Mid South Canola Program
Winter canola’s potential in the Mid South gets us excited! Why? First, its agronomics fit the region as a good winter crop following corn and before beans. Second, winter canola fits the changing global trend as consumers increasingly consume more protein and fat in their diet. Finally, canola’s fit with long term trends in consumer demand and its benefits to producers give it staying power.
Interested in producing canola? Learn all of the important details that go into the planting, harvesting, and marketing of this unique oilseed right here on this website
What is canola?
Canola is an oilseed crop, similar to soybeans, sunflowers, and flax. Today, canola and rapeseed grown in Europe are used interchangeably in food and feed applications. Canadian farmers plant canola in the spring for fall harvest. Whereas in Europe, rapeseed is a winter crop, planted in the fall for spring/summer cutting. Mid South canola is a winter crop too, allowing for double cropping opportunities after an early June harvest. This harvest date lands a few months ahead of Canada, allowing it to fill the gap at the end of the Canadian marketing season. Canola contains about 40% oil, double what’s found in soybeans. Processors extract the oil for food or biodiesel use and market the remaining mid-protein meal (32% protein vs soybean meal @ 48%) for use in animal feed, especially dairy feed.
What kind of price can I receive?
A good way to think about canola value is to consider a competing crop, soybeans. A canola bushel measures 50 lbs while a soybean bushel weighs 60 lbs. Both contain oil and meal that are priced similarly. Generally speaking, thinking about canola as 5/6th of the value of soybeans is a good rule of thumb. Since ADM began quoting canola prices in Memphis (late 2016), cash prices have ranged from ~$10.50-$11.00. During the same time, beans traded from ~$8.20-$10.50. Those prices are pretty close to the 5/6th rule of thumb. In a market driven by good oil prices, canola shines. If protein meal is the driver, soy outperforms.
Is canola a specialty crop?
While new to this area, canola (and rapeseed) is a serious oilseed crop. With 86 million acres planted globally, it covers the 2nd most area of any oilseed behind soybeans. It’s responsible for 13% of global vegetable oil production, behind only palm and soybeans. Nearly half of the acres planted reside in the EU and Canada, who each plant ~20 million acres. China, Australia and other regions raise the remaining acres. In the USA, North Dakota sows 1.5 million of the country’s ~2.0 million annual acres.
How is the price determined?
Canola futures trade on the ICE Winnipeg exchange. This contract transacts in Canadian dollars per metric tonne. Additionally, rapeseed futures trade in France on the Matif exchange in Euros per metric tonne. These two contracts provide a foundation for price discovery. One thing that makes canola more challenging to market is liquidity. The ICE exchange routinely transacts about 12,000 canola contracts daily, each representing 25 tonnes (882 bushels). Contrast that with 150,000 soybean futures trading daily on the CME at 5,000 bushels each. That adds up to 50X+ more volume trading in soybean futures than canola. Because of this, forward contracting, especially next year’s crop, takes patience and persistence.
In a market like the Mid South, we derive the price by finding the best cash market and deducting freight costs to get there. Normally, our crop travels by rail to Ontario, Canada to the ADM processing plant in Windsor, just across the border from Detroit. However, we look forward to opening up other markets in Europe or at US processing plants in the future.
Is the market growing?
Demand for canola oil and meal enjoys growth similar to soybean product demand. Whereas the US imports 80% of its canola oil, the US exports 50% of our soybean and wheat production, and 15% of our corn. That makes the US canola market intriguing, and a rare opportunity to increase production without relying on exports.
Is canola GMO?
It can be, but not always. Much of Canadian production is GMO, but EU rapeseed production is not. The varieties of winter canola ADM buys in the Mid South are NGMO. NGMO canola has the potential to become a premium crop, but also GM canola in a double crop rotation can become a weed in soybeans. Conventional NGMO is controlled with normal soybean herbicides. For these reasons, ADM Mid South buys NGMO canola exclusively.
Winter canola agronomics fit the region. Planted in late September through early October, winter canola provides good winter cover. Currently available varieties withstand cold temps below 10F without damage when seeded properly. Spring green up provides a good canopy to outcompete weeds. Harvest time occurs in early June and is earlier than traditional wheat harvest. This spreads out farm labor and allows more time to get in double crop beans. This early harvest could be why University of Kentucky studies show soybean yields 2-7 bu/acre better when planted behind canola vs winter wheat. Canola needs a rotation for its own disease and weed control…but it works in a well thought out crop rotation.
Current winter canola prices deliver good value to producers. With recent prices ranging from $7.30-$8.50/bu as of this writing (May 2018), and yield expectations in the 40-60 bu/acre range, top line revenue compares to wheat. When you consider the yield gain on your double crop soybeans, winter canola shines! Even considering higher fertilizer (especially nitrogen) requirements, winter canola remains in the hunt for your acreage. It’s also a good diversification tool around weather. We all know a rain at the wrong time makes a mess of wheat quality. Recent years saw plenty of local problems with low test weight and high damage wheat. We expect winter canola quality to be more consistent, and will prove to carry less risk of quality discounts at harvest. Finally, canola prices show little correlation with wheat prices, so it’s a good diversifier of revenue for your farm.
