2011 canola prices draw growing attentionIt’s far too early to tell how much canola area farmers will plant next spring, but the crop is generating plenty of buzz this fall.
By: Jonathan Knutson, Agweek
It’s far too early to tell how much canola area farmers will plant next spring, but the crop is generating plenty of buzz this fall.
Canola contracts for the 2011 crop are being offered for $20 to $21 per hundredweight. That’s high enough to attract lots of interest — and even to persuade some producers to grow it.
“We’re seeing some contracts locked in at these prices,” says Barry Coleman, executive director of the Northern Canola Growers Association in Bismarck, N.D.
Top canola producers
North Dakota is the leading U.S. producer of the crop. The state planted 1.26 million acres of the crop, up from 730,000 acres in 2009 and slightly short of the record 1.3 million acres in 2001 and 2002.
Canada is the world’s leading producer and exporter of canola, a contraction of “Canadian oil, low acid” — or canola.
Production problems in Canada’s prairie provinces, where some areas were pounded with heavy rains this year, reduced canola supplies and pushed up its current price to roughly $21 per hundredweight.
Surging prices for competing crops are a factor, too, because the canola industry wants to be sure enough acres of the crop are planted in 2011, says James Loewen, grain manager for Bunge Canada in Altona, Manitoba.
Also in play is the fact that some area farmers will need to plant less canola next spring for rotational purposes, Loewen says.
Those farmers would face a higher risk of crop damage if they plant canola on the same fields next year.
The need to shift away from canola for rotational purposes will be a factor only in limited parts of North Dakota, Coleman says.
There has been speculation that canola seed may be in short supply next year, but Loewen says he’s thinks that’s unlikely.
Despite the Canadian production problems, the overall canola crop should have been big enough to produce the necessary seed, he says.
One sign of canola’s presence, current and future, on the Northern Plains:
Bunge announced last month that its plans to more than double the capacity of its canola processing plant in Altona.
The expansion, from 1,100 metric tons of seed per day to 2,500 metric tons per day, is expected to be completed in time for the 2012 crop.
Canola remains attractive to food manufacturers and buyers, which bodes well for the crop’s future, Coleman says.