A move by U.S. regulators to ban trans fats has hearts fluttering in Canada’s canola industry.
The U.S. Food and Drug Administration has determined that partially hydrogenated oil, which is the primary source of artificial trans fats in processed food, is not generally recognized as safe for use in human food.
The agency has given food manufacturers three years to remove partially hydrogenated oil from their products.
“This action is expected to reduce coronary heart disease and prevent thousands of fatal heart attacks every year,” FDA acting commissioner Stephen Ostroff said in a news release.
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A 2005 announcement by the FDA requiring food manufacturers to label the amount of trans fats on their products created an immense new market for high oleic canola oil.
High oleic canola oil can be used as a substitute for partially hydrogenated soybean oil because it provides the stability needed for frying with the added bonus of no trans fats and low levels of saturated fats.
The U.S. food industry used 8.2 billion kilograms of soybean oil and 500 million kg of canola oil before the 2005 labelling announcement. It now uses 6.1 billion kg of soybean oil and two billion kg of canola oil.
Dave Dzisiak, commercial leader of grains and oils with Dow AgroSciences, expects canola to gain more market share now that the FDA has gone one step further and declared an outright ban.
“Probably in this round, things like palm oil may be a bigger winner but there’s good opportunities in there for high oleic canola, especially given the fact that high oleic soybean is still delayed,” he said.
Palm is expected to be the big winner because the remaining 680 to 900 million kg of partially hydrogenated soybean oil still being used by food manufacturers is in products such as doughnut glaze, which require an oil capable of setting up.
Palm oil is a solid fat at room temperature, so it is well suited to that purpose.
However, there will be a good opportunity for high oleic canola oil to be blended with palm oil to create a product that sets up, is trans-fat free and far lower in saturated fat than a pure palm oil-based product.
Dale Leftwich, a director with the Canadian Canola Growers Association, applauded the FDA announcement.
“It adds to an already good story,” he said.
Leftwich has experience growing Dow’s Nexera canola on his farm near Esterhazy, Sask.
The first varieties were late maturing and had a yield drag, but there have been dramatic improvements with the crop.
“Now they actually have some agronomic qualities, which are in some ways better,” he said.
It is a smaller canola plant that is easier to swath and combine than conventional canola.
Growers typically receive more than a $1 per bushel premium for growing high oleic canola varieties, which catches a farmer’s eye in today’s environment of falling canola prices, said Leftwich.
However, the decision to grow the crop isn’t a slam-dunk because it is an identity preserved crop, which has its challenges.
“It’s a good program, but you have to know what you’re doing,” said Leftwich.
“The price per bushel is an advantage but you also have to make sure that you have adequate storage and that you have a delivery program that works for you.”
Growers had to previously store the crop for longer than anticipated, but there are now better programs and more delivery options.
Dzisiak estimates 10 to 15 percent of Canada’s canola acres are seeded to the high oleic varieties sold by Dow and Cargill.
He wants to see expanded acres, continued improvements in yield and additional crush capacity because that will drive down costs. Cost efficiency will be critical because significant competition is looming in the United States.
The American Soybean Association praised the FDA for giving food manufacturers a three-year window to reformulate their products. The group had been pushing for a long lead-in time.
“We’ve emphasized to FDA all along that we need the time to get the high oleic trait integrated into soybean varieties and approved in overseas markets so we can produce what the industry demands,” association president Wade Cowan said in a news release.
Pioneer Hybrid and Monsanto have both developed high oleic soybeans, but both companies are still facing regulatory hurdles in the key export markets of China and the European Union.
Dzisiak said many manufacturers will be making the transition to healthier oils earlier than the three-year timeline.
“In the next one to two crops, it will really manifest itself,” he said.
The Canola Council of Canada has established a target for 33 percent of canola acres to be high oleic by 2025.
Dzisiak believes that is feasible given that the U.S. population is expected to expand by 50 million people by 2030.
“That’s adding a whole Canada or more,” he said.
Demand is also up in Japan and other Asian countries, where they are not concerned about trans fats but worried about saturated fats. Palm oil contains 45 percent saturated fats versus seven percent for canola oil.
Another potential growth market is Canada, which has mandatory labeling but has not banned trans fats.
The issue surfaced in a June 18 debate in the House of Commons when NDP MP Christine Moore wondered why Canada hasn’t taken the same bold step as the U.S.
Cathy McLeod, parliamentary secretary to the minister of health, said Canada was the first country to adopt mandatory labelling, an approach that has decreased trans fat intake 60 percent in the last two decades.
Dzisiak said that isn’t good enough. Trans fat consumption in the U.S. has decreased 78 percent between 2003 and 2012, according to the FDA, and is about to decline further with the upcoming ban.
Farmers need to continue expanding markets for specialty canola if they are to meet the canola council’s goal of 26 million tonnes of production by 2025, he added.
“We need to be outside of just true commodity markets,” he said. “This gives us a way to carve out new markets that we couldn’t get into before with just regular canola, so it’s a good net growth opportunity for the industry.”