U.S. corn demand growth is slowing and U.S. wheat demand has remained flat for 20 years, but demand for protein and fat from oilseeds like soybeans and canola is growing faster than GDP and population. U.S. canola oil demand tripled in the last 18 years, with the U.S. importing 65% of our needs. Around the globe, middle class growth supports upgrades in diet, meaning higher consumption of meat and fat. This trend supports soybean and canola markets. Switching production acres from wheat with stagnant demand, to canola with robust demand only makes sense. Throw in a growing biodiesel market that uses canola oil as a feedstock, and you are looking at a crop with much better demand prospects than wheat.
At ADM, we want to be a part of winter canola’s regional development. With 7 ADM plants in North America processing canola, we know how to handle it and we know how to market it. We believe in its potential and would be happy to help you get started understanding and producing this promising crop.
Crop Insurance for Winter Canola
There are several options for insuring a fall canola crop. However, if this is something of interest, keep in mind that sales closing dates may vary from other fall seeded crops in your area such as wheat. Multi- Peril Insurance is available if actuarial data is present for your county. However, if no history is present, a Written Agreement can be used to provide opportunity to purchase MPCI. In addition to MPCI, winter canola can be insured through a Whole Farm Revenue Protection Policy.
As always, speak with your crop insurance agent to determine which option will work best for your operation. ADM is proud of an exclusive relationship with Crop Risk Services (CRS). We encourage you to work with a CRS agent to plan your canola coverage.
- Insure with Multi-Peril Crop Insurance if actuarial data is present for your county. This can be verified at the following link: click here. Policy specifics can be found in the crop’s special provisions. In the Mid South region, Tennessee currently is the only state with actuarial data available.
Counties: Coffee, Henry, Lawrence, Robertson, Sumner
Sales Closing: 8/31
Earliest Plant Date: 9/10
Final Plant Date: 10/15
End of Late Plant Period: 10/20
Acreage Reporting Deadline: 1/15
Premium Billing Date: 7/1
End of Insurance: 10/31
Production Reporting Date: 10/15
- If your county does not have actuarial documents for canola, a Written Agreement/ Request for Actuarial Change form can be submitted to RMA, through your crop insurance agent, to request coverage in your area. If your request/ Written Agreement is approved, this will provide you the opportunity to purchase MPCI for that crop in your county. Information needed to complete the request must include:
- A completed Request for Actuarial Change form
- The current year’s completed APH
- If the producer has not produced the requested crop in the county, the producer must either sign a statement to that effect or provide an APH containing the requested crop showing zero acres and production with the corresponding crop years
- Evidence of adaptability for the crop from an ag expert, check with RMA
- FSA Farm/track and field numbers where the crop will be grown
- Current FSA aerial photographs
- Dates the crop will be planted and harvested
- For any water source, the water source, method of irrigation and the amount of water needed
- Three years of production records of the requested crop or a similar crop. Similar crops, include but are not limited to, wheat, barley, rye, and oats.
Note: Please send your request in early.
- Insure with a Whole Farm Revenue Protection Policy. WFRP allows you to insure all commodities grown on your farm within a single revenue based policy.
Canola Harvest Logistics
When planning the crops to incorporate in your rotation, you don’t want to put something in the ground that you don’t know how to get out. Knowing some of the logistics of harvesting a crop before planting it can help you better plan your operation.
As a winter crop, canola is typically harvested in early June. One week prior to harvesting, desiccation is necessary to dry down the crop and prepare it for removal from the field. While canola can be harvested with various types of combine heads, it is important to be aware of its small size to avoid potential loss of seeds through gaps in equipment. Adding to its appeal is the fact that, due to its hollow stalk, it is often easier to get through than wheat.
As always, ADM Mid South is happy to answer any questions you have about canola. We look forward to working with you.
How is Canola Marketed?
Having an idea of how canola is marketed is important before you put a crop in the ground. ADM understands that farmers want to know how the cash price is calculated, what forces are affecting the market, and how to put together a forward-thinking marketing plan.
Unlike corn and soybeans, canola futures are traded on the Canadian exchange. ADM calculates the cash price for canola by using the exchange rate and factoring in our location in the Mid South. Although canola is an oilseed like soybeans, soybean prices are not used to calculate the price you will receive for canola.
If you are interested in growing this revenue-diversifying crop, or would like to talk about the current canola market, please call ADM Mid South at (870) 739-1380. Much like how ADM works with you to create a well thought out plan for your traditional crops, we look forward to partnering with you to develop a canola plan that works for you.
