Canada canola industry aims to boost harvest 40 percent by 2025

Reuters

By Rod Nickel

WINNIPEG, Manitoba, Jan 9 (Reuters) - Canada's canola crop could reach 26 million tonnes by 2025, beating this year's record harvest by more than 40 percent, the Canola Council of Canada said on Thursday in setting targets for the next decade.

The Canola Council's goals are significant because the group represents most of the industry, including seed developers, farmers, exporters and crushers. More canola production would keep Canada, its biggest producer and exporter, competitive in global oilseed exports against soybeans and palm oil.

Canadian farmers last year harvested 18 million tonnes of canola, blowing past the council's previous target of 15 million tonnes two years early.

Rising global demand for vegetable oil and protein will provide a market for the extra production, said Terry Youzwa, chairman of the Canola Council, who farms at Nipawin, Saskatchewan.

"The world is telling the Canadian canola industry to keep it coming," he said in Winnipeg.

The crop has grown in popularity with farmers over the past decade due to its profitability.

Most of the extra canola is expected to come from farmers squeezing more of the yellow-flowering oilseed out of each acre of land, rather than through a large expansion of planted area.

The council is aiming for an average of 52 bushels per acre by 2025, well ahead of last year's 40 bushels per acre, from an area of 22 million acres. That area would be about two million acres larger than it is currently.

There is room to sharply boost canola production as long as it comes mostly from increasing yield, not expanding plantings, said Venkata Vakulabharanam, oilseed specialist for the government of Saskatchewan, the biggest canola-growing province.

The province recommends growing canola only once every four years, but some farmers grow it more often to chase profits, increasing the likelihood of plant disease and reduced yields, he said, in an interview from Regina, Saskatchewan.

Seed development companies like Monsanto Co are working on new varieties of canola that better resist disease, and yields are already rising as farm practices improve, said Neil Arbuckle, the company's canola business development lead.

Domestic canola demand has been growing for years.

Canadian canola crushers, including Cargill Ltd, Richardson International Limited and Louis Dreyfus Corp recently expanded, while Archer Daniels Midland Co , Bunge Ltd, Cargill and Richardson are all adding further capacity in the next few years.

Canadian crushers will aim to nearly double their annual canola volumes to 14 million tonnes by 2025, while seed exporters will strive to boost shipments by 40 percent, according to the council's goals.

Despite canola's popularity, it faces a fight for acres.

Corn and soybeans, once a rare sight in Western Canada, have muscled their way into Manitoba, with Monsanto and DuPont Pioneer developing varieties to thrive in more regions.

Moving a much bigger canola crop to port for export also poses a challenge. With record large harvests in 2013 of both canola and wheat, Canada's railways have struggled to transport the crops quickly, resulting in a backlog.

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