Four of Archer Daniels Midland’s oilseed crushing plants have added "Act of God" coverage to their grower contracts for high-oleic canola in 2012.
The U.S. agrifood giant last week announced the new contracts for Dow AgroSciences’ Nexera brand canola varieties at the facilities in Saskatchewan, Manitoba and North Dakota.
The company said its "AOG" coverage and premiums built into the contracts will allow growers to "insulate themselves from weather and market risks" compared to contracts for "commodity" canola.
Oil from Nexera canola yields a "unique combination" of high-oleic (omega-9) and low-linoleic fatty acids, which ADM said creates "a healthier oil option that delivers a light, clean taste and superior performance."
ADM said it "relies" on the Dow canola varieties to "help develop healthier oil solutions for the restaurant and foodservice industries."
The four plants offering the contract are at Watson, Sask., 40 km east of Humboldt; Carberry, Man., 50 km east of Brandon; Velva, N.D., about 35 km southeast of Minot; and Enderlin, N.D., about 80 km southwest of Fargo.
To qualify for the premiums and coverage, farmers must first sign the contract and then buy the Nexera canola seed from a "specified local seed retailer," ADM said.
Farmers’ contracted production is then covered 100 per cent with "multiple" pricing options, including a base contract with coverage "dependent upon the region," ADM said.
"We rely on farmers to help us meet the growing consumer demand for healthier oil options such as high-oleic canola," Ken Campbell, general manager of ADM’s softseed processing arm, said in the company’s release.
"Our partnership with Dow AgroSciences for Nexera canola allows us to offer farmers attractive contract options."