The amount of canola crushed per week in Canada appeared to increase suddenly in late January.
On Jan. 27 and then again Feb. 3, the Canadian Oilseed Processors Association (COPA) reported weekly crush volumes of 87,000 tonnes, about 10,000 tonnes more than the weekly crush last fall and higher than the weekly crush in January 2009.
The increase surprised industry watchers because several crushers are under import alert status in the United States over concerns about salmonella contamination in canola meal.
However, Glenn Lennox, Agriculture Canada oilseed market analyst, said there is a simple explanation.
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“I think the sudden blip out there in capacity, a week or so ago, was just the Ste. Agathe plant starting to report,” Lennox said.
Viterra bought the 1,000 tonnes per day crushing plant in Manitoba from Associated Proteins in June 2009.
“The plant wasn’t reporting to COPA under the previous owners,” Lennox said. “I guess Viterra got around to joining COPA.”
Barbara Bergh, COPA manager of statistics, confirmed that numbers from one crush plant had been added to COPA’s weekly crush, but she didn’t say which one.
With Viterra now reporting, COPA members’ crush capacity has risen to 111,000 tonnes from 104,000 tonnes.
Capacity is expected to further increase when LDM Foods in Yorkton, Sask., owned by Louis Dreyfus and Mitsui & Co., begins crushing larger volumes of canola, Lennox said.
“The Dreyfus plant in Yorkton really isn’t up and running yet … and COPA isn’t including their numbers,” he said.
The plant is expected to have a capacity of 750,000 tonnes per year.
“They were buying canola last fall and apparently they’ve had some problems with the startup.”
LDM Foods officials didn’t reply to requests for comment by press deadlines Feb. 12.
Lennox said he expects that the import alert status on canola meal exported to the U.S. will continue to trouble the industry. The U.S. Food and Drug Administration is monitoring canola meal shipments for salmonella from Viterra’s Ste. Agathe plant, Bunge facilities in Nipawin, Sask., Altona, Man., and Hamilton, Ont., and ADM’s crusher in Windsor, Ont.
As a result, canola meal shipments to the U.S. have dropped drastically.
Canadian crushers exported 63,000 tonnes of canola to the U.S. in December, based on Statistics Canada data, down from 141,000 tonnes in December 2008.
Crushers made up some of the loss by selling more meal to other regions, Lennox said, primarily Asia.
Sales of canola meal to China were 945 tonnes in 2008-09 but 33,000 tonnes between August and December 2009. Shipments to Thailand increased from 1,044 tonnes in 2008-09 to 40,000 tonnes from August to December.
However, it costs more to ship meal across the Pacific, which means it is likely being sold at lower prices.
“The fact that the meal has to be sold at a discount … is going to affect the canola price,” Lennox said. “So if the meal becomes worth less to the crusher, it will go back to the farmer.”
