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Canola prices the big story on the ag front

“It’s one of those things the price is up there for a reason and more often than not it’s because nobody has any of it."
LAKELAND - Canola prices have reached some unprecedented levels in recent months driven by low supplies and high demand, according to the Alberta Canola Producers Commission.

“The price is very, very strong. This past winter we seen prices that we have never ever seen before for canola,” general manager Ward Toma said Friday, describing it as the “big story” on the agricultural front as farmers look to head into the fields for spring seeding.

On April 16, the price per bushel was hovering around the $17.64 in northern Alberta, compared to an early 2020 price of about $10 a bushel. Canola bins have been emptied across the prairies as farmers look to take advantage of the buoyant market. While prices

“Strong demand from some of our long-term buyers and some parts of the prairies were a bit short and the crop wasn’t as big as some folks had hoped and that helped a little bit,” he said.

With a supply of competing products in the vegetable oil sector also down, it served to boost canola prices up significantly, he said.

China has historically purchased a lot of Canadian canola and was back in the market for the crop in a big way in late 2020 following a 2019 move that saw China banning shipments of canola seed from two main Canadian exporters – Richardson and Viterra – which continues. It is estimated between March 2019 and August 2020, the Canadian canola industry lost anywhere between $1.54 billion and $2.35 billion due to lost sales and lower prices.

“China buys a lot all the time so that demand is consistent,” Toma said. “It’s been very consistent in the past decade at least and they really came to the market for products this past winter and they do that in cycles. They are a state buyer, they fill up the bins so to speak, let it run down and then come back to the market – I think that might have been something to do with it this time.”

He said there’s a little bit of crop envy from the producers that didn’t get a good canola crop off in the 2020 harvest or sold their canola seed at a much lower rate prior to the price surge. However, for those that did have canola in the bins, and who weren’t locked into price contracts, they’ve moved their canola to market in a hurry in recent months.

“It’s one of those things the price is up there for a reason and more often than not it’s because nobody has any of it. But some farmers are able to take advantage and that’s going to be good for them.”

“It’s returned to its position as a cinderella crop at this point,” County of St. Paul Reeve Steve Upham said, adding he expects to see a lot of canola seeded again this year in the county, especially by those producers who have been able to position themselves in the mid $14 a bushel range over the last month for November delivery contracts.

As far as spring seeding is concerned, the ground has dried up quickly.                          

“We are in a situation where we were looking forward to a spring that would be a little dryer so we could get some of those wet spots dried up and generally correct our seeding season so we’re not pushed into the back end of May and early June for seeding,” Upham said. “But now we’ve gone past that point and there’s becoming a bit of concern over pastures, hay land and also crop land that’s potentially going to be too dry. We’ve had this before and hopefully we’ll get some good rains in May and maybe some wet snow at the end of April beginning of May and replenish the top a little bit.”