CANADA- Canada’s total oilseeds exports could fall by 1.5% in MY 2023/24, according to a Global Agricultural Information Network report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA).
While Canada is the third largest exporter of oilseeds in the world by volume, its share of exports has shrunk in recent years, partly because of increased domestic processing and production gains in other canola-growing countries, such as Australia.
Overall, the net production of oilseeds could decrease by less than 1% to 24.7 million metric tons (MMT) in MY 2023/24 as dryness persists in some growing areas of Alberta and Saskatchewan.
However, this decline is marginal because the country expects significant precipitation in the spring season.
Additionally, Canada’s Pest Management Regulatory Agency’s (PMRA’s) decision to ban lambda-cyhalothrin for specific crops destined for feed channels may affect planting decisions in MY 2023/24.
Lambda-cyhalothrin is a pesticide especially used in canola production and is linked to side effects such as altered walking, eye tearing, and salivation in animals. This regulation applies to every entity delivering grain to facilities in Canada.
While Canada is becoming stringent in regulating crop protection ingredients, some agronomists say the efficacy of alternatives can be lower than lambda-cyhalothrin-containing products, depending on the rationale for treatment.
Canola production’s 32% increase
The final production estimates from Statistics Canada put MY 2022/23 canola production at 18.17 MMT, a production increase of 32 % year-over-year, as yields improve due to moister conditions.
Additionally, canola oil exports could increase by 13% in MY 2022/23 due to expected increased crush levels, despite lower year-over-year oil extraction rates caused by low canola oil content.
However, while the country’s canola production is forecasted to increase, the exports could reduce in MY 2023/24 as the percentage share of canola going to domestic processors rises.
However, canola will likely compete for the planted area with crops such as beans, lentils, and wheat.
Beyond this marketing year, the national canola crush capacity could increase from 11.3 MMT to 17 MMT in 2025. The biodiesel industry is significantly driving this increased investment in crush capacity.
Canada is actively exploring export markets for the increased domestic supply of canola meal, which is crucial to supporting crush margins and researching ways to increase the nutritional content of canola meal to increase marketability and quality.
Australia is likely to continue being an avid competitor of Canada in canola exports as its production increases, drought conditions affect Canada, and more canola produce goes to domestic processors.
Soybean processing to increase
Soybean is an important oilseed, and the USDA report indicates that Sarnia, Ontario may become the home of Canada’s first soybean processing company. The company is a joint venture among new Protein International (NPI), Huron Commodities, and Hensall Co-operative’s Animal Nutrition Division.
Soybean imports could also decrease due to low processing capacity and the fact that most soybean products are imported in meal form.
For sunflower seeds, the area planted in MY 2023/24 could be similar to MY 2022/23. Yields are assumed to return to average after increased production in the previous year.
On the other hand, peanut production is less than 500 MT and is constrained by climatic conditions, with insufficient heat limiting quality and yield potential.
Imports remain steady as the main solace of peanuts for Canada.