Domestic value-added processing is important

Agriculture in Western Canada is in the midst of a megaproject boom. Sometimes megaprojects are proposed and never come to fruition or they advance on a much reduced scale.

Many recently announced projects appear to have great potential.

Most of us had never heard of True North Renewable Fuels when they announced preliminary plans for a huge renewable diesel facility in Regina. Heck, most of us had to be reminded that renewable diesel is different than biodiesel. Renewable diesel can be used without any mixing with the regular type of diesel.

While everybody has an opinion on the carbon tax, most aren’t familiar with the Clean Fuel Standard that’s also being implemented by the federal government. It requires the life carbon intensity of liquid fuels to be reduced over time and that’s a big driver for renewable diesel.

When a low profile company is promoting a project reported to have a price tag of more than $2 billion, it’s easy to be skeptical. Then, out of the blue, Federated Co-op announced that it has bought the assets of True North Renewable Fuels.

Now the plan has instant credibility. Federated Co-op is a major player in fuel with its refinery in Regina. Adding renewable diesel production to lower the overall carbon intensity of its fuel makes imminent sense and the company has the resources to make it happen.

And then another big announcement out of the blue. Richardson has plans for a major expansion to its canola crushing plant at Yorkton. Richardson says this is all about demand for canola oil and meal in traditional markets and not for renewable diesel, but they are likely to be happy to make sales wherever the economics are most favourable.

Remember when both Richardson and Louis Dreyfus announced plans to build canola crushing plants at Yorkton and many analysts, this one included, thought one or the other would likely blink and choose another location?

Instead, both were built, both have thrived over the past decade and Richardson is now undertaking a major expansion.

Meanwhile, plant protein fractionation for yellow peas has moved from concept to reality. Although the large Roquette facility at Portage la Prairie, Man., gets a lot of the attention, other facilities have come on stream.

Murad Al-Katib, the head of AGT Food and Ingredients, is well known for turning his fledgling Saskatchewan company into a world leader in lentil processing and exports, but some of his endeavors have not received as much attention.

AGT owns a long short-line railway in west-central Saskatchewan that services facilities originally designed to load producer cars. Speaking to the recent annual meeting of the Saskatchewan Institute of Agrologists, Al-Katib explained how identity-preserved durum is being accomplished through bulk loading facilities.

Demand exists for glyphosate-free durum. Durum from a producer who hasn’t used glyphosate pre-harvest goes into a hopper car and then at an AGT facility near Delisle, Sask., the durum is cleaned from one rail car into another to maintain identity preservation traceable back to the farm.

Al-Katib views plant-based foods as a major processing opportunity. In his words, “we need to get away from the commodity ghetto.”

As producers, we try to maximize the value of commodities by selling to the highest bidder without a lot of thought on whether it’s being exported raw or processed domestically into higher value products.

However, domestic value-added processing is a huge advantage for farmers and for the entire economy.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.

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