High oleic canola acres are expected to rise 50 to 100 percent in 2008, according to the two companies marketing the crop.
More restaurant chains are turning to oils that have no trans fats to replace partially hydrogenated oils used for frying. Dow AgroSciences is supplying more than 50 restaurant chains and Cargill has more than 150 end-use customers.
Recent legislation banning the use of trans fats in some schools and cities has put extra pressure on the two companies to boost the supply of the high oleic canola that produces the sought-after oil.
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Earlier this month, the Ontario provincial government introduced the Healthy Food for Schools Act, which calls for an end to trans fat foods in the province’s school cafeterias.
In November, Manitoba passed a bill requiring every school in the province to adopt a policy to stop selling or distributing foods containing trans fats.
Calgary is requiring all food service providers to use cooking oils and spreads that contain less than two percent trans fat starting January 2008.
“It’s important that this evolution in healthy eating has the support it needs at the farmgate. We need to make sure we’re growing enough acres to support the demand,” said Tyler Groeneveld, marketing specialist with Dow’s Nexera canola seeds and traits division.
Groeneveld estimates there is enough demand for high oleic varieties to comprise 20 percent of next year’s canola crop, up from about 10 percent in 2007.
Dow hopes to sign up an extra 1,000 growers to plant its Nexera canola with the Clearfield production system.
“It’s huge growth for a program,” he said.
“It’s a very significant market move.”
Gary Galbraith, Canadian production manager for Cargill specialty canola oils, said the company wants a 50 percent increase in acreage and in production of its two high oleic lines: the Victory hybrids with the Roundup Ready trait and InVigor Health hybrids containing Liberty Link technology.
“We expect to get the acreage that’s required,” he said.
To encourage producers to seed the crop, Dow is offering contracts ranging from $11 to $12 per bushel, depending on the region where the crop will be grown. That’s a $1 to $1.50 per bu. premium over commodity canola.
If growers contract their production before Dec. 31, they can get up to $13 per acre in additional bonuses.
“We’re seeing some extremely profitable opportunities here,” said Groeneveld.
“It’s about as low risk as farming gets.”
Galbraith said Cargill’s 2008 specialty canola oils program gives growers a risk-free price hedge on the first 10 bu. an acre of production and an attractive prime basis that varies by rural municipality and delivery period.
“Almost anywhere in Saskatchewan growers can get over $11 (per bu.),” he said.
“It’s one of the best offers that we’ve put out since we started in this business. Some of the delivery periods are filling up.”
Groeneveld said canola growers have a number of new markets for their product, including the much-hyped biodiesel industry. But the high oleic market shouldn’t be overlooked because it represents a stable, long-term marketing opportunity for canola growers.
“This segment is not going to disappear as energy policy swings one way or the other.”
He also wanted to ease growers’ minds on another issue, noting that the four Nexera varieties available today are earlier maturing than their predecessors, which were susceptible to frost in some regions of the Prairies.
“I think the agronomic challenges of the past have been overcome,” said Groeneveld.
