GAIN Report - CA8029 Page 12 of 14
Required Report - Public distribution
Date: 5/5/2008
GAIN Report Number: CA8029
CA8029
Canada
Oilseeds and Products
Oilseeds Annual Report
2008
Approved by:
Lisa Anderson
U.S. Embassy
Prepared by:
Darlene Dessureault
Report Highlights:
Total Canadian oilseed production during 2008/2009 is forecast to increase to 12.5 MMT from 11.5 million metric tons produced a year earlier. This increase is due to an 8% increase in canola production and a 12% increase in canola production. Acreage in canola and soybeans is only expected to increase .05% and 2.4%, respectively, from previous year’s levels. The forecasted increase in production is attributed to a return to average yields in 2008/2009. Low carry-in stock in canola and in soybeans may off-set production increases, resulting in supplies similar to 2007/2008 levels. In soybean production, the decrease in demand from the Canadian livestock industry will result in an increase in domestic crush, while exports are predicted to fall from the previous year’s high levels. This should help increase stocks. In canola, strong world food and biofuel demand will draw down stocks as exports and use in crush are predicted to increase.
Includes PSD Changes: Yes
Includes Trade Matrix: Yes
Annual Report
Ottawa [CA1]
[CA]
Table of Contents
Executive Summary 3
Summary: Total Oilseeds 3
Summary: Total Meals 3
Summary: Total Oils 3
Quality Reports 3
Canola (Rapeseed) 5
Canola (Rapeseed) Meal 6
Canola (Rapeseed) Oil 6
Crush Capacity Utilization 7
Soybean 8
Soybean Meal 9
Soybean Oil 9
Crush Capacity Utilization 10
Sunflower Seed 11
Peanut 12
Table 1: Total Peanut Imports, In-Shell Basis 12
Table 2: In Shell Peanut Import Trade Matrix 12
Table 3: Shelled Peanut Import Trade Matrix 13
Table 4: Blanched Peanut Import Trade Matrix 13
Table 5: Peanut Oil Import Trade Matrix 13
Table 6: In Shell Peanut Export Trade Matrix 14
Table 7: Shelled Peanut Export Trade Matrix 14
Table 8: Peanut Oil Export Trade 14
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Executive Summary
Summary: Total Oilseeds
On balance, total Canadian oilseed output (canola + soybean + sunflower seed) during 2008/09 is forecast to reach about 12.5 million metric tons (MMT), a 9% increase from the 11.5 million metric tons produced a year earlier. This is due to an 8% increase in canola production and 12% increase in soybean production. Sunflower seed production is expected to fall by 26% compared to 2007/2008 levels. Sunflower seed production accounts for a small percentage of oilseed production and therefore the decrease in tonnage will not be enough to significantly offset the production increases of the major oilseeds.
In late April 2008, Statistics Canada reported that canola producers intended to plant 0.5% more hectares than last year. The expected increase in canola production is attributed to a return to more normal yields after extreme heat during the last year’s growing season negatively impacted the yields. Statistics Canada’s March planting intentions survey indicates that soybean producers will plant 2.4% more acreage in 2008/09. The expected 12% increase in soybean production is mostly driven by an expected increase in yields. Seeding intentions for sunflower seed reveals that producers anticipate planting 21% less hectares to sunflower seed. This is due mainly to competition from more lucrative crops.
Summary: Total Meals
Total oilseed meal production in Canada (canola and soybean) in 2008/09 is forecast to reach 3.53 MMT, a 5% increase from the previous year’s levels of 3.36 MMT. The anticipated increase in soybean production is forecast result to in a 12% increase in soy meal production over year 2007/2008 levels. Despite a forecasted 8% increase in canola production, canola meal production will only increase marginally (2%). This reflects the available supplies of canola for crush. The increase in canola production is off-set by low beginning stocks.
Canada is a net exporter of canola meal and a net importer of soybean meal. Canola meal exports are expected to increase by a marginal 1% in 2008/2009 due to decreased supplies resulting from flat carry-in stocks and only marginal increases in canola meal production. Most will likely go to the U.S. market where it is used in dairy rations. Soybean meal imports from the U.S. are expected to decline due to a contraction in Canada’s hog industry and increased domestic production.
Summary: Total Oils
Total Canadian production of oil from oilseeds in 2008/09, is expected to increase by 1%. This increase is due almost entirely to the increase in soy oil production resulting from increased supplies. Exports for canola oil are forecasted to be similar to 2007/2008 reflecting the available supplies and the strong demand for rapeseed oil by the United States and to Pacific Rim markets.
Quality Reports
Much of the responsibility for the quality of Canadian grain and oilseeds entering domestic and international markets belongs with the Canadian Grain Commission (CGC). The CGC’s annually publishes “Harvest Reports”. These reports describe the quality of Canadian oilseeds surveyed from the annual harvest in the Prairie Provinces and in Ontario. For example, the 2007 harvest report for canola reports that the western Canadian canola crop was near the 10-year average for both oil content and protein content. For soybeans, the 2007 harvest report indicates that oil and protein content was average but that there were wide regional variations. More information can be found at: http://www.grainscanada.gc.ca/Quality/crop_qual-e.htm
Canola (Rapeseed)
For 2008/09 Canadian prairie farmers have indicated that they may be seeding a record area of canola. According to Statistics Canada’s March Seeding Intentions Survey (published April 24th), canola area will rise to almost 6.0 million hectares. High internal prices for vegetable oils are making canola an attractive option.
