NE- 165 Case Study : CANOLA AS AN EMERGING INDUSTRY: A Processor and Producer Perspective

The canola industry in the United States has been very small with a limited canola oil demand being met through imports. However, an apparent increase in consumer demand for more healthful alternatives to traditional vegetable oils has sparked an interest among domestic processors desiring to be among the first entrants to a U.S. canola oil market. Processor interest has in turn led to some producer experimentation with the crop. This case study documents the early activities of U.S. Canola Processors (USCP), one of two companies processing the U.S. crop, and Ralph King, a Central Illinois canola producer. USCP, a joint venture of Central Soya and Calgene, describes their role in terms of "building an industry," according to General Manager Larry Horn. The company actively participated in amending the 1990 Farm Bill which permitted producers to plant some canola without risking their wheat or corn bases. Also, USCP is pursuing the establishment of U.S. grain inspection standards for canola. Company representatives are holding farmer meetings and elevator training as a means of promoting the crop. The goal for USCP is to establish an infrastructure that would permit the company to secure adequate supplies of canola for their processing needs. Ralph King, an Illinois farmer, had a positive experience with canola the first production season and plans to continue experimenting with the crop. Despite his positive production experience, other producers have been less enthusiastic about canola's production season, volunteer plant problems, questionable suitability of canola varieties to specific geographic areas, and a volatile market situation.