February 6, 2012

US 2012 rapeseed acreage, production to rise

As planned acreage and production is set to increase, US rapeseed growers are anticipating a good season, according to an industry participant.

Barry Coleman, executive director with the US Northern Canola Growers Association in Bismarck, North Dakota said farmers are expected to plant between 1.1-1.3 million acres of rapeseed in North Dakota alone. That would account for most of the projected 1.5 million acres of US rapeseed that will be seeded this spring, he said. The jump in seeded area will reflect the reclaiming of lost acres due to flooding in 2011, he said.

In 2011, only 860,000 acres of rapeseed were planted in North Dakota, pushing down 2011's total US rapeseed acreage to 1.07 million, Coleman said.

Strong domestic crusher demand along with firm cash bids, and strength in the outside commodity markets, are making rapeseed a more attractive option for US farmers to grow, Coleman said.

With more acres expected, rapeseed production will also increase. Production is pegged in the US at 1.1 million tonnes, with one million tonnes coming from North Dakota alone, he said. North Dakota last year produced only 620,000 tonnes of rapeseed, Coleman said.

The majority of the demand for rapeseed will come from within the US, Coleman said. Domestic crushers, including ADM, Bunge, and a new plant being built in north eastern North Dakota, will absorb most of the US rapeseed output, he said.

With demand from the domestic crushing sector remaining firm, Coleman sees new opportunities to move cash bids upward. Strong demand for biodiesel in the US, will help enhance the upward price potential, along with the rising use of specialty rapeseed, including Nexera, he said. Increased Chinese buying of Canadian rapeseed for meal and oil use would help add to the firmness in US values, he said.

Bids currently for US rapeseed range from US$11.81 a bushel to US$12.49 a bushel in North Dakota, according to data from Prairie Ag Hotwire.