Winnipeg - In the heart of Canada’s bread basket, a Richardson
International, processing plant stands as a testament to what may be the
country’s most successful agricultural experiment.
Farmers across the Prairie
Provinces are planting a record acres of canola, a
crop that didn’t exist about four decades ago but now is the nation’s biggest,
sown on more land than spring wheat.
Richardson
was the first company to market canola oil. It has since expanded capacity at
factories like the one in Lethbridge, Alberta, as global demand exploded and Canada became the top exporter of
an oil seed used in everything from salad dressing to french fries.
Richardson’s
facility now spans six square blocks a warren of crushing machines, conveyor
belts, railroad links and grain silos devoted entirely to canola.
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After a C$120
million [$89 million] upgrade to expand capacity by 55 percent, it will be
able to process 700 000 metric tons annually, boosting exports of oil and
related products including margarine and buttery popcorn topping.
“It’s almost a constant turnover” of jugs, barrels and
bottles of oil shipped to grocers, fast-food restaurants, hospitals and bakers
every day of the work week, said Steve Scott, the plant’s maintenance manager.
Pointing to a tanker car capable of hauling 80 tons, he
said, “a big potato-chip plant will be taking a couple of these a week.” Canadian
scientists invented canola in 1974 by breeding out undesirable traits from the
rapeseed plant, though it didn’t get the name “canola” until 1978.
The seed has more than twice as much oil as a soybean, and
canola oil has become popular in cooking and deep frying. It’s rich in heart-healthy
fatty acids found in salmon and tuna that lower bad cholesterol and help
control blood sugar, with no artery-clogging trans fats.
Canola oil has about 7
percent saturated fat, about half as much as olive oil and a fraction of what’s
in palm oil, according to the Canola Council of Canada.
“The healthy oil profile that canola enjoys is going to keep
it popular,” said David Reimann, a market analyst in Winnipeg, Manitoba, for
Cargill, the world’s largest agricultural company. “It’s a huge, huge
market and can certainly tolerate a lot more acreage and production.”
Planting More
Farmers are doing just that. While planting is a little
behind schedule because of wet weather, Canadian growers eventually will sow 22
million acres of canola this year, the most ever, government data show.
The planting season will end in a few weeks. Production of
canola probably will reach a record 18.75 million tons, more than half of which
will be exported to big buyers like the US, China and Mexico, the government’s
Agriculture and Agri-Food Canada said in a May 24 report.
Demand also is
growing, with global imports of rapeseed set to jump 5.2 percent to a record
16.18 million tons, the US Department of Agriculture estimates, with Canada
accounting for about 68 percent of total shipments.
Canola futures closed Tuesday in Winnipeg at C$502.80 a ton, down 0.2 percent
in 2017, after two straight years of gains. Prices have held up better than
competing oilseeds as supplies increased. Canola now fetches a premium to
soybeans, and it has outperformed palm oil, which is down almost 20 percent in
the past year.
Still, farmers have plenty of incentive to supply more as
domestic demand grows, with Canadian processors poised to crush a record 9
million tons in the 12-month season through July, and a similar amount in the next
year, according to the nation’s agriculture ministry.
Global Market
The global market for rapeseed, which includes canola,
reached $6.6 billion last year, a 61 percent increase from 2011, and is
forecast to grow another 51 percent from 2016 to 2021, the most of any edible
oil, including olive oil and sunflower oil, according to data from Euromonitor
International. Since canola oil is not just for human consumption, part of that
growth may go toward other uses such as animal feed, said Hope Lee, a senior
analyst.
Rising demand for healthier cooking oils from North American
consumers and a growing middle class in Asia
has helped boost exports, said Bruce Jowett, vice president of market
development for the Canola Council of Canada.
That, in turn, has prompted farmers to continue to seed more
acres and for processors to invest “significantly” in increasing the amount of
oil and meal they can export, he said.
In 2015, the Food and Drug Administration determined that
partially hydrogenated oils, the main source of trans fats that contribute to
heart disease, are not generally recognized as safe. Many companies including
McDonald’s. and Unilver have committed to phasing out trans fats from their
food products.
Processing capacity has more than doubled in the past
decade. The industry, including Richardson International, Bunge. and
Archer-Daniels-Midland, has spent about C$1 billion to upgrade and expand.
Canada may produce as much as 26 million tons of canola by
2025, a 41 percent increase from 2016, Jowett said. “Canola is the healthiest
oil that’s out there,” Jowett said. “As consumers become more educated about
their health, they can see that consuming less saturated fat is a good thing.”
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