There is very limited ability for producers to control canola oil content though management practices, largely because the final oil content is highly dependent on environmental conditions.
Drought can affect a canola crop at any given stage during its growth, but it’s heat that’s the real culprit for a decrease in oil content this year.
Ward Toma, general manager at Alberta Canola, says that genetics plays a role in oil content, but it’s a bit of a dance, physiologically, for the crop to create protein or oil.
“The thing that impacts the amount of oil for a given variety, is temperature while the plant is making the seed,” he says.
Drought isn’t the same as high temperature says Toma, and, during 2002, drought was widespread, but it was accompanied by cooler temperatures.
The heat dome that hovered over much of Western Canada for most of the summer when the crop was forming seed makes this year different. (Story continues below player)
“We’re seeing stuff in the high thirties, which is pretty low, on average,” says Toma. “Farmers don’t sell or get a premium on oil content in canola in Western Canada, but the impact then is that the crusher, that has their plant set to run at 44 per cent, and now they’re getting 38 per cent, that costs them money and that enters into the basis, which enters into pricing.”
At Cargill they seem to pay higher basis depending on RM. Do farmers have access to similar maps?
— Gerrid Gust ?? (@gustgd) October 25, 2021
Toma says that if crushers have to look elsewhere, say to northern parts of Alberta or northern areas of the Prairies, they might still run into problems sourcing canola as lower oil is a fairly widespread problem. Just like farmers might have had issues with their forward delivery contracts, crushers might have the same issue on the oil side for their contracts.
For interest here is a map of historical chart of canola oil content averages. Oil content for 2021 is looking on average to be 2-3% lower compared to recent years. Regional detail on the link shared earlier by @WardToma. pic.twitter.com/G9WZW8a4fm
— Canola Growers (@CanolaGrowers) October 26, 2021
“Everybody in the value chain gets nailed in a year like this, when it starts to cost everybody money, and it makes the whole chain that much more inefficient, and less profits, less ability to invest,” says Toma, adding that end users might go elsewhere for canola oil.
“Know what you’re selling, know what you have,” is Toma’s advice for farmers. Overly dry grain is a tough spot to be in, he recognizes, and that there hasn’t been a lot of creative thinking on how to price canola better.
Green pods in the bin could be problematic this year, as well, creating overheating and spoilage, so keep an eye on those bins.
Talked to the President of Richardson’s last week, he says canola coming into Yorkton crush plant this year is at least 5% less oil on average than last year
— Norman Maze (@maze_norman) October 27, 2021