Poppin’ Aussies

Australia achieved an enviable increase in canola production over the past three years.

After paltry crops of 2.3 million tonnes in 2018 and 2019, Australian canola output jumped to 4.8 million in 2020 and 6.8 million in 2021, according to USDA Foreign Agriculture Service data posted at PSD Online. The PSD Online forecast for 2022 is about the same, at 6.7 million. That means Australian canola production almost tripled from 2019 to 2021 and then stayed at that high level for 2022. That is the threshold leap we’ve been hoping for in Canada.

Yet in Canada, canola production peaked at 21.5 million tonnes in 2017 and hasn’t returned. Statistics Canada September outlook pegs the 2022 crop at 19.1 million. These are big numbers compared to Australia but Australia’s are going up, not down.

The reasons: more canola and more rain.

Australian farmers planted a lot more canola in response to higher prices. The country harvested around five million acres of canola in 2018 and again in 2019. That increased to 6.5 million in 2020, 7.9 million in 2021 and 8.9 million in 2022, according to PSD Online data.

Katrina and David Goodear farm between the towns Merriwa and Cassilis in New South Wales, about 300 km north of Sydney. They raise cattle and sheep and grow canola, wheat, barley and fodder oats.

“In our experience, the main reason for the massive growth in Australian canola production in the last two years is pricing,” they wrote in an email. “That is to say the dollars per hectare we yield make canola a more profitable crop.”

In the years before 2021, the Goodears would plant around 250 acres of canola. They planted 350 acres in 2021 and 670 in 2022.

As a bonus, Australia – generally drier than Canada – got the rain to support yields. Yields in 2018 and 2019 were around 20 bu./ac., below the decade average of 23 bu./ac. Yields zoomed to 32.5 bu./ac. in 2020 and kept zooming to 37.5 bu./ac. in 2021. As the USDA Foreign Agriculture Service reported, “Unusually, despite the diverse area in which canola is grown in Australia, nearly all regions had particularly good growing conditions throughout the season, which supported an extraordinary high average yield.”

While Australians obviously hope the weather trend continues, Nick Goddard, executive officer of the Australian Oilseeds Federation, expects canola seeded area to drop back down “as wheat, barley and canola prices return to more typical relatives” and while input costs, like nitrogen, remain high. “The gross margin for growers is not as attractive as before,” Goddard says, adding, “We have also pushed canola rotations pretty much to the limit so it would also be prudent for growers to wind back their canola rotations a bit.”

The Goodears agree: “We do not expect to add more canola hectares in the future.”

Interestingly, the USDA Foreign Agriculture Service expected the drop in canola area in Australia to occur in 2022. “Although soil moisture conditions in the canola growing regions are generally good and prices are very high in the lead up to sowing, there is an expectation that there will be a reduction in planted area,” its staff wrote in an April 2022 report. “This is due to farmers having less suitable area available in their crop rotations for canola after the previous two years of big planted area.”

Yet Australian farmers responded the following month with an unexpected increase in acres. (Australians grow most of their cash crops in the winter, which overlaps with Canada’s growing season.) Could Australia be setting a new threshold in canola acres and production? Market demand for oilseeds would certainly support this. That is why Canada’s canola industry set the 26-million-tonne target.

So how does Canada make its production pop so we can keep up with demand?

Agronomy can reduce input costs per bushel and set the table for better yields, but the big factor is weather. There is no secret formula. Australian farmers achieved best-ever canola yields the past three years because of good growing conditions across its canola belt. Canada has the genetics, the agronomy and the farmer knowledge for better yields. With a Prairies-wide improvement in the weather cycle, Canada could finally experience the pop we’ve been expecting.