San Fransisco, Calif. – Having the ability to grow 15 million tonnes of canola by 2015 is not going to be the greatest challenge facing the canola industry.
The real challenge will be convincing farmers that it’s worth producing that much, said Canola Council of Canada president JoAnne Buth at the organization’s annual convention.
The raw genetic potential of canola varieties to produce average yields of more than 40 bushels per acre across the Prairies does not seem a far-fetched goal now that farmers have produced two 12 million tonne crops in a row.
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“What it all comes down to is returns to growers,” said Buth in San Francisco March 20.
“We need to make sure that the growers continually get value and that the farm cash receipts stay high enough so that they’re going to put it in every year.
“Although we talk about (how)we’re going to try to reach 15 million tonnes, actually what we’re going to do is create enough demand so that you will grow 15 million tonnes so that the industry can continue to be profitable so that you can continue to invest.”
Keeping demand strong for canola was a thread that strung itself through the council’s two day convention, tying together presentations on biofuel policies, dietary impacts of canola oil, world vegetable oil developments and Canada-U.S. trade.
Strong demand for canola was the factor that explained the odd situation in which canola council chair Richard Wansbutter of Viterra found himself.
At the beginning and end of the convention he listed the regulatory and trade problems the Canadian grain industry has faced in the past year, while also expressing optimism about the present and future.
“Quite frankly, at times I’ve felt a bit overwhelmed and a little worn down at times,” said Wansbutter, wrapping up the convention.
“But … all I have to do is think about canola, and thank heaven I work in an industry like this, and whether from a personal or company or industry perspective, this is truly a sector blessed by vision, by pride, by energy.”
Canola faced several market access problems during the past year. Meal shipments to the best-paying markets in the United States, including the California dairy industry, are partially blocked by a border crackdown on salmonella.
The Chinese market, which consumed huge amounts of canola last year and which saved farmers from facing huge stockpiles, is still closed to Canadian canola due to the Chinese government’s concern about blackleg.
Yet canola sales have boomed and the crop seems a top prospect for farmers this spring, with prices projected to be more profitable than for any other main crop.
During the convention, farmers heard that while biofuel development is frustratingly slow, and new vegetable oil supplies are steaming toward the market, canola is still in a demand sweet spot.
“The next two to three years will be a good time to be an oilseed producer and a very good time to be a canola producer,” said British analyst David Jackson of LMC International.
Beyond that, canola will face great challenges from new palm oil supplies, Jackson said, and the canola industry knows it needs to dig up new biofuel demand to consume all the new canola that should be flowing into the market, Buth said.
