New demand for canola oil is driving a wave of expansion in canola processing capacity, and along with it, there’s going to be a large increase in the supply of the main byproduct — canola meal.
The amount of canola processed in Western Canada is expected to grow by around 50 per cent in two to three years, with construction underway on new and expanded facilities in Saskatchewan that are expected to boost Canadian crush capacity by 5.7 million tonnes to around 16.8 million tonnes annually.
One of the big questions surrounding the growth in domestic canola processing capacity is: where’s all the additional meal going to go?
While the U.S. is by far the largest market for canola meal from Canada, importing 3.4 million tonnes in 2021, the answer to the above question likely involves dairy and fish production in Asia.
“We know canola meal is a great fit for dairy, and there’s the dairy industry in China that we’re largely not tapped into yet. And so I think that’s the first place to go. There are other countries in southeast Asia — Thailand, Vietnam, Philippines, Indonesia — that all have growing feed markets that are a great fit also for canola meal,” explains Brittany Wood, director of canola utilization with the Canola Council of Canada, in this new Canola School episode (article continues below).
While canola meal’s amino acid profile is well-suited for feeding to dairy cows, a large portion of Canada’s current exports of around 1.6 million tonnes to China go into aquaculture, to feed species such as carp and tilapia. “And we see those markets growing as well,” she says.
The U.S. — mainly California — will remain an important market, but canola meal exports from Canada to the south are projected to remain flat, as the supply of soybean meal as a competing protein ingredient will also be rising with construction underway on the new soybean crush facilities, notes Wood. While canola meal supplies are forecast to grow by at least 3 million tonnes per year, soymeal supplies in the U.S. — with soybeans having a higher meal-to-oil ratio than canola — are expected to grow by at least 12 million tonnes.
As for demand closer to home, Wood is optimistic Canadian canola meal consumption will climb from the 556 thousand tonne mark in 2021, including in plant-based protein food products.
There’s also the possibility of increased utilization in dairy rations with policy-makers focused on reducing methane emissions. New research has shown a reduction in methane output from dairy cows fed higher rates of canola meal, she notes.
Overall, competition from soybean meal will be strong, but Wood says the demand scenario for all the additional canola meal coming onto the market should be viewed as a good news story for the crop.
Check out the Canola School video above, recorded at Canola Week in Saskatoon, Sask, for more with Brittany Wood on future demand for Canadian canola meal.