JERSEY CITY, N.J. – Crusher profit margins are wide and have lasted for months, canola biodiesel production plants are being quickly developed and promotional work on canola’s healthy benefits is beginning to pay off.
But Canola Council of Canada president Barb Isman said those successes can’t be enjoyed unless canola growers are also benefiting.
“Does (all that other success in the canola industry) matter if the majority of farmers can’t make a profit from growing canola?” Isman said while summing up 2005 in a speech at the council’s recent convention in the New York City area.
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“I’m not going to stand up here and congratulate us for a stellar 2005. It would simply be deceiving ourselves.”
Many farmers are losing money on canola production and almost all the biodiesel developments are occurring in the United States, something Isman said “as a Canadian, not just a person representing canola, I find that offensive.”
But while there is no short-term answer to the problem of producer profitability with canola, Isman said increased demand should catch up to canola production within two years. Then the situation should be better for farmers.
“In 18 to 24 months we should see much more demand for biodiesel,” said Isman, predicting increased U.S. demand of one million tonnes per year just for biodiesel production.
A plant is being built now in North Dakota and plants are also planned for Washington state and Minnesota. European biodiesel production is already boosting demand for Canadian canola, which will likely increase.
Apart from biodiesel, canola demand should also increase if producers and marketers can move a step up the ladder, away from being basic commodity producers and toward product producers.
“We’re trying to move ourselves away from being a commodity, plain and simple,” Isman said.
The council has begun promoting market awareness about canola’s benefits and has been developing more specialized products from the oil, but that work has only just begun.
“What our year has been about is figuring out who (and how) to begin to differentiate this product seriously,” Isman said.
“We are really good agriculturalists. We do agriculture better than anybody in the world. Last year, though, we tried to be promotionalists.”
Isman said new canola markets should start opening the door to greater use of the crop in North American food production and the council hopes biodiesel production can also develop in Canada.
In July the canola council is holding a conference on biodiesel in Canada, which it hopes will get development moving. In the meantime, the federal government needs to begin believing in the potential for biodiesel, which the American government has already seen.
“We can be an economic engine, not only for canola … but also for Western Canada in total,” Isman said.
