KENNEDY, Minn. — A run-up in canola prices is better than the high water marks in 2012-2013 and even 2008-2009, which could bring more acreage into the crop.

Much of northwest Minnesota’s canola crop is processed at the CHS canola processing plant at Kennedy, Minn., four miles south of the town of Hallock, on the west side of U.S. Highway 75. 
Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek
Much of northwest Minnesota’s canola crop is processed at the CHS canola processing plant at Kennedy, Minn., four miles south of the town of Hallock, on the west side of U.S. Highway 75. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek

New crop prices are 20% to 30% better than a year ago, which will determine planting plans.

Old crop prices are up as much 50%, from lows.

“It’s looking, right now, like it should be very profitable crop, if we can raise a decent crop,” said Robert “Rob” Rynning (pronounced “Running”), who lives west of Kennedy, Minn., and farms with his family west of Hallock, Minn.

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Robert “Rob” Rynning (pronounced “running”) lives near Kennedy, Minn., and farms with his family west of Hallock. He is vice president of the Minnesota Canola Association and is immediate past president of the U.S. Canola  Association. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek
Robert “Rob” Rynning (pronounced “running”) lives near Kennedy, Minn., and farms with his family west of Hallock. He is vice president of the Minnesota Canola Association and is immediate past president of the U.S. Canola Association. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek

Rynning is currently the most recent past president for the U.S. Canola Association, and is vice chairman for the Minnesota Canola Council. He farms with a brother, Tim, and a nephew, Zack. His youngest son, Josh, is attending North Dakota State University and expects to join the operation.

Just now, farmers are seeing new crop prices $18 to $20 per hundredweight, or better. Old crop in the bin from last year is in the upper $20 range, although its unclear whether much of that is left to be sold.

The canola processing plant at Kennedy, Minn., just south of Hallock, Minn., was completed in 2012 for $165 million, by Northstar Hallock LLC, a partnership between PICO Holdings and Northstar Founders LLC  CHS Inc., purchased it in 2015 for $127 million. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek
The canola processing plant at Kennedy, Minn., just south of Hallock, Minn., was completed in 2012 for $165 million, by Northstar Hallock LLC, a partnership between PICO Holdings and Northstar Founders LLC CHS Inc., purchased it in 2015 for $127 million. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek

“That’s traditionally a very strong price,” Rynning said. There have been many times farmers have seen $14 to $16 per hundredweight at harvest. “It’s a substantial change, and hopefully we can produce enough.”

Last year, the canola crop didn’t perform well because of excess moisture. Many of the soybeans in the region were able to recover. It seems as though canola demand could last more than one year, Rynning said.

The CHS Inc. canola plant at Kennedy, Minn., just south of Hallock, is served by BNSF Railroad and U.S. Highway 75. It employs about 50 people. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek
The CHS Inc. canola plant at Kennedy, Minn., just south of Hallock, is served by BNSF Railroad and U.S. Highway 75. It employs about 50 people. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek

“The last time this happened it was four or five years we were able to put together. “There’s so many unknowns: COVID has proven the unpredictability of things. It has possibly weakened canola demand because of its use in restaurants. Overall demand has been strong."

Rynning said it’s his “gut feeling” that there will be more acres. Higher prices seem to be prompted by greater demand for canola for vegetable oil production, as well sales into Europe for biodiesel and sales to China.

“It’s a demand-driven market right now,” Rynning said.

Canola’s rise

The Rynnings started raising canola in the mid-1990s because a wetter climate led to “scab,” or fusarium head blight, in cereal grains. “We decided we needed something in the rotation to help out scab,” he said.

Canola production took off in northwest Minnesota and northern North Dakota after 1993, when wetter weather caused fusarium head blight (‘scab”) disease in cereal grains, and more farmers turned to oilseeds. CHS Inc., owns a plant four miles south of Hallock, Minn., with a mailing address of Kennedy, Minn. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek
Canola production took off in northwest Minnesota and northern North Dakota after 1993, when wetter weather caused fusarium head blight (‘scab”) disease in cereal grains, and more farmers turned to oilseeds. CHS Inc., owns a plant four miles south of Hallock, Minn., with a mailing address of Kennedy, Minn. Photo taken March 2, 2021, at Kennedy, Minn. Mikkel Pates / Agweek

Rynning had been involved in Minnesota and national barley growers organizations but about a decade ago switched his efforts to canola. He served on the Minnesota and U.S. canola association boards all through those years.

The Rynning families raise half cereal grains and half oilseeds. The oilseeds are split between canola and soybeans — typically with more soybeans than canola.

“We generally raise 600 to 900 acres,” he said. “Sometimes we plant winter wheat into the canola stubble in the next fall.”

The Rynnings’ canola acres will stay the same as last year. Their soybean acres might rise a bit from last year, for other reasons. “If we price it now, then we will grow a few more acres because we’ll price a little extra,” he said.

A timing issue affecting the Rynning soybeans plans is the crossing of some of the farm by the Enbridge Line 3 pipeline. That has disturbed soil on some acres, so it might be better to delay planting and use soybeans instead of earlier-seeded spring wheat or canola.

“When you see prices you haven’t seen in that long, we want to do some scale-up selling,” he said. “We have marketed some. We intend to do some fairly soon again, capture some of that price that we know we can make some money on.”

The canola market still is affected by Canada’s Dec. 1, 2018, arrest of Meng Wanzhou the chief financial officer of the Chinese telecoms giant Huawei, and the daughter of the company’s founder. The U.S. has been trying to have her extradited to the U.S., alleging she misled the bank HSBC in a way that might make it break U.S. sanctions on Iran.

After the arrest, Chinese officials restricted Canadian canola imports, blaming a “dockage” issue, Rynning said. Canada and China have agreed on a trade understanding with the Chinese agreeing to less than 1% dockage. “That’s doable but it’s very difficult,” Rynning said.

Exports to China from Canada remain curtailed. That affects Canadian prices, which in turn affects U.S. seed prices. “It seems like they’re making progress, and hopefully because of Chinese demand, they’re willing to increase imports.”

The U.S. production doesn’t supply its own domestic demand, so exports aren’t quite as big an issue here. A very small amount of U.S. production goes to Mexico.

“We’re so reliant on the Canadian market for price setting,” Rynning said. “It’s pretty much all soybean oil and the Canadian market that sets our price. There’s a little bit of regional basis pricing.”

Fortunately for the Rynnings, Kennedy is home to a canola processing plant. The plant was built in 2012 and has been operated by CHS since 2015, supporting a good strong local basis. The plant had a capacity of 1,400 tons per day. Rynning said producers father west — perhaps in the Langdon, N.D., area and west — will go to a processing plant at Altona, Manitoba.