Overview of North
American Canola
Industry
International Rapeseed
Congress – Winnipeg
June 27,2005
Ernie H. Unger
World Oil & Fat Production
World Oil & Fat Disappearance
35.00
MM - MT
30.00
Soybean
25.00
Palm
20.00
Animal (4)
15.00
Canola
10.00
Sunflower
5.00
0.00
'98
'99
'00
'01
'02
'03
'04
'05
Yr ending Oct
Source : Oil World
Animal fats includes butter, lard, tallow and fish oils
World Vegetable Oil Supply
Dynamics




Canola/Rapeseed oil is third largest
global vegetable oil source.
Canola oil supply is trending upward
and is expected to grow in Europe
with demand for biodiesel.
Palm oil supply will surpass Soybean
oil supply in 2005.
Growth of global Sunflower oil
supply appears to be flat.
Canadian Farm Grain Income
Net Cash Farm Receipts
3.500
Cdn $, billion
3.000
2.500
Wheat w/o Durum
2.000
Durum Wheat
1.500
Barley
1.000
Canola
0.500
0.000
'97
'98
'99
'00
'01
'02
'03
'04
Year
Source :Statistics Canada
Canola Is Critical to Canadian
Farm Income



Canola was highest source of Net Farm
Income in 1998 and 2003 , surpassing
wheat income.
Canola production area is considerably
smaller than wheat production area,
indicating that Canola is a higher unit
value crop compared to wheat in Canada.
Net farm income from major grains in
Western Canada is trending down, reemphasizing the desire for value added
crops, such as high oleic canola.
Canola Production Area
North American Canola Production Area
16.0
14.0
12.0
10.0
Acres, MM 8.0
Canada
6.0
4.0
USA
2.0
0.0
'97
'98
'99
'00
'01
'02
'03
'04
Year
Source :Statistics Canada
USA Canola Assoc.
Canola Production Volume
North American Canola
Production
10.0
8.0
MM - MT
6.0
4.0
Canada
2.0
USA
0.0
'97
'98
'99
'00
'01
'02
'03
'04
Year
Source :Statistics Canada
USA Canola Assoc.
Canola Yields
Canola Yields, Bu/Ac
35.0
Bu/Ac
30.0
25.0
20.0
USA
15.0
10.0
Canada
Wgtd Ave
5.0
0.0
'97
'98
'99
'00
'01
'02
'03
'04
Year
Source :Statistics Canada & USA Canola Assoc.
US and Canada yields compliment each
other, providing some improvement in
year to year yield stability.
Canola Yields
Average Yearly Yield vs 5 Year Rolling Average
Yield
30.0
20.0
Canada
15.0
5 Yr. Rolling Ave
10.0
5.0
4
'0
2
'0
0
'0
8
'9
6
'9
4
0.0
'9
BU/AC
25.0
Year
Source :Statistics Canada & USA Canola Assoc.
Canola Yields are
Trending Up


Using 5 year rolling average takes out
some of the year to year variation and
indicates Breeders have made real
improvements in canola yields.
Recent yield trends appear to have
reached a plateau:
– Impact of 2002 drought on rolling average

Recent advancements in hybrids and
expansion of hybrid production are
expected to improve overall canola yields
further in the future.
Canola Price Relationship
10.0
9.0
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
500
450
400
350
300
250
200
150
100
50
0
$/MT @ Vcr
Production, MM - MT
Canola Supply & Price Relationship
Production, MM - MT
Ave Price Instore Vcr
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04
Source :Statistics Canada
Canola Supply Demand
Relationship




