26 million tonnes by 2025 | Production goals might be easy compared to market and transportation issues
The Canola Council of Canada says the industry faces a “formidable” challenge meeting its new production target, but others consider the goal attainable.
The council’s new objective is to produce 26 million tonnes of canola by 2025, up from 18 million tonnes in 2013.
“That’s a bold target, no doubt about it,” said council chair Terry Youzwa.
“But we believe it can be done and it can be done responsibly and sus-tainably.”
The new target is expected to be met primarily by boosting yields. The “Keep It Coming” strategy calls for an average yield of 52 bushels per acre, up from 40 in 2013.
“As a canola grower myself I’m convinced we can achieve 52 bushels per acre and that’s the key, it’s a yield target,” said Youzwa.
Maurice Delage, a farmer from Indian Head, Sask., and one of the people responsible for developing Liberty Link canola, said few believed the canola industry could meet its 2015 objective of 15 million tonnes of production when it was announced in 2007.
That target was met two years ahead of schedule with 2013’s bumper crop.
Delage isn’t as skeptical about meeting the 2025 target of 52 bu. per acre.
“It’s certainly achievable and I wouldn’t be surprised if we exceed that,” he said.
He predicts top growers will consistently produce 70 to 80 bu. an acre crops in 10 to 20 years.
“That’s where the genetics will be,” he said.
Those yields will be on the most productive land but a countrywide average of 52 bu. per acre is feasible, he said.
Saskatchewan oilseed specialist Venkata Vakulabharanam said the target meshes with the province’s 2020 goals for agriculture.
“We are in line with what they are thinking and we see that is possible with the genetics that we have,” he said.
A couple of hours after the targets were announced, the council sent its Canola Watch email publication that appeared to suggest the 52 bu. per acre target may be conservative.
“Genetic gain alone could contribute 10 bu. per acre to the current 40 bu. per acre average achieved in 2013. Agronomy and management practices could contribute another 10 bu. per acre,” said the publication.
Council president Patti Miller said the exact target is not as important as the broader message.
“That’s not the real message. The message is we’re talking about a significant increase,” she said.
The yield increase is expected to be necessary to meet rising global demand for vegetable oil. The council commissioned a report that predicts global demand for vegetable oil will rise to 250 million tonnes by 2025, up from 150 million tonnes in 2015.
“The world is telling Canada’s canola industry to keep it coming,” said Youzwa.
“We know that if we don’t rise to the occasion in a responsible, sustainable manner our competitors will.”
The forecast increase in vegetable oil demand is 66 percent, compared to the council’s prediction for a 44 percent increase in canola production.
While that might suggest supply won’t keep pace with demand, that is not the case. Canadian canola doesn’t compete in many world vegetable oil markets, such as South America, Africa and portions of Russia and the Middle East, said Bruce Jowett, vice-president of market development with the council.
The goal is to increase canola’s market share by one percent per year through 2025 in the four key markets China, Japan, Mexico and the United States, he said.
Those four markets consume 94 percent of Canada’s seed, meal and oil exports. Another goal is to de-crease the reliance on those four markets by growing demand in secondary markets to 20 percent of the overall pie.
Other targets include 12 million tonnes of seed exports, 14 million tonnes of domestic crush and one-third of total acres devoted to high oleic and other specialty oil varieties.
Larry Weber, an analyst with Weber Commodities, said a goal for increasing exports by 3.5 million tonnes must also include a transportation plan for how that crop is going to make it to the West Coast.
“If you can’t get it there, why grow it? All we’re doing is shooting ourself in the foot,” he said.
He also wonders how reasonable it is to expect an additional 6.5 million tonnes of seed will be crushed by 2025.
“We can’t even process what we’ve got now. Crushers this week are running at 78 percent capacity and they’re running 12 percent below where they were last year with a bigger crop,” said Weber.
He was also annoyed by talk about the health benefits of canola at a time when canola oil is trading at significant discount to soybean oil. Weber wonders how growers are benefitting from canola’s healthy attributes.
The council is forecasting 22 million acres of canola by 2025, up 10 percent from last year’s 20 million acres.
Weber questions where those acres will come from given the surging popularity of soybeans in Western Canada. Seed technology companies expect up to 10 million acres of corn and several million acres of soybeans will be grown in Western Canada by 2025.
Miller said markets will dictate what crops get planted.
“We figure we’re going to continue to be a profitable choice for farmers,” she said.
No goals were set for oil content. The 2015 goal was for 45 percent content. That target was achieved in 2013.
“When you start getting much beyond 45 you’re going to start to trade off some challenges with managing the crop,” said Miller.