There’s one solution to the problem of how to increase vegetable oil production quickly to meet new biodiesel demand.
And it has nothing to do with boosting soybean plantings.
Prairie farmers should be pleased to hear that biodiesel analyst Nancy DeVore of Bunge Global Agribusiness thinks that the world’s need for more vegetable oils in the next three years can come from canola and sunflowers.
“It’s much easier for soft seed production to increase to meet that specific demand for oil,” said DeVore in an interview during the Canadian Wheat Board’s Grain World conference.
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Higher vegetable oil prices will help all producers of vegetable oil crops, but the biggest benefit will go to those with the highest oil content: canola and sunflowers.
Canola has about 40 percent of its weight in oil and 60 percent in meal. Soybeans are only about 20 percent oil and 80 percent meal.
If vegetable oil prices increase, then canola and sunflower producers will get the biggest gain.
A big challenge facing crops grown to meet biodiesel demand is getting rid of all the meal from the crushing plants.
Again, canola producers have an advantage because any increase in soybean acreage to meet increased oil demand will produce much more soybean meal. Canola meal production will increase significantly less, creating less downward pressure on meal prices.
“You have to have the meals taken care of,” said DeVore.
Many analysts see palm oil production increasing to take advantage of biodiesel demand in the long run, but DeVore said palm will not affect oil production for a few years until the trees are mature.
So in the three to five year lag between palm plantings and harvest, canola and sunflower producers should be able to increase production and fill a growing demand that other farmers can’t access.
“Soft seeds can fill that role better,” said DeVore.
