Canola risks exceeding food vs. fuel target

Mar 29, 2023

The food vs. fuel debate is resurfacing as North America’s oilseed sector braces for surging demand from the burgeoning renewable diesel industry.

The issue was raised during a question-and-answer session at a recent biofuels presentation hosted by the Canadian Canola Growers Association.

“In light of the present crisis in the world food stocks, how can we continue to use edible food products as a feedstock?” asked one online participant.

Steve Pratte, senior manager of transportation and biofuel policy with the CCGA, said the organization has a longstanding policy of pushing for single-digit percentage use of canola by industrial users, so less than 10 percent.

“We’ve always promoted modest industrial use as a policy,” he said.

Current annual canola demand from the biofuel industry in Canada and the United States amounts to 1.8 million tonnes.

Canada produced about 18.17 million tonnes of the crop in 2022-23. The U.S. chipped in another 1.74 million tonnes for a total of 19.91 million tonnes.

That means the biofuel sector currently accounts for nine percent of total North American production, which is under that 10 percent threshold.

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Video: Western Canadian Agriculture: Hard Times Made the World's Best Farmers

Western Canadian agriculture produced the most advanced farmers in the world not through abundance but through adversity. The crow rate fell. The wheat price went nowhere. The brown envelopes stopped.

When the subsidies disappeared, the bad farmers left and the good ones stayed. And the ones who stayed could not just grow wheat anymore. They started growing lentils and canola and peas and flax and faba beans. They built crop rotation. They got serious about agronomy because there was no government backstop. That process produced the Western Canadian agriculture Dennis Bulani describes in this clip: the most advanced, most educated farming culture in the world.

His contrast with Iowa corn and soybean farmers is sharp. At a DeKalb farmer meeting in Okoboji, Iowa, he asked what crop rotation they ran. Beans on corn stubble, corn on bean stubble. How do you fertilize? The co-op agronomist handles it. Have you considered other crops? No need. We make so much money on corn and soybeans. Western Canadian agriculture was never allowed that comfort. And now those Iowa farmers are watching soybean markets lock up with China and corn prices slide, and they do not have the agronomy knowledge or the research base to pivot. Western Canadian farmers adapted on a dime because they had done it before.

Dennis also makes the case that Western Canadian agriculture keeps adapting in real time. Low commodity prices over the past year have pushed growers to look seriously at precision spot-spray technology. He knows a neighbor who bought a sprayer with the seeing-eye system and sprayed only 80 out of 320 acres. As a chemical retailer Dennis acknowledges that will affect his sales. He supports it anyway, because if it advances Canadian agriculture and makes farmers money, that is a good outcome.

The lesson Dennis draws from the tale of two farms: continuous improvement is the only durable strategy. When canola was $22 a bushel some growers went to Arizona instead of the Crop Production Show. When the price came down those same growers came back to the research and the discipline. Products do not go on Rack Petroleum's shelves unless they pass a replicated trial first. That is what Western Canadian agriculture built through hard times: farmers who do the work whether the times demand it or not.

Dennis Bulani is CEO of Rack Petroleum and Ultimate Yield in Biggar, Saskatchewan. Dan Aberhart hosts GTF Productions, Western Canadian Agriculture's foremost live briefing platform and its foremost AI training platform for ag operators