The owners have changed a few times and so have the oilseeds it crushes, but the processing plant farmers built here in 1946 still epitomizes the concept of “value added.”
In fact, this plant has been “value adding” since long before the words became part of the Prairie lexicon. Canola, the oilseed it processes almost exclusively today wasn’t even a glimmer in researchers’ eyes when this plant started operating more than 60 years ago.
Back then, it was the farmer-owned Co-op Vegetable Oils Ltd. (CVO) – the first oilseedcrushing plant built in Canada and the first in North America to process sunflowers, according to records archived at the University of Manitoba.
J. J. Siemens, an Altona farmer and community and co-operative leader, is credited with spearheading efforts to build the plant, which was fully farmer owned until 1992. He was the founding president and continued as president until 1952. Siemens remained on the board until 1958, according to documents held by the Mennonite Heritage Centre in Winnipeg.
During the Second World War vegetable oil was in short supply in Canada and Siemens saw the opportunity to fill the gap with locally grown and crushed sunflowers.
Documents show plant construction was to cost $60,000, half of which would be raised from private funds, with the remainder coming from guaranteed loans from the provincial government.
“The community eagerly threw its support behind the plant because it offered long-term economic growth and stability,” the university document states. Co-op Vegetable Oils Ltd. (CVO) had a daily capacity of around 40 tonnes and processed just 1,500 tonnes of sunflowers that year.
The oil has continued to flow even as the co-operative grain companies that built the plant self-destructed and multinationals took over the grain-handling and -processing facilities on the Prairies.
CVO merged with Manitoba Pool and Saskatchewan Wheat Pool (SWP) April 1, 1975, to create CSP Foods Ltd. In 1992, CSP Foods merged with Centra Soya in the United States to form CanAmera Foods. A decade later, the cash-strapped SWP
“The goal is to retain growers. We expect to be in this business for many years to come.”
– JAMES LOEWEN, BUNGE’S GRAIN MANAGER
and Agricore United, (the merger between Manitoba Pool Elevators and Alberta Wheat Pool), sold their shares to Centra Soya.
In 2002, Bunge, one of the world’s largest oilseed crushers, purchased Centra Soya’s parent company and took ownership of CanAmera’s plants, including the plant at Altona.
The plant’s capacity is 1,100 tonnes a day, with about 73 full-time employees.
Over the years, it has processed a variety of crops, including soybeans imported from the U. S., rapeseed and later, canola.
Nowadays, it is predominantly a canola-crushing plant. However, 40 per cent of it is DowAgro Sciences’ Nexera, which produces a “high-stability” oil designed to replace unhealthy, trans fat containing hydrogenated oils used in restaurant deep fryers and in commercial food processing.
James Loewen, Bunge’s grain manager here, estimates the North American market could use 10 million acres of highstability oil. In 2008, there were two million acres of Nexera and Cargill’s Victory canola, which also produces high-stability oil, seeded in Canada.
“There’s lots of room in the market to replace hydrogenated vegetable oil,” Loewen said in a recent interview. “Right now there are very few products that can replace hydrogenated oils other than conventional canola oil. But for fryers that’s just a real pain in the butt because you’ve got to change the oil so often.”
Bunge had no trouble filling its Nexera production contracts earlier this year, Loewen said. Although yields of Nexera varieties are steadily increasing, they still lag those of some of the top-performing conventional canolas. That, and the need to segregate Nexera production from regular canola, is why Bunge offered Nexera growers a $50-a-tonne premium, plus farm pickup.
“We estimate it’s at least a $1.25-a-bushel value over regular canola,” Loewen said.
For the first time this crop year Bunge has a 10-bushel-an-acre “Act of God” clause, which will allow contractees to price up to that amount without fear of getting caught not having the crop should there be a crop failure.
“There seemed to be a lot of hesitation to price the ’08 crop because of the volatility in the market,” Loewen said. “We haven’t had a lot of takers of any new-crop selling on Nexera or canola because everybody is still pretty bullish and hoping the world economy will do some turning around soon.”
Farmers locked in the basis and delivery time when they signed their contracts.
The new “Act of God” clause reflects Bunge’s willingness to do what it can to add value to farmers’ production, Loewen said.
“The goal is to retain growers,” he said. “We expect to be in this business for many years to come. So we try to develop a program around it to get the acres contracted, obviously at the lowest possible premium. Any time your premium costs go up, your price back to your oil buyer goes up and it affects your competitiveness and the potential for growth.”
The trans fat scare is behind the growing demand for highstability oil. Canola oil is one of the healthiest oils available, containing just seven per cent or less saturated fat and no trans fats. But it breaks down while deep frying much faster than partially hydrogenated oils.
Initially everyone thought vegetable oil – even if hydrogenated – was healthier than artery-clogging animal fat. But scientists have learned hydrogenated oils, like animal fat, which is high in saturated fat, boosts LDL levels or bad cholesterol in the blood.
Unlike saturated fat, trans fat can also decrease the HDL levels or good cholesterol, both of which increase the risk of heart disease, the Canola Council of Canada’s website says.
High-stability (a. k. a. higholeic) canola oil is just as low in saturated fat as regular canola oil, doesn’t contain trans fats (nor does regular canola oil), but outlasts regular canola and partially hydrogenated oils in the deep fryer. Nexera can go 17 hours in a deep fryer, versus 12 for partially hydrogenated soybean oil and six or seven hours for regular canola oil, Loewen said.
“That’s under perfect conditions,” he added. “Most restaurants would go double that length of time.”
High-stability canola oil costs more than partially hydrogenated oil, but it lasts 40 per cent longer and it’s a lot healthier. [email protected]