North Dakota canola acreage set to increase

(Photo courtesy Canola Council of Canada)

CNS Canada –– Canola acreage in North Dakota is expected to increase slightly in 2015, as it offers many benefits for farmers in the state, industry officials say.

“We’ve been projecting canola acres all along to go up from 1.2 million to maybe 1.3 million in North Dakota this year,” said Barry Coleman, executive director of the Northern Canola Growers Association.

The majority of U.S. canola is grown in North Dakota. U.S. Department of Agriculture data shows 1.6 million acres of canola were seeded in the U.S. last year, with 1.2 million in North Dakota. Other producing states include Minnesota, Montana, Idaho, Oklahoma, Oregon and Washington.

There may be a few farmers planting canola for the first time, he said, but the majority will be experienced growers who have had really good yields the last few years.

Growers in the northern U.S. like canola because they are comfortable with the straight-cutting ability of the crop and are pleased with the yields and the rotational benefits they get, he added.

If North Dakota farmers seed the 1.3 million acres expected this spring, that would fall into the higher end of average area for the state, Coleman said. According to USDA, 915,000 acres of canola were seeded in the state in 2013.

When it comes to overall returns for U.S. farmers, canola doesn’t look any more attractive than other crops, Coleman noted.

Some farmers aren’t pleased with spot cash prices in the North Dakota region as they seem lower than those of their Canadian counterparts. But when factoring in the currency exchange, they are still getting similar prices.

“I do think the lower Canadian dollar has been kind of a negative influence,” Coleman said.

For example, Prairie Ag Hotwire shows Canadian spot cash bids reaching levels of about C$10.30 per bushel as of Wednesday. Farmers in the northern U.S. are seeing average prices of about US$8.36 per bushel, according to data on the Northern Canola Growers website.

But accounting for the currency exchange (US$1=C$1.2416), the North American close on Wednesday, the price is basically the same.

Farmers may still think prices are unfavourable in the U.S., but that doesn’t seem to be discouraging acres as some U.S. processors are offering attractive new-crop contracts.

“All of the crushing plants in this region have had quite an expansion in capacity and Canada has also had expansion,” Coleman said. “So right now I think the processors certainly need more acres.

“There are some (processors) that are offering different contracts where they can fix the basis right now — anywhere from $10 to $15 (per tonne) over, I believe, is what I have heard recently.”

Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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