Canola farmers look to cut costs

SASKATOON Canola farmers in Canada, the world’s top grower of the crop used to make cooking oil, are adjusting to a new reality with the absence of their largest customer by working to cut costs and improve efficiency.

The country’s canola supplies have been shunned by China amid a trade dispute. As a result, Canadian growers have dealt with falling demand, rising inventories and lower prices. The dispute was top of mind for attendees of the annual Grain World conference in Saskatoon this week.

“This might be the new normal,” Merlis Wiebe, a grains, oilseeds and dairy farmer on 7,000 acres (2,833 hectares) in Osler, Sask., said in an interview at the conference.

When China first banned imports from two major Canadian suppliers in March, Wiebe didn’t change his planting plans. Instead, he looked at how he could reduce input costs and make his operation more efficient, a plan he’s sticking with next year, he said.

There was concern from the Canadian agriculture community that China would also target other commodities. But trade for other grains and oilseeds has been mostly smooth, said Ivy Li, an independent market analyst from Beijing.

“There’s no issue except with canola,” Li said at the conference. Exports for crops including peas, barley and soybeans faced hiccups earlier this year as some private Chinese companies were wary of applying for imports. But since June, “all this trading has been increasing,” she said.

Canada’s canola exports in the 2019-20 season fell about 9.5 per cent from a year earlier as of Nov. 24, data from the Canadian Grain Commission show. The decline is smaller than some had feared. European countries are importing more of the crop for biofuel use, and shipments have also picked up to the Middle East.

There have also been some recent signs of progress in Chinese-canadian relations. In September, Canada appointed a new ambassador to China, and on Nov. 5 China restored access for Canadian meat imports.