Droughts aren’t withering optimism for future of canola in Saskatchewan

Troy Fleece/Regina Leader-Post. Combines, grain carts and semi tractor trailers harvest a canola field near Kronau, Sask. The crop has seen burgeoning interest in recent years, as companies have announced plans to increase crushing capacity to supply markets for cooking oil and biodiesel.

Bryn Levy, Regina Leader-Post

Ever since its development in the 1950s and ‘60s by plant breeders in Saskatchewan and Manitoba, canola’s bright yellow flowers have become a common sight across the Canadian Prairies.

Saskatchewan, the world’s leading producer of the crop, has seen a wave of announcements in recent years from major food companies expanding canola crushing operations amid surging global demand for canola oil.

 As Saskatchewan producers face another year of drought, some have devoted fewer acres to canola, opting instead for crops like cereals that may have lower input costs or better tolerate hot, dry conditions.

Ian Epp, an agronomy specialist with the Canola Council of Canada, said canola is a fairly resilient crop in a variety of conditions, noting it can even perform decently in low rainfall if producers take measures to maximize the moisture they do get.

Epp said canola gets “hammered” when low moisture is accompanied by persistently high temperatures, especially when plants are flowering.

Although some producers might adjust their seeding intentions, Epp suggested most will continue planting a significant amount of canola, as they stick to crop rotations they use to preserve soil health.

In the longer term, Epp said he expects there will come a day when producers can opt to plant canola varieties specifically tailored for lower-moisture, hotter conditions as plant breeding programs continue to refine traits.

Although recent droughts have affected yields — and raised the prices crushers must pay for the seed they feed into their operations — Gabe Afolayan, commercial lead for Cargill North America Softseeds, said in an email that the company continues work on a new $350 million crushing facility at Regina’s Global Transportation Hub.

In addition to its longstanding use as a cooking oil and food ingredient, canola also has applications in making renewable biodiesel, a fuel expected to play a part in reducing greenhouse gas emissions.

This all adds up to strong global demand for canola and Canada “consistently” produces an exportable surplus, even in drought years, Afolayan noted.

Afolayan said Cargill is also encouraged by continued innovation in developing canola seed varieties and growing practices in the face of a changing climate.

“We believe solutions will come from multiple paths over time and ensure a reliable long-term outlook for production,” he wrote.

Cargill is not alone in expanding its footprint in Saskatchewan. Richardson International, Louis Dreyfus Corp. and Viterra have also in recent years announced major investments in new or expanded facilities.

Afolayan called competition “a healthy constant” of the canola crushing industry, but said other factors will be more important in coming years.

“Market price signals and the regulatory environment will be the most potent driver of the future capacities of seed supply and crush demand,” he wrote.

Jake Leguee farms durum, wheat, canola, peas, lentils, and flax at his operation near Fillmore, Sask.

Looking to years ahead, Leguee said he’s excited to see all the planned investments in crushing capacity, particularly in the Regina area, which would reduce his transportation costs on sales.

That said, he added it remains to be seen if all the companies that have made announcements can complete their plans in an environment of inflation and higher seed prices.

“Everyone has to have a sharper pencil these days when it comes to major capital projects,” he said.

Leguee said he also has some concern that government policy on biodiesel could rapidly “change lanes,” potentially jeopardizing investments meant to feed that market. He called for all political parties to commit to continued support for the industry.

While he said lentils can be slightly more profitable for him when things go well, he called canola his most “consistent” crop. He said steady demand also makes canola convenient and quick to sell.

“It doesn’t tolerate heat and drought as well as some of our other crops, but in the years where we’re wetter, it does the best,” he said, adding canola has become a “critical” part of his farm’s rotation that would be difficult to replace.

“There just aren’t a lot of other options available that are really any better.”