The Northwood (N.D.) Mills canola crushing plant has temporarily shut down operations because of poor demand in the canola oil market, said plant manager and co-founder Cla-rence Leschied. About 20 employees were laid off. He hopes to return them to work as soon as possible, though it is unclear when that may be.
"Our goal is to, as soon as market conditions improve, get up and operational again," he said.
The plant, which first began operations as a soybean crushing plant in July 2007, switched to canola beans last spring because of reduced demand for soybean oil in the Canadian hog industry and the U.S. biodiesel industry. At the time, overall U.S. biodiesel production was running at 25 percent capacity.
The Northwoodplant had been crushing canola at half capacity for several weeks when reports of continuing low demand precipitated the Jan. 7 halting of operations.
"We have idled operations until the economic conditions change," co-owner Paul Sproule said.
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"Crushing demand has come down," said Darin Newsome, a senior market analyst for DTN. "Soybeans, canola, Malaysian palm oil -- all of these things leading into the biodiesel market."
Oilseed crushing also is closely tied to petroleum demand.
"Heating oil and gasoline are well off due to this overall lack of demand for petroleum products, and it is affecting ... biodiesel and its demand for all these vegetable oils," he said.
When demand might turn around is difficult to predict, but Newsome thinks some of that could come as soon as February with expected increases in petroleum demand as a result of farm activity and anticipated summer travel.
