Canola is becoming a more popular crop with US farmers as energy producers look to increase the oilseed’s role as a renewable fuels feedstock. The latest USDA data shows US farmers planted a record high of 2.66 million acres in 2024, up from 2.34 million in 2023 and 1.71 million in 2014. And canola acres need to climb a lot higher if US farmers are going to keep up with the industry’s ambitious production goals.
A joint program between energy giant Chevron, seed company Corteva, and crop trader Bunge that contracted with farmers to purchase winter canola crops and use the oil to produce renewable fuel went so well that the companies are looking to expand acreage sevenfold. “Bunge Chevron Ag Renewables” worked with farmers in Tennessee and Kentucky last season and hopes to add producers in Illinois, Indiana, and Missouri for the upcoming season starting this fall.
Bunge Chevron Ag Renewables in March announced plans to build a new oilseed processing plant adjacent to its existing processing facility located on the Gulf Coast in Destrehan, LA. The plant, expected to be operational in 2026, features a flexible design that allows it to process soybeans as well as softseeds like winter canola and CoverCress.
Scoular is also looking to utilize more canola as it converts an old sunflower processing plant in Goodland, Kansas. The company is retrofitting the facility to crush both soybeans and canola. When the Goodland facility is on line in fall 2024, it will have the capacity to crush 11 million bushels of oilseeds annually. Scoular is also setting up local delivery points at Pratt, Wellington and Coolidge, Kansas, as well as the Goodland facility. Scoular has a goal of growing its canola acreage to 400,000 within four years.
Interestingly, farmer interest in winter canola in Kansas and Oklahoma has faded in recent years due to the closing of several key delivery points, making the crop difficult to market. Multiple years of dry conditions have also dented acreage. In 2014, Oklahoma planted 270,000 acres of canola. Kansas as recently as 2017 had 50,000 acres of canola. Oklahoma was down to just 3,000 in 2023 while Kansas farmers planted only 1,500 acres. Acreage this year is forecast to improve with USDA pegging Oklahoma canola acres at 21,000 and Kansas at 8,500.
For those not familiar, canola is an annual winter or spring oil crop in the Brassicaceae family. It is related to mustard, cabbage, broccoli, cauliflower and turnip. Canola grows from three to five feet tall and has a deep taproot and a fibrous, near-surface root system. The name ‘Canola’ (abbreviated for Canadian oil, low acid) was registered in 1979 in Canada.
Canola is the same species as rapeseed, only differing genetically in its chemical composition and fatty acid profile. Though rapeseed oil is excellent for industrial uses, it has an unpleasant flavor and contains some compounds that can be dangerous to humans. Importantly, canola yields 40% oil vs. 20% from soybeans.
The largest producer of canola in the world is Canada. India, China, Australia, Russia, and the European Union are also major producers, though the data on the production of canola are often grouped with data on the production of rapeseed in countries outside of North America. Canada produces 20% of the world’s canola and is by far the largest exporter, accounting for more than 70% of the export trade.
According to Bloomberg Intelligence analyst Brett Gibbs, if the biofuel industry continues its expansion as planned, the total US and Canadian market for oils, fats and greases used to make climate-friendly transportation fuels will be valued at more than $20 billion next year. That’s up from about $6 billion in 2019. Keep in mind, those plans are at the mercy of Washington where the industry currently benefits from the Biden Administration’s support. There is no guarantee that future administrations will maintain Biden’s programs. (Sources: Bloomberg, US Canola Association, AGMRC, USDA)
