Latest news with #canola
CTV News
18 hours ago
- Business
- CTV News
Tariffs on canola seen supercharging Canadian farmers' shift to spring wheat
Pumpjacks draw out oil and gas from well heads surrounded by Canola fields near Cremona, Alta., Monday, July 15, 2024. Canada has the third largest oil reserves in the world and is the world's fourth largest oil producer. Canola is an important oilseed crop for Canadian farmers, forming the top three crops by average in 2019-2023 in Alberta, Saskatchewan and Manitoba, according to Agriculture and Agri-Food Canada. THE CANADIAN PRESS/Jeff McIntosh
Reuters
19 hours ago
- Business
- Reuters
Insight: Tariffs on canola seen supercharging Canadian farmers' shift to spring wheat
WINNIPEG, Canada, June 9 (Reuters) - In the U.S. Great Plains, where spring wheat once dominated fields, farmers are turning away from the crop. But across the border in Canada, the pinch and prospect of Chinese and U.S. tariffs on canola have prompted farmers to pick up the slack on wheat. Farmers are still putting their crops in the ground, so it is not yet possible to know the extent of the acreage shift into wheat. However, early signs, based on interviews with more than 20 Canadian and U.S. farmers, agricultural analysts, traders and industry organizations, show that the grain primarily used to bake bread is proving to be a big winner in this year's global trade war. China's 100% tariffs on Canadian canola meal and oil and its threat to impose duties on canola seed, amid President Donald Trump's broader global trade war, have rattled Canadian farmers, who since 1990 had nearly quadrupled their canola acres before paring back in recent years because of growing problems with drought, high production costs and crop diseases. Now, tariffs are expected to accelerate the likelihood that thousands of farmers could further cut back, adding up to hundreds of thousands or even millions of acres less canola, and more wheat, farmers and analysts estimated. "There is going to be a massive switch," said Jerry Klassen, a Manitoba farmer and market analyst with Resilient Capital. He has switched hundreds of acres on his own farm from canola to spring wheat this year and thinks like-minded farmers will do the same. Reuters' reporting on fallout from tariffs in grain markets illustrates how global trade turmoil is causing the neighboring countries to diverge on spring wheat production. Canada's rebounding supply of wheat has kept prices down for millers who fuel global bread demand as well as consumers. The shift to Canadian fields has also offset some worry about the long-term decline in U.S. production area. Politicians in Canada are funding and supporting the shift toward greater wheat production as a way to shield the thinly-populated agricultural export powerhouse of Western Canada from foreign pressure. And farmers have their own motivation: improved wheat varieties have boosted the grain's profitability. Adam Dyck of U.K. breadmaker Warburtons in Winnipeg said some Canadian farmers had tripled their production to 90 to 100 bushels per acre since the 1990s. The shift toward wheat reflects canola's vulnerability to tariffs. Most of the C$14.5 billion ($10.59 billion) 2024 Canadian canola exports go to the U.S. and China, with the U.S. biofuels market consuming most of Canada's canola oil while China buys most of Canada's seed exports to crush for edible oil and animal feed, while wheat is sold to dozens of countries around the world. Some Canadian farmers are expecting that in a prolonged trade war, globally-diverse wheat is a safer bet than U.S. and China-dependent canola. In 2024 Canada shipped two-thirds of its total canola seed exports to China, and 95% of total canola oil exports of 3.5 million tons to the U.S. But Canada's wheat exports were "highly diversified," the U.S. Department of Agriculture noted., opens new tab The world's wheat and canola markets will be guessing for weeks about Canadian farmers' final decisions on what to seed. Statistics Canada's next report is scheduled for June 27, and the numbers for that report are being collected before farmers have finished planting. Scott Huso, a farmer in Aneta, North Dakota, said that across the northern Great Plains, stretching from Minnesota to the Montana Rockies, farmers have been planting less wheat in favor of crops like corn and soybeans, which are generally more profitable. University of Minnesota data found that last year, farmers in central Minnesota earned hundreds of dollars in operating profit per acre with corn and soybeans, but lost money on spring wheat in 2024, opens new tab. "Wheat, you're not making money on it," Huso said. U.S. total hard red spring wheat production hasn't changed much since the mid-1990s because of substantial improvements in the amount grown per acre. However, total acres are in long-term decline, dropping from 15-20 million acres in the mid-1990s to 13-15 million in the mid-2000s to 10-13 million in the mid-2010s. The U.S. Department of Agriculture said on March 31 that it expects hard red spring wheat acreage in 2025 to drop to 9.4 million acres -- the lowest since 1970. Yet spring wheat is in great demand from the world's millers and