If you’re willing to pay for it, we’re willing to grow a lot more of it.
That’s the message Canadian and American canola growers are sending to food processors and biodiesel producers. Canola demand is expected to grow for two reasons: the U.S. Food and Drug Administration has allowed canola sellers to make a qualified health claim and biodiesel manufacturers are turning to canola as a feedstock.
“I think there’s plenty of land available for it. We won’t be pushing the rotation too hard for expansion in North Dakota and a number of other states,” said Barry Coleman, the executive director of the Northern Canola Growers Association.
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Some industry observers have worried that North American and world canola production areas are too small to supply canola oil for high value human food use and for the lower quality needs of the biodiesel industry.
Canola oil already demands a modest premium to soybean oil because of its relative health benefits, and the new approval to make health claims in the United States is expected to increase consumer demand and boost relative prices.
Canadian canola industry officials have mused that export markets such as China and Pakistan that normally seek lower priced canola may be cut out of the market.
Globally, canola is grown on a much smaller land base than soybeans and it needs cooler zones, but Coleman insisted that U.S. canola producers could expand their acreage if sent the right signals.
“It’s all going to come down to what the processor’s willing to pay,” said Coleman.
“They’re going to need to buy up acreage in competition with corn, wheat and other crops.”
Angela Dansby of the U.S. Canola Association said it shouldn’t be hard to boost canola production.
“There’s great room for expansion in the United States,” she said when the qualified health claim was announced.
“North Dakota is one of those areas that’s being eyed for expansion but another is the Great Plains where winter canola is starting to be planted and has potential for conceivably a million acres or so.”
U.S. canola seeded area this year was 1.02 million acres, down from 1.16 million in 2005. Most of it was grown in North Dakota. Canada’s seeded area was 13.15 million acres, down from 13.56 million in 2005.
Canola Council of Canada president Barb Isman said acres and production will increase on the Canadian side of the line if farmers see the money.
“The returns from producing canola have to be higher than for other production choices,” she said.
“What we’re hoping to do is to significantly increase the amount of canola that’s produced.”
Increased hybrid seed use should alleviate production slumps in bad years and cause bigger production in good years. Drought, heat and frost tolerance being developed by plant breeders should also increase Canadian production, Isman said.
Coleman said recent strength in canola prices compared to soybeans has North Dakota farmers considering growing more of the crop next year.
“It’s creating interest in people,” he said.
If farmers can get canola varieties that allow for straight combining, more farmers will be interested in growing it, he said.
“A lot of it is up to the seed companies to come up with better products,” said Coleman.
