Cargill expands canola innovation for better oils

28-Aug-2008 - Last updated on 29-Aug-2008 at 11:40 GMT

Agricultural and ingredients giant Cargill has given an extra push to its canola presence with the formal opening of its expanded Specialty Canola Innovation Center in Fort Collins, USA.

The centre is home to an expanded greenhouse and technology lab, which the firm says will allow it to develop new oil traits for food manufacturers in a “faster, more cost-effective manner”.

Canola oil is increasingly used in bakery products and in other food applications, driven by consumer demand for trans fat-free oils.

Cargill already has a significant stake in the canola industry, and has been ramping up its activities over the past few years. Jenny Verner, president of Cargill Specialty Canola Oils said the expanded innovation center will allow the firm to work better with customers and growers alike.

Cargill’s canola

So far in response to demand in the ingredients sector, the company has added two new products to its Clear Valley line canola - a doughnut shortening and an icing shortening. It has also changed the brand name of its TransEnd all-purpose shortening to include this product under the Clear Valley umbrella.

At the end of last year, Cargill also offered a number of incentives to canola growers, in an effort to help secure the coming season’s crop and maintain a continuous supply of the oil. These included a "risk free price hedge" on the first 10 bushels an acre of production, and the opportunity to establish a prime basis that can provide more than $11 a bushel to many growers and a significantly higher per acre return above commodity canola.

Cargill also announced last year that it would build a second canola processing plant in Canada in a move to meet growing demand. The new plant, located adjacent to Cargill's existing operation in Clavet, Saskatchewan, is expected to double the firm's oilseed processing capacity to 1.5m tons annually.

The firm’s new research and production centre for specialty canola oils, also located in Clavet, is due to open in November, and is expected to centralize its hybrid breeding program in the heart of the commercial production region.

The site has been used for field trials for several years but Cargill said the new centre consolidates its efforts in one place and provides canola growers a single location to see new varieties.

Canola market

Although canola oil has not yet penetrated the food processing segment in the same way as partially hydrogenated soy oil, which has tended to be the preferred option to slash trans fats, there are clear signs that the oil is starting to attract more attention and demand.

High stability canola oil does not require hydrogenation and can be used successfully as a repeat use frying oil. Indeed, the oil's potential to penetrate the food processing sector prompted Canada's Canola Council last year to predict the production of the crop to more than double by 2015, from 9.1 million tons to 15million.

The trade association has started an initiative to reach these production levels over the next eight years.

The three major steps within this initiative are: to capitalize on the rising demand for healthy foods; to focus on innovation as a means to improve quality and better face competition from other oil crops; and to increase yields and invest in research and development in the crop relative to its major competitor, soy.

Rising costs of raw materials across the industry may make this a challenging target.

Statistics Canada reported that the average cost of Canola in October 2007 was CDN$969.64, up from CDN$902.90 in July 2007. In April 2007, it was CDN$819.20, an 18.3 per cent increase in six months.