Canola Contracting – Predictable, Manageable and Profitable

Growers who contract canola acres have the advantage over growing commodity canola.

The demand for high stability canola oil continues to increase as the world continues to develop an appetite for healthier food. That’s good news for canola growers looking to increase profits, decrease risk and manage logistics.

“Canola growers have the opportunity to grow what the end use market wants,” says Mark Woloshyn, Nexera Brand Leader. “For example, growers have many risk management, pricing and delivery options available through the NexeraTM canola contracting companies this fall. It’s really up to the grower to take advantage of the profit opportunity offered by Nexera canola hybrids and attractive contracts this fall.”

Jason Remus, a grower from Langenburg, SK, contracted 640 acres of Nexera canola this year.

“The major reasons we choose to contract Nexera is because it’s profitable and there’s demand,” says Remus. “With major customers like Frito-Lay and the new markets that are presenting themselves, it helps our bottom line.”

Along with profitability, contracting makes managing harvest much more predictable. Glen Helgason grows 4,500 acres of canola with his father each year. Between half and TMTrademark of Dow AgroSciences LLC 10/11-17226 two-thirds of those acres are grown under contract.

“As part of the contract with the Nexera varieties, we have delivered the first 25 per cent of our Nexera straight off the combine which certainly does help with the storage logistics,” he says.

According to Helgason, premiums offered by contracting companies are one of the most attractive selling features.

“At the end of the day the premiums paid for the Nexera give us higher net revenue which is what our farm is aiming for,” he says.

Increased crushing capacity especially in Western Canada is helping fuel the demand for more contract-grown canola than ever before.

“I see us expanding the percentage of Nexera on our farm in the future compared to the commodity canola that we are growing today,” Helgason explains. “Nexera is a specialty canola oil which is servicing a new market versus growing commodity canola which serves established markets. That’s a definite advantage.”

Each year Stornaway, SK, farmer Courtney Solonenko grows approximately 6,000 acres of canola with 600 of those acres contracted to Nexera canola. He plans on contracting 3000 acres next year.

“As a rule, we like to have most of our canola delivered before November so we don’t have to worry about the bins but this year we were able to deliver all of our November and January delivery in September. Hauling January canola right after harvest frees up bin space which helps us out a lot,” he says.

Like Jason Remus and Glen Helgason, Solonenko is pleased with the profit potentials offered with contracting.

“We’re very happy with the profit opportunities that Nexera offers. We are getting paid for the product that we are growing which is what we want as growers,” says Solonenko. “And it’s nice to know you’re helping provide better health and better food quality with this kind of canola.”

There’s a bright future for Nexera canola growers. Increased demand, higher yielding-hybrids and Nexera canola contract premiums are making canola contracts an attractive management strategy for profitability and predictability.

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