Canola producers hope to convince the government to boost biofuel requirements for diesel, which would provide a bigger market for their crops. (File photo by Advocate staff)

Canola producers hope to convince the government to boost biofuel requirements for diesel, which would provide a bigger market for their crops. (File photo by Advocate staff)

2021 starting off with some positive signs for canola producers

High prices and potential for biofuels provide optimism

Central Alberta’s canola farmers are seeing many positive signs for 2021.

Prices are high and there’s been movement on using more canola for biofuels, said John Guelly, chair of the Alberta Canola Producers Commission.

“There’s going to be a pretty low canola carry-out so that should keep prices high. But there are certainly challenges too.

“We’ve had a lot of weather issues over the past few years,” he said, adding clubroot also remains an issue and producers have to remain vigilant.

Last year’s harvest went smoothly for most producers, unlike 2019 when late snows brought harvesting to a halt with a lot of canola left standing in fields across the province.

There is hope that Chinese market restrictions might be eased, which would mean the biggest customer for Canadian canola would be once again buying huge amounts.

That situation is not expected to be resolved soon but what China will do is unpredictable.

Sales did not dry up completely. Canadian farmers were able to sell through middleman countries, but the Chinese ban did hurt.

Biofuels has provided another big opportunity for canola producers and helped make up for some of the lost Chinese sales, said Guelly.

“There’s been a ton of canola going into Europe so we’re hoping that continues as well. If we could keep those two markets going I don’t know if we could supply enough canola, to be honest.

“The biofuels market is huge,” he said.

The recently released Clean Fuel Standard released by the federal government has the potential to boost long-term demand for canola.

Today, diesel fuel in Canada must contain two per cent biofuels. Canola producers and others are asking the government to bump that content up to five per cent.

“That’s something we’re really pushing for.”

“The preliminary outlook is pretty good on that. They are very high on canola being a low-carbon-footprint-crop.”

Changing the biofuel content to five per cent would require as much canola as Canada ships to Japan annually.

It would likely take several years to ramp up the biofuel content but the potential for creating a much bigger domestic market is huge.

That will help canola producers with their goal of finding more market, rather than rely on a major customer such as China, who can send waves through the supply chain if they pull back on buying.

“We’re hoping to spread (sales) around and have more markets for canola and the biofuels is one part of that.”

Biofuels have also come a long way in recent years. A new process has improved the quality of the diesel produced with biofuels.

Sylvan Lake-area farmer Mike Ammeter says all commodity prices, not just canola, are high this year.

“It’s just a big bull run on commodities right now,” he said.

“Producers, if they are locking in prices at what they’re at today, there is good profit to be made.”

On the other side of the coin, those who locked in prices last year may be kicking themselves.