The rapid expansion in canola processing capacity on the Prairies continues, with the confirmation of another crush plant to be built beside the Canada-U.S. border in southeast Saskatchewan.
Ceres Global Ag is planning to build a canola processing plant and refinery beside its existing terminal and international rail crossing southeast of Estevan, at Northgate, Sask.
The facility, which has an estimated price tag of US$350 million, will have the capacity to process 1.1 million tonnes of canola annually, producing more than 500 thousand tonnes of canola oil each year.
Ceres president and CEO Robert Day, in the interview below, says they’ve considered building a canola processing facility at Northgate for several years due to the competitive advantage of the location on the U.S. border.
“What makes it unique is it’s directly connected to the BNSF railroad, so this will give us an opportunity to originate canola, crush it there, and then the products go outbound on the BNSF railroad directly into the U.S. market or to U.S. ports, and for most of the destinations we’re going to, we would have a significant cost advantage because of the make-up of that location and the direct connection to the BNSF,” he explains.
Day says they see an opportunity for strong canola crush margins in the next five to fifteen years based on increasing demand for renewable diesel feedstock as governments implement policies aimed at reducing carbon emissions. Day says Ceres is in discussions with several major players in the renewable diesel industry in the U.S. about supplying them with large trains via the BNSF network.
Listen to Robert Day, CEO of Ceres, discuss plans for a $350 million canola crush plant at Northgate, Saskatchewan, the unique location of the plant, and the impact of massive growth in canola processing capacity in Saskatchewan:
As with the oil, direct access through the BNSF network will also be an advantage for shipping meal to the dairy feed market and other users in California, New Mexico, and potentially Mexico and Texas, says Day. “There are a lot of interesting destinations there that we can reach directly.”
The crush plant and refinery will be integrated with the existing Ceres elevator and staff at Northgate. Having existing infrastructure, including a 2.7 million bushel elevator and two 120-car loop tracks, will shorten the timeline to complete the project, says Day, noting they plan to be operational by the summer of 2024.
He says Ceres anticipates sourcing two-thirds of its canola for Northgate from Canadian farmers, with one-third coming from farms in North Dakota and Montana, where they expect to see higher canola acres.
Richardson, Viterra, and Cargill have also announced plans over the past two months to build new canola crush capacity in southern Saskatchewan.
Viterra is planning to build a 2.5 million tonne per year plant at Regina. Cargill is planning a new 1 million tonne facility, also at Regina, while Richardson (JRI) is doubling processing capacity to 2.2 million metric tonnes per year at Yorkton. The new facilities are all targeted to be up and running in 2024.
Headquartered in Minneapolis, Minnesota, Ceres has over a dozen grain handling facilities in Saskatchewan, Manitoba, Ontario, and Minnesota.
In Western Canada, Ceres’ assets include the Northgate terminal, the former Cargill elevator at Nicklen Siding, Sask, which was acquired in 2020, and Manitoba-based Delmar Commodities, with its seed business now known as Ceres Global Seeds, acquired in 2019. The company also holds as a 25 per cent stake in Stewart Southern Railway, a short-line railway located in southeast Saskatchewan, and a minority interest in Canterra Seed.
Ceres also owns grain-handling facilities at Port Colborne, Ontario, and Duluth, Minneapolis, and Shakopee, Minnesota.