The USDA, in its March 31 Prospective Plantings Report, indicated North Dakota canola producers intend to plant a record 1.9 million acres of canola in 2023, an increase of six percent, 100,000 acres, over last year’s record. This estimate is in line with estimates from many industry observers. The next acreage report will be released June 30 when the USDA issues its June Acreage Report.
For the U.S., the USDA said producers intend to plant a record high 2.27 million acres in 2023, up three percent from last year’s planted area. Compared with last year, planted area is expected to decline in every state except North Dakota, the largest canola-producing state. Total canola production could reach 4 billion pounds, an increase of five percent. While the biofuels industry growth is expected to increase canola acres in southern and southeastern states, last year’s drought impacted winter canola plantings in Kansas and Oklahoma.
The canola industry received news of another addition to canola crush capacity in Canada on April 11. Louis Dreyfus Corporation announced it will double the crush capacity at its facility in Yorkton, Saskatchewan, increasing the crush to 2 million metric tons by the end of 2025. This is the latest of many announced additions to canola crush capacity in North America in recent years. The announcement, along with World Ag Supply & Demand (WASDE) numbers, did little to lift canola prices as recession worries and a large South American soybean crop continue to weigh on commodities.
The WASDE report was somewhat positive for global vegetable oil markets, dropping global soybean production and ending stocks for rapeseed, even while rapeseed production estimates increased in the last month. Meanwhile, the USDA continues to report that the European Union will import, crush, and consume record amounts of rapeseed this year. Imports of 6.7 metric tons (MT) will be 30 percent higher than the 5-year average as demand for rapeseed will continue to outstrip domestic production in the European Union following years of drought and its ban on the use of neonicotinoid insecticides, according to the USDA.
The most recent data from the U.S. Energy Information Administration shows a larger than predicted ramp up in canola oil use for biodiesel and renewable diesel. In January, 242 million pounds of canola oil was used, nearly triple the amount used in Jan 2022, while also up 42 percent from the prior month.
If canola oil use for the biofuels industry continues at this pace, it will shatter the expected total use for the year by 70 percent. Canola oil represents 16 percent of all vegetable oils used for biofuel production, up from 5 percent last year. While monthly consumption of canola oil at this pace would sap up 3 million acres of canola, the number is expected to ease back as the numbers may have been skewed upward as this was the first full month in which companies were able to use canola oil for renewable diesel with Renewable Fuel Standard (RFS) credits, following the recent EPA approval of a canola renewable diesel pathway and the lag time it took for companies to register and get canola oil use in place. However, the renewable diesel market is expected to continue to ramp up significantly in the next three years.
Source: agupdate.com
Photo Credit: GettyImages-ligora
Categories: North Dakota, Crops