Canola yields fell slightly in 2007/2008 due to drier than normal conditions that were detrimental to the crop. Crop analysts expect canola yields in 2008/2009 to be more in line with normal yield averages.
The forecasted 8% increase in canola production may be off-set by low carry-in stocks. As a result, supplies in 2008/2009 are expected to be close to year 2007/2008 levels. Strong world food and biofuel demand will result in stocks in 2008/2009 being drawn down as exports and use in crush increase.
The demand for industrial use of canola in bio-diesel remains uncertain. In December, 2007, the federal government introduced legislation (Bill – 33) into the Parliament that would allow the government to mandate renewable fuel content in transportation fuel, including diesel. The global food crisis has resulted in a close scrutiny of that legislation and as a result, modification to the bill have been made such as the inclusion of provisions that require a review of impacts and new information within a year, and subsequent reviews every year. The possibility that a renewable fuels mandate could be rolled back may be creating some uncertainty in the bio-diesel market in terms of investing in infrastructure such as the additional crush capacity that would be required. On the food side, canola oil is enjoying increased popularity as a “healthy oil”. A new health accreditation from the FDA in the United States and the switch to canola oil by Canadian Kentucky Fried Chicken franchises (786 stores) has helped raise its profile. The canola industry continues to aim for 15 million tons by 2015.
Canola (Rapeseed) Meal
Canola (Rapeseed) Oil
Crush Capacity Utilization
According to the Canadian Oilseed Processors Association, the utilization of canola crush capacity in Canada over calendar year 2007 decreased by nearly 7% over year 2006 levels:
2002 Jan-Dec 53.8%
2003 Jan-Dec 67.4%
2004 Jan-Dec 84.7%
2005 Jan-Dec 84.5%
2006 Jan-Dec 93.7%
2007 Jan-Dec 87.5%
Soybean
A small, 2.4% increase in acreage combined with above average yields is forecasted to result in a 12% increase in soybean production in 2008/2009. March 2008 planting intentions survey released by Statistics Canada show an increase in soybean acreage to increase to 1.21 million hectares from 1.18 million hectares in 2007/2008. In 2007/2008, yields were 2.30 t/ha, much lower than average yield of 2.47 t/ha. Agriculture Canada expects yields in crop year 2008/2009 to be closer to 2.53 t/ha. The small shift to soybean production may be in response to the increasing cost of inputs in corn production by Quebec and Manitoba producers. The increase in production is off-set by low carry-in stocks resulting in total supply level only marginally higher than 2007/2008 levels.
In 2008/2009, soybean acreage in Quebec is expected to increase by 36% to 240 thousand hectares. This increase is due in part from less expensive inputs costs for soybean production compared to corn (corn for grain acreage is expected to decline by 11%).
According to Statistics Canada, Manitoba farmers indicated that they might also increase soybean plantings from 93.1 thousand hectares in 2007/2008 to 113.3 thousand hectares in 2008/2009. Soybean acreage for Ontario is expected to decrease by 6.2% from the previous year’s level of 906.5 thousand hectares. Ontario producers suffered low yields in 2007/2008 and this may have discouraged them from planting soybeans in 2008/2009. Ontario’s soybean industry is making an effort to address stagnant yields in soybeans in the province. Efforts include researchers from Guelph setting up management plots and the Ontario Soybean Growers launching an “Ontario Yield Soybean Challenge.”
The decrease in demand in the domestic livestock industry will result in an increase in domestic crush. Exports are expected to decrease from the high levels experienced in 2007/2008. This will help increase stocks.
Soybean Meal
Soybean Oil
Crush Capacity Utilization
According to the Canadian Oilseed Processors Association, the utilization of soybean crush capacity in Canada in calendar year 2007 decreased from 2006 as shown below.
Canola Soybeans
2002 Jan-Dec 84.8%
2003 Jan-Dec 84.5%
2004 Jan-Dec 70.0%
2005 Jan-Dec 79.4%
2006 Jan-Dec 67.9%
2007 Jan-Dec 67.1%
Sunflower Seed
Peanut
Peanut production in Canada is constrained by climatic conditions. Agriculture extension reports indicate that a minimum of 3,000 corn heat units is required for normal growth and development. Peanuts grown in areas with fewer heat units will not reach optimum maturity and generally the yield is too low to justify commercial production. As a result, minor peanut production is limited to a few farms in southern Ontario that plant in the range of 200-400 hectares. As a result, Canada is a net importer of peanuts with the United States and China being the top suppliers. For Canadian peanut trade data, see the statistical section of this report.
Table 1: Total Peanut Imports, In-Shell Basis
** shelled and blanched converted to in-shell basis using a factor of 1.3333
Table 2: In Shell Peanut Import Trade Matrix
Table 3: Shelled Peanut Import Trade Matrix
Table 4: Blanched Peanut Import Trade Matrix
Table 5: Peanut Oil Import Trade Matrix
Table 6: In Shell Peanut Export Trade Matrix
Table 7: Shelled Peanut Export Trade Matrix
Table 8: Peanut Oil Export Trade
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UNCLASSIFIED USDA Foreign Agricultural Service