’ global breeding leader for canola.

“My personal feeling as a canola breeder is no, we’re nowhere near maxing out canola’s potential,” he said.

“I think we’re at the very beginning with canola. It will be phenomenal the yields we’ll have in 20 years would be my prediction.” [email protected]



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