Markets are heating up for high oleic canolas, say two companies contracting the specialty oilseed in Canada.
“We’ve had significant growth in our oil sales over the past two to three years and the key driver is the requirement to have trans fats labelled,” said Gary Galbraith, Canadian production manger for Cargill Specialty Canola Oils.
On Dec. 12, 2005, it becomes mandatory for food companies to label trans fat contents on prepackaged goods in Canada. The same rules will apply in the United States on Jan. 1, 2006.
Many processors have already started labelling their products in advance of those deadlines.
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“A lot of food companies who are wanting to make a healthier claim on their food products are looking to the high oleic canola oils as a solution,” said Galbraith.
Other options are available such as fractionated tropical oils, high oleic sunflower oils and low linolenic soybean oils, but high oleic canola offers manufacturers better stability and the lowest saturated fat levels of any vegetable oil.
Galbraith estimated high stability oils could eventually account for as much as 10 percent of the total vegetable oil market.
With its health attributes, the potential for high oleic canola oil is staggering, said Brent Zacharias, oil and traits marketing manager for Dow AgroSciences Canada.
“We believe high oleic canola alone has the capacity to displace all the partially hydrogenated oils used in Canada within the next two years.”
That glowing outlook is leading to a surge in seeded acreage of Cargill’s InterMountain canola and Dow’s Nexera varieties.
Canadian canola growers planted more than one million acres of Cargill’s two Roundup Ready hybrids and its open pollinated variety IMC 209 and 650,000 acres of Dow’s Clearfield varieties in 2005.
That is double the high oleic acres seeded in 2004 and about 12 percent of the entire 2005 canola crop.
It was a tremendous year for producers who decided to grow the specialty canola, said Zacharias.
Last year there were some quality problems associated with the Nexera varieties, with growers complaining about abnormally high green seed counts.
Company executives attributed it to a weather anomaly, saying Nexera varieties were sensitive to the record low growing degree-days and early frost that hampered the 2004 season.
So far there are no quality issues to report in 2005. Of the 440 samples of Nexera canola that have been received and graded, the crop has been averaging a No. 1 quality, with an excellent oil profile.
“We had confidence in the varieties and that’s proving out this year,” said Zacharias.
Preliminary yield data shows Nexera is performing well compared to other elite open-pollinated and hybrid canolas, with lots of farmers harvesting more than 50 bushels per acre.
Galbraith said there aren’t many No. 2 crops in the 6,000 oilseed samples Cargill has analyzed. And judging by data gathered from 16 of the 27 performance trials of its Roundup Ready hybrids, which are marketed under the Victory brand name, they are delivering 99 to 101 percent of the yields of the leading Roundup Ready hybrids.
The company plans to switch its specialty canola line entirely to hybrids over the next few years with the introduction of more Roundup Ready hybrids in 2006 and some InVigor hybrids for 2007.
Cargill believes the move to hybrids helps ensure processors have a consistent supply of high oleic canola in the future. That won’t be a problem now as production is temporarily outpacing demand.
Cargill’s one-time premiums starting at $75 per tonne attracted a lot of growers and those farmers harvested huge crops.
“We do have a bit of a surplus in production so that doesn’t allow us to grow our acreage for 2006,” said Galbraith.
Zacharias doesn’t know what to expect for next year’s Nexera acreage but judging by the demand for Dow’s Natreon oil from customers in Canada, Japan and the United States, there should be further contracting opportunities for 2006 as the company aligns supply with customer needs.
One thing that could spur demand is a report due this fall by a committee co-chaired by Health Canada and the Heart and Stroke Foundation of Canada. The Task Force on Trans Fats has a mandate to develop recommendations to effectively eliminate processed trans fats in Canadian foods.
“Anything that they come out with that meets the mandate of looking at ways to reduce trans in Canada certainly opens more opportunities for high oleic canola,” said Zacharias.
