CANOLA pricing has fluctuated considerably in the last three years after several decades of a much smaller range of values, contributing to challenges for farmers in risk and debt management, decision making on input costs and market access.

In 2020, the global pricing for canola experienced a significant and steep rise, driven by a complex set of factors, with a major contributor being strong demand from various industries, including food, biodiesel, and animal feed.

Canola oil’s reputation as a healthier cooking oil option also bolstered its popularity among consumers - it is considered to be low in saturated fat, high in unsaturated fats - particularly omega-3 and omega-6 fatty acids - and has a neutral flavour.

It also has a high smoke point compared to many other cooking oils, especially vegetable oil, which makes it suitable for high-heat cooking methods such as frying, sautéing, and baking.

Additionally, reduced planting acreage and yield challenges in some key canola-producing regions, such as Canada and Australia, tightened supply, further boosting prices.

However, by mid-2022, the canola market saw a major correction as several factors came into play, including increased production in response to the higher prices of 2020 resulting in a supply surplus and then favourable weather conditions and a reduction in fertiliser costs contributing to larger harvests, adding further pressure on prices.

Additionally, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) recently released its Farm Performance Forecast for 2023-24 with the expectation that after two record years, broadacre farm cash incomes are set to decrease.

“At a national level, average farm cash income for broadacre farms is forecast to decrease 41 per cent to $197,000 per farm in 2023–24,” the report said.

“This decrease is primarily being driven by observed and forecast drier conditions and lower national and global prices of agricultural commodities. While adverse seasonal conditions and prices are driving large decreases in farm financial performance, this is relative to the record highs of 2021–22 and 2022–23.

“Forecast farm incomes and profits for 2023–24 are still expected to be above those observed during recent drought years at a national average level.”

Yulecart farmer, Todd Venning, said canola’s suitability to the south-west was sometimes tougher with its wetter climate conditions but with crop rotation producing “yield benefit for wheat crop afterwards”, his own commitment to extend on his 16 years of growing the plant was firm.

“Especially if you can get a double break in with a legume and canola - the cereal yields are a lot better,” he said.

Canola’s history as a food crop is not that long, with its name effectively being an acronym – ’CAN’ coming from Canada where it was developed, and OLA meaning ‘Oil, low acid’; the variety of rapeseed bred in the 1970s to reduce its erucic acid content from between 30 and 60 per cent - unsuitable for human consumption - to 2 per cent or lower.

With Canada’s vegetable oil consumption being over 50 per cent canola and the USA recording a massive 45 per cent increase in output from 2021 to 2022, the future of this commodity market will be strong, albeit subject to political tensions like any other global commerce for raw materials.

Evidencing this, Mr Venning said the big rise in prices in the last few years was also connected to the Russo-Ukrainian War but wasn’t too concerned about the subsequent reduction last year as they were now more in line with a “long-term trend”.

He said he was also keeping an eye on how the recent failure to keep Australian honeybees free of varroa mite would affect pollination but hoped canola would fare well with a good protein content in the pollen as “it’s great for bees to extend the colony” and he had personally seen the symbiosis of the crop with bees, even if canola generally didn’t do much for the production of good-tasting honey for human consumption.

The development of GPS-guided technology for spraying was something he was grateful for as it made for more efficient resource use and minimised the environmental impact on subsurface drainage; he admitted it was an upgrade from previous laser-guided systems and was “something we couldn’t do without”.

Another aspect of modern technology to Clear Lakes farmer, Lockie Wilson, was how yields have increased using genetics.

“I’d say the biggest driver’s been the breeding,” he said.

“The hybrid breeds … we seem to be getting higher and higher yields out of them and being able to push them harder and harder.”

Mr Wilson added that the ever-improving resistance to chemicals was also a great benefit but also appreciated the way precision agriculture had added to cropping efficiencies with the application of urea especially being one he singled out.

“That certainly allows you to have zones through your paddock and have variable rate application, which makes you put the urea where it’s needed and try and get those high yields,” he said.

Another local canola farmer who did not wish to be named said their crops “were in a pretty good place” with the weather conditions this year initially being far from ideal.

“Considering how wet we were early on, we’ve actually pulled out of it OK,” he said.

The farmer said it wasn’t really a crop they had a preference for – “to be honest, I actually don’t like growing canola” - but it was useful for paddock management.

“The only reason we grow it is for rotation for our soil health,” he said.

“We’ve got too many issues here - frost, water, birds.”

On the subject of technology, he echoed the importance of technology increasing yields and saving on costs.

“My auto steer units for my windrower tractors that I do contracting with are nearly $30,000 a unit,” he said.

“So as a contractor, I can make that money back in fatigue. So I can drive straight, I can take my hands off the wheel for 10 minutes, I can have my drink - whereas if I didn’t have that I’d be fighting myself all day.”

With the bright yellow of canola fields set to remain part of the scenery around Hamilton and prices seeming to now settle into less variability despite a potential dry season approaching after a wet winter, local farmers are constantly learning how to leverage the crop despite its vulnerability to supply-demand imbalances and external economic factors.