April 30, 2012 / 7:53 PM / 6 years ago

Canada may find canola too much of a good thing

WINNIPEG, Manitoba (Reuters) - Western Canada’s farmers might be getting too much of a good thing by planting canola more often than usual to satisfy voracious demand for the oilseed, which is used to make vegetable oil and livestock meal.

A canola crop used for making cooking oil sits in full bloom on the Canadian prairies near Fort Macleod, Alberta, July 11, 2011. REUTERS/Todd Korol

Canadian farmers are expected to plant a record-large area to canola for the sixth straight year, snatching acres from cereals and legumes out of their usual rotations.

Planting canola too often allows disease-causing microorganisms to build immunity to resistant crop varieties, while also cutting production yields an average 15 percent by some estimates for the second of consecutive plantings.

“Nobody can argue that there is no risk,” said Murray Hartman, oilseed specialist for the Alberta government. “(Farmers) seem to put more emphasis on short term and less emphasis on long term.”

Crop specialists urge farmers to plant canola only once every four years, but many are more aggressive and some are even planting the oilseed in consecutive years.

(Graphic on canola, wheat acres and prices:

link.reuters.com/hyq87s)

Over time, lower yields would slow steadily rising production in the No. 1 grower of canola/rapeseed, leaving world vegetable oil market demand unsatisfied. Disease can also affect trade conditions, with China already restricting Canadian canola imports over fungus concerns.

The trend is similar to the love affair farmers have with corn in the U.S. Midwest, where planting in consecutive years has become more common leading up to this spring’s biggest corn area since 1944.

In Iowa, the top corn state, 34 percent of 2010 corn acres were planted again to corn in 2011, according to Thomson Reuters Lanworth data, as farmers chased high prices.

After giving his land a two-year breather from canola, Saskatchewan farmer Tim Wiens is sowing the oilseed again this spring, cashing in on the highest prices in almost four years.

“Price really pulls a lot of acres,” said Wiens, who will plant one-third of his 2,000 acres to canola in west-central Saskatchewan, where dry conditions mitigate disease risk. “The rotations are definitely tightening up.”

CRUSHERS DRIVING UP DEMAND

A mix of homegrown and overseas demand has driven the canola-planting frenzy, with expansions of Canadian crush plants in recent years by Cargill Inc, Richardson International Limited and Louis Dreyfus, and others planned by Archer Daniels Midland and Bunge Ltd.

Many of the same companies, along with Viterra, also export canola seed to Japan and Mexico.

According to crop insurance data, farmers in the robust canola area stretching from northwest to southeast Saskatchewan chose to take only a one-year break from canola more often than other choices in 2010 and 2009.

The recommended four-year rotation has not been the most popular option since 2008.

“Fifty percent are listening, but the other 50 percent are taking chances,” said Venkata Vakulabharanam, the government oilseeds specialist in Saskatchewan, the top canola-growing province.

In Alberta’s Peace region, farmers in 2009 overwhelmingly chose to grow the crop consecutive years or with just a one-year break over a two- or three-year break, according to a study by oilseed specialist Hartman, based on crop insurance data.

Growing canola in consecutive years in the region resulted in 18 percent lower yields than canola grown after a one- or two-year break, according to data from 2004-09.

Frequent plantings of a crop variety that is engineered to resist a certain disease, like blackleg, is a recipe for building up the disease itself as surviving microorganisms become dominant, Hartman said.

Farmers may ultimately fork over some of today’s profits to pay for tomorrow’s consequences, as stronger disease-causing microorganisms force seed companies to retool crop varieties and farmers to apply chemical sprays, Hartman said.

Some farmers have already learned the hard way.

Growing canola too much helped spread clubroot, a root-attacking disease that infected thousands of acres over the past decade.

In some areas of Alberta, local governments ordered farmers not to grow canola for between three and six years.

Even with yield losses, many farmers are pushing their luck with canola fetching roughly double the price of wheat.

“Canola is No. 1 and it takes a lot to even get close to that (return),” said Saskatchewan farmer Wiens.

Reporting by Rod Nickel in Winnipeg; Editing by Marguerita Choy

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