Preparing to Plant Canola: Choosing the Best Environment
The soil conditions in the Mid South are well suited for growing winter canola, but it is still important to make an educated decision about the best planting environment. Like wheat, canola performs best in fields that are well-drained. Since canola is often used in place of winter wheat in a rotation, it can usually be grown in fields where wheat would be planted. In order for canola to establish its roots fully underground, it is beneficial to plant into a clean seed bed. The most productive fields in the Mid South this past growing seasons were those that were passed over with a Landoll twice before planting.
Here are the numbers to know when planting canola:
- Seeding rate: 120,000 seeds/acre
- Row spacing: 15-30 inches
- Planting depth: ¾ – 1 inch in normal conditions
- Planting dates: September 15-October 15
As always, if you have any questions or are interested in adding canola to your rotation, please contact the ADM Mid South office.
Preparing to Plant Canola: Seed Selection
If you’ve been following the ADM Mid South Canola Communications, you know the facts: canola is a great source of diversified revenue for your farm, it is excellent for soil health, and works well in a rotation in place of wheat. Now, it’s time to buy your seed.
ADM Mid South is happy to connect you with an experienced canola agronomist who will assist you in choosing a seed variety and getting it to your local farm store or seed retailer. Please remember to purchase seeds that have not been genetically modified. As always, ADM Mid South is happy to answer any questions.
Preparing to Plant Canola: Spraying History
When you put a crop in the ground, you want to know that you are giving it the best chance to succeed. With ADM, your canola success story begins before planting, when we help connect you to seed resources and make a plan for the growing season. But before looking forward, it is important to look back. Canola does best if it avoids certain chemical residues from previous crops, so be sure to evaluate your previous spraying history before planting your canola between September 15 and October 15.
- Examine your previous application history
- Ensure your applicants were not pre-mixed with harmful products
- Check with an agronomist if you have any questions
- Use Prefix®
- Use Reflex®
- Use Flexstar®
- Use generic equivalents of the above products
Please note that the applications listed above are not a complete list. To check if a specific product is safe for canola, please contact the ADM Mid South office at (870) 739-1380. We would be happy to partner with you in your canola success story.
Agronomic Benefits of Canola
Due to its favorable location and climate, the Mid South allows a variety of crops to thrive, and canola is no exception. When incorporated into a rotation cycle, canola fulfills the traditional benefits of crop rotation, while also bringing unique benefits to the land that lasts long after harvest.
Planting canola helps break pest and disease cycles and produces healthier, better-yielding plants throughout your rotation. Over the winter, canola acts as an excellent cover, and spring green-up provides a good canopy to out-compete weeds. In addition, its plant structure includes a 4-5 foot deep root system. This biomass increases your soil organic matter, contributing to long-term soil health. Consequentially, soybean yields increase by 2-7 bu/acre when planted after canola.
All these benefits stand to prove that canola has year-round benefits that persist long after it has been taken out of the field.
Typical Canola Rotation
As an alternative to winter wheat, canola fits perfectly into a three crop rotation. Due to their growing seasons, corn, canola, and soybeans can be grown in succession with enough time to comfortably harvest one crop and plant the next.
A typical rotation including canola in the Mid South starts with corn, which is planted in late April and harvested in late August – early September. Canola planting follows between September 15th and October 15th. While canola is typically grown in place of winter wheat, its harvest window is during the last half of May. Since this is a few weeks earlier than wheat harvest, farm labor benefits from being spread out. Harvest typically finishes in late May, just in time for soybean planting in June.
Adding canola to your rotation serves to diversify the sources of farm revenue, reduce strain on labor resources, and produce three marketable crops in a short period of time. The Mid South region is perfectly suited for growing canola, and we hope you will consider incorporating this crop when planning out your rotation.
Diversifying Your Revenue with Canola
ADM understands that farmers benefit from diversifying their operations. That’s why we at the ADM Mid South office are diversifying with you by now offering a winter canola marketing program. Here are three reasons to diversify farm revenue with canola:
- Canola is in high demand
An increasingly wealthy world population desires healthier protein and fat sources. As a source of low trans-fat oil for humans and high protein meal for animals, canola checks these boxes.
- Canola has a consistent quality
Average canola yields are 40-60 bushels/acre and carry a lower risk of quality discounts than some other crops.
- Canola prices show little correlation with wheat prices
As an alternative to winter wheat, the low correlation between wheat and canola prices means an added element of risk management for your operation’s financial health.
More than being a beautiful crop with agronomic benefits, canola makes sense financially. If you are interested in learning more about the benefits of adding winter canola to your crop rotation, or would like to see how canola plays out in a budget when compared to winter wheat, please contact the ADM Mid South office at (870) 739-1380.
Finding the Right Planter Plates
Download the file below to find a list of planter plates by dealer. Don’t see the one you are looking for? Contact an ADM representative.Download Planter Plates PDF
Contact ADM Mid South
If you are interested in learning more about the benefits of adding winter canola to your crop rotation, or would like to see how canola plays out in a budget when compared to winter wheat, please contact the ADM Mid South office at (870) 739-1380.