Canola price is based on monthly average instore
Vancouver value of canola grain from Statistics
Canada.
Typical supply/demand curve would indicate
increase in price as supply decreases.
Canola price does not follow canola supply in a
typical supply demand curve.
Canola prices influenced by:
– World oil and meal supply
– Canola with high oil content is favored by an oil driven
global market
When developing marketing strategies
for canola, growers should focus on
world oil supply and demand rather
than on canola supply.
Canadian Canola
Canola Seed Utilization, MM - MT
Supply
Exports
Crush
Other
'99
'00
'01
'02
'03
'04
9.57 9.50 6.36 5.90 7.92 8.45
3.93 4.92 2.56 2.42 3.77 3.29
2.98 3.01 2.29 2.23 3.39 3.03
0.50 0.48 0.26 0.36 0.15 0.48
Canadian Canola Exports
Canola Seed Export Destinations, MM - MT
Japan
Mexico
China
USA
Other
'99
1.82
0.57
1.21
0.28
0.04
'00
1.88
0.91
1.89
0.25
0.00
'01
1.61
0.63
0.19
0.09
0.03
'02
1.61
0.41
0.00
0.19
0.21
'03
1.68
1.07
0.41
0.32
0.30
'04
1.75
0.88
0.28
0.36
0.29
Canadian Canola Crush
Canola Crush Oil Disappearance, 000 - MT
Supply
Utilization
Domestic
USA
China
Mexico
Other
'99
1,390
'00
1,353
'01
1,035
'02
962
'03
1,455
'04
1,320
421
531
161
34
196
400
543
258
35
91
341
503
52
49
82
294
444
85
32
85
350
556
440
38
43
370
520
319
37
55
US & Mexico canola oil demand is very
stable & does not reflect total canola
supply & demand.
Canadian Canola Meal
Canola Crush Meal Disappearance, 000 - MT
Supply
Utilization
Domestic
Export
'99
1,870
'00
1,901
'01
1,504
'02
1,419
'03
2,132
'04
1,902
655
1,184
682
1,143
674
820
555
854
573
1,536
580
1,305
Oil & Fat Consumption in
North America
Per Capita Consumption
Kg/person
USA
48.9
Canada
44.1
Mexico
25.8
Source : Oil World Annual
• US per capita consumption has increased 25%
in the past 15 years.
• US and Canada consumption showing slight
down trend over past 5 years.
Commercial Environment Next 3-5 Years
 Obesity/Diabetes Remain In Spotlight
 Government Intervention Into Food Choices – Claims,
Portions, Advertising
 Prevention/Benefits Become Formulation Drivers For Food
Companies
 Energy Density Becomes A Design Criteria
 Modified Crops Remain Costly To Research and Produce
 Substitutes For Hi Oleic Canola Attract Funding/Effort
 Modified Oils Remain A Niche—Although Of Some Size
 Growers Continue To Seek Value Added Crop Opportunities
& Premiums
What Messages Influence Consumers?
 No Trans
 No Saturates
 Reduced Calorie
These 3 Sound Bites Will Drive Consumer
Behavior As It Relates To Fats In The Diet
High Oleic Canola Oil Provides A Solution
for the Food Industry
(5% Sats)
CV 85
HF Soy*
(14% Sats, 23% Trans)
(7% Sats)
CV75
(7% Sats)
CV 65
Hydro Soy
(19% Sats, 28% Trans)
NuSun
(10% Sats)
Soy
(14% Sats)
Canola
(7% Sats)
0
(4% Sats)
20
40
60
AOM Hours
High Oleic Canola provides high stability with low trans and
saturated fatty acids
Canola Oil Utilization Outlook in
North America
High Oleic Canola

High stability, low saturated and zero trans
fatty acids per serving features make high
oleic canola oil well suited to replace
partially hydrogenated oils in numerous
food applications:
–
–
–
–
Self Life and taste is must have
Frying in food manufacture and food service
Spray oil
Some bakery products where solid fats are not
critical to product performance
Canola Oil Utilization Outlook in
North America
Current Canola Oil
– Has a very good fit to remain in most
applications where canola oil is used
today in low to moderate heat/stress
applications:





Lowest in Saturated fatty acids of all
commercial oils
Zero trans per serving
High levels of omega 3 fatty acids
35% of canola oil consumed in US today is
used in retail and dressing applications.
Mexico utilizes mostly non hydrogenated oils
and will continue to use current canola oil
Thank You!