bakers. Its high protein content allows it to be used as the base for top-quality bread flour, or as something to blend with lower-quality, cheaper wheats. The U.S. and Canadian plains are the most reliable major source of the world's high-quality spring wheat. Yet that doesn't always lead to the kind of premium prices U.S. farmers might need to justify growing the crop, with steady Canadian supplies and those from overseas competitors like Russia keeping millers comfortable enough to avoid bidding wars, a frustration for many U.S. farmers like Huso. "You just can't convince guys to love wheat these days," said Huso, a member of the North Dakota Wheat Commission. Committed wheat growers like him and organizations like the commission and export-focused U.S. Wheat Associates are trying to convince buyers to pay higher prices and breeders to produce better wheat crop varieties to help wheat compete for U.S. farmers' fields. It's been an uphill struggle. In Canada, the mood is different. Rather than getting knocked out of the crop roster, more farmers are warming to wheat. In May, farmer Korey Peters finished seeding 1,700 acres of spring wheat on his farm near Winnipeg. With new varieties providing more crop per acre, and canola costly and hard to grow profitably in his area, he said he's been putting more and more of his land into wheat and corn. "I know some people call it 'poverty grass,' but it works for us," Peters said. ($1 = 1.3691 Canadian dollars)
Globe and Mail
22-05-2025
- Business
- Globe and Mail
Canada's canola farmers stand to gain from U.S. tax breaks for clean fuel
Embattled Canadian canola farmers are poised to gain from a revised tax credit for clean fuels approved by the U.S. House of Representatives Thursday morning as part of President Donald Trump's 'big, beautiful bill.' The 45Z Clean Fuel Production Credit incentivizes the production of low-carbon transportation fuels in the United States. The tax credit came into force in January as part of former president Joe Biden's Inflation Reduction Act. But certain stipulations made feedstock from Canadian canola ineligible. The Republican bill slashes those requirements. Should the expansion pass through the Senate, it could drive increased demand for Canadian canola – a boost much needed by a sector that recently faced a steep decrease in U.S. sales and tariffs from its second-largest market, China. Political uncertainty north and south of the border has also depressed investment in what was once a booming domestic processing sector. 'We're keeping our fingers and toes crossed that we will see some good news here,' said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. The U.S. tax credit will subsidize the production of transportation fuels with low-life-cycle greenhouse-gas emissions, such as ethanol and biodiesel or renewable diesel. These fuels are sourced from renewable biomass such as corn, soybeans, canola or used cooking oil. It is a win for red farm states, which have been slammed by a trade war with their largest market for corn and soybeans, China. The tax credit is one of the few clean-energy policies from Mr. Biden's 2022 Inflation Reduction Act to survive. (A tax break for buyers of electric vehicles and credits for low-emissions electricity such as wind, solar, battery and geothermal power will be rapidly phased out.) The clean-fuel incentives would be a top-up on requirements under the U.S. Renewable Fuel Standard Program – a federal initiative that requires transportation fuel sold in the United States to contain a minimum volume of renewable fuels. It will help farmers capitalize on growing demand for clean fuel, said John Fuher, vice-president of government affairs at Growth Energy, a U.S. biofuel trade association. According to the group, the credit could add US$21.2-billion to the American economy, and provide farmers with a 10-per-cent price premium on low-carbon corn used at a bioethanol plant. The Biden administration's version of the tax credit represented a loss, rather than a gain, for Canadian canola farmers and processors. To qualify for the tax credit under the previous administration, feedstock had to fall below an emissions threshold. This threshold included emissions caused by switching land to crop production. The indirect land use change (ILUC) policy put Canadian canola above the emissions threshold, making it ineligible for the credits. This had ramifications for trade. There was a 66-per-cent drop between December and March for Canadian crude canola oil exports to the U.S., said Mehr Imran, senior analyst of carbon markets at ClearBlue Markets. The Republican bill eliminates the ILUC policy and stipulates that Canadian and Mexican feedstock would be eligible. Feedstock from other countries – for example, used cooking oil from China – would not. 'We think it is really important that we have open two-way trade between our two countries,' said Geoff Cooper, president and chief executive officer of the U.S.-based Renewable Fuels Association. It is much-needed good news for Canadian canola farmers who have also faced 100-per-cent tariffs on canola oil and meal from China. Beijing's move to introduce the levies in March was in retaliation for Ottawa's tariffs on Chinese-made electric vehicles. Ambitious plans to expand canola crush capacity have also lost momentum. In Canada's largest canola-producing province, Saskatchewan, five new plants were announced starting in 2021. Only one has come online. Others are in progress, behind schedule, indefinitely on pause or have not broken ground. Reasons for delays include trade uncertainty with the U.S. and concerns about a potential new conservative government in Ottawa killing Canada's Clean Fuel Regulations. 'It's always good to have more competition for your product,' said Roger Chevraux, an Albertan canola farmer who serves on the board of the Canadian Canola Growers Association. 'It means we're less vulnerable.' However, the tax credit could have other implications for Canada's refineries, Ms. Imran said. Canada has 10 clean-fuel facilities. While the country is a net exporter of refined petroleum products and crude oil products, it is a net importer of biofuels. There is some investment in clean-fuel processing. For example, on May 2, Imperial Oil Ltd. announced that its highly anticipated renewable diesel facility located near Edmonton will commence operations in mid-2025. U.S. subsidies give refineries south of the border an edge over Canadian plants in provinces without competitive subsidies, Ms. Imran said. 'Canada may want to take a look at the competitiveness of domestic refineries in light of the U.S. incentives.'
Mail & Guardian
19-05-2025
- Business
- Mail & Guardian
Rise of canola production in SA an inspiration for other value chains
Farmers plan to increase the area under canola to 166 500 hectares this 2025-26 season. Photo:Many crops and their related value chains have shown dramatic progress in recent years. This should inspire further growth in this sector. I often write about But soybeans aren't the only winners in South Africa's vegetable oils cluster. Canola is also an agricultural success story. Since South African farmers planted the crop commercially on 17 000 hectares in 1998-99, the area has increased to an estimated 165 750 hectares in 2024-25. For the new season of 2025-26, the farmers plan to increase the area to 166 500 hectares. Like soybeans, the catalyst behind the increase in canola plantings is a rise in domestic demand for, and use of, oils and oilcake. South Africa is now a net canola exporter, having recently exported to countries such as Germany and Belgium. There has been a switch in traditional winter wheat and barley-growing areas to canola because of the firm demand and the price competitiveness. Canola is a winter crop, hence, production is primarily in the Western Cape, a winter rainfall region. The farmers intend to plant 166 500 hectares, up by 0.5% from the previous season. If we assume relatively favourable weather conditions and a decent yield, applying a five-year average yield of 1 89 tonnes a hectare, South Africa looks set to harvest 314 685 tonnes, up 9% from the previous season. This could be a fresh high. Admittedly, it is still too early to tell with certainty where the canola crop harvest will be and whether farmers will manage to plant the area they intend to. The key determinant will be the weather conditions. Fortunately, the weather has turned positive, promising some showers in the Western Cape in the last two weeks of May. Under this assumption, we can remain optimistic. Putting the current weather forecasts aside, I think it's fair to say that canola is one of the success stories of South African agriculture, belonging in the same category as the soybean industry and many of our fruits. From now on, the objective is to see increases in various commodities, such as canola, and general improvement in agriculture in the parts of the country that haven't been part of the success story, like the former homelands. But for that to materialise, we need coordinated support and effective collaboration between the government and business. The government will need to do its part to improve land governance, while leaning on commodity associations for support in unlocking the agricultural value of these regions at the periphery of South Africa's agricultural achievers. This is an important step, not only for crops and fruits, but also for livestock and the poultry industries, which are already the key value chains with better penetration in the former homelands regions. Again, as I have said several times, the effort to realise this ambition does not require new planting. We already have the The plan seeks to improve South Africa's agriculture by unlocking various hindrances in key value chains and takes a commodity-specific approach. Importantly, it is also clear on what value chains could thrive in multiple regions. What is left is for it to be fully implemented. My book, The success of South Africa's canola industry should inspire others in the agricultural sector. Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of South Africa.
CTV News
16-05-2025
- General
- CTV News
Seeding across Saskatchewan now almost half complete
David Reid drives a seeding rig as he plants a canola crop on the family's farm near Cremona, Alta., Tuesday, May 16, 2023. THE CANADIAN PRESS/Jeff McIntosh
