Reports / Study and Business Tours / Australian Study Tour 2012

Study Tour 2012

Canola production study tour to Australia

22 September tot 9 October 2012



Dr Jos de Kock inspecting Australian canola fields and koala bear entrance

  1. Acknowledgements

    Appreciation and gratitude to the PRF Council for support and funds made available to facilitate this tour, particularly Mr GJH Scholtemeijer (Chairman) who instigated the initiative.

    We thank our spouses and families for support and care.

    We thank our Heavenly Father without whom nothing would be possible.


  2. Introduction

    The Board approved the visit to Australia, by Mr JSG Joubert and Dr J de Kock, aimed at five aspects that focussed on the economic and general management of canola cultivation and the canola industry.

    1. Obtain information regarding the methodology to calculate the benefits of canola in a rotational crop system.
    2. Obtain information about the methodology by which income and cost budgets of farming enterprises are calculated.
    3. Obtain information about the economics of genetically modified (GM) canola cultivars versus conventional canola cultivars (including hybrids for both types) and determine the important factors.
    4. Obtain information about speciality canola, particularly Juncea canola from Viterra (company).
    5. Obtain information about current and future trends in terms of canola breeding from different companies such as:
      • Canola Breeders Western Australia (CBWA)
      • Pacific Seed
      • Nuseed
      • Pioneer
      • Viterra

      Programme attached (see Annexure 10.1: Study Tour Programmme and Contact List).


  3. General

    The tour started with a visit to the Department of Agriculture and Food, Western Australia (DAFWA). The following persons provided information about canola cultivation in Western Australia:

    • Dr Mark Sweetingham – Director
    • Mr Paul Carmody – Agronomist / Information Officer
    • Dr Rosalie McCawley – Executive management, particularly involved in the promotion of GM canola
    • Mr Chis Carter – Economist
    • Mr Rod Birch – Farmer, North of Perth

    At all the visiting points, Mr Joubert briefly explained the background of the PRF and the objectives of the study tour.

    DAFWA presented a real time TV interview broadcasted nationally in Australia, but with direct links to Canada (Webanair).

    Various speakers discussed different subjects, such as stocks and prices (supply and demand factors). Much of the information is similar to the information supplied by Oil World. The information covered a large number of crops such as canola, peas (field peas and green peas), pigeon peas, lentils, faba beans, lupines and others. The Webanair interview involved many people. Inputs from Perth was tendered by the Pulse Development Manager (Alan Meldrum), the Chairman (Jon Slee) of Grain Industry Association of Western Australia (GIWA). Jon Slee is also the Marketing Director of AUS-OILS. Input from Sydney was provided by Nick Goddard of the Australian Oilseeds Federation (AOF), while various other people, also from Canada provided inputs.

    GIWA is very similar to Grain South Africa (GSA). The main objectives are to:

    • Provide a powerful voice for a Western Australian Grain Industry Supply Chain
    • Receive and communicate important information
    • Address common industry issues
    • Consolidate resources in a more viable unit
    • Maintain important crop focus and national links
    • Provide a new focus for wheat
    • Provide a forum for industry self regulation

    The 2010/2011 – GIWA Annual Report contains more information and is available for perusal at the PRF offices.

    Dr Mark Sweetingham (Director: DAFWA) highlighted that Western Australia stillproduces sweet lupines at significant levels. According to expectations producers will produce about 400 000 tonnes L. angustifolius and 35 000 tonnes L. albus in 2012. DAFWA still has an active breeding programme and would like to liaise with an institution in South Africa to market lupine cultivars. We provided information about Dr N Kotze of Agricol and Dr Sweetingham will follow up on the matter. DAFWA is convinced that lupines and canola in the correct ratios constitute the best animal feed mixture.

    1. Cultivation aspects

      1. Cultivar evaluation

        Mr Alan Bedggood is the General Manager of the National Cultivar Evaluation Trials in Australia.

        The evaluation programme consists of, inter alia, ten winter grain crops (wheat, barley, oats, triticale, canola, pigeon peas, faba beans, dried peas, lentils and lupines). The programme conducts 650 trials at 310 different venues. Only a few government research centres are used.

        The GRDC funds the project and it is controlled by a National Advisory Committee comprised as follows:

        Producers = 3
        Advisers = 3
        Contractors = 1 per area
        GRDC = 1
        General Manager = 1

        The information is available in reports and is used mainly by advisers and consultants.

        Temperature monitors are available at all venues and temperatures are recorded every 15 minutes. The programme uses the data purely to indicate frost damage. However, the data is available for researchers for more intensive use. Only trials with a coefficient variation (CV) of 20% and less are used.

        Based on the large number of canola cultivars, the cultivars are tested in separate trials, namely:

        TT group = 36 entries
        RR group = 25-28 entries
        Clearfield group = 20 entries
        Conventional group = 15 entries

        Although all the trials are done at the different venues, they lose value based on the approach, because groups cannot be compared statistically. According to Bedggood, South-Africa's approach is to evaluate all cultivars in one block design per venue. He says it is a more correct approach, especially because we have very few cultivars. Previously they conducted the trials in a similar way.

        A cultivar remains in the trials, provided that 3% or more of the cultivar is grown. We visited some of the cultivar trials in the company of Trent Potter, from Adelaide to Bordertown to Naracoorte to Horsham.


      2. Black leg

        Although all released cultivars are tested for black leg (Leptosphaeria maculans) tolerance and indicated as such, it is essential to follow a crop rotation programme. In Australia a comprehensive brochure is available to inform producers about the management of black leg.

        Cultivar resistance is established through various genes. It means that cultivars are divided into groups, from A to G, depending on the resistance levels. For example, Hyola 50 is in group D and Garnet in group ABC, while Hyola 555TT was classified in group E. The recommendation is not only to plant canola only one in three years on the same land, but also to plant a cultivar from another group. If a cultivar in group A was planted, it is recommended to replant using a cultivar from another group, such as group D.

        The local canola industry should investigate the possibility to prepare a similar brochure containing similar information for producers. The brochure, "Blackleg Management Guide", is attached as an Annexure to this report (see Annexure 11.2: Blackleg Management Guide).


      3. Sundries

        Canola grazing was investigated by various researchers, such as JA Kirkegaard of CSIRO in Melbourne. Currently Trent Potter is also working on a trial at Naracoorte (Southern Australia). They found that canola may be used as grazing under high potential conditions, without any serious disadvantages to the grain yield. Under low potential conditions in Western Australia, grazing is not recommended. Based on minimum tillage required for their type of soil, they do not experience significant problems due to soil compaction if land is used for sheep grazing.

        In conditions where they use minimum tillage (about 90% in Western Australia) they apply lime in large quantities on top of the soil, having found that the lime does settle into the top layers, to about 20cm deep, over a period of five years. Phosphate, potassium and sulphur are placed under the seed using a pen planter.

        In Australia canola is not often grown under irrigation and as such, cultivars are not developed for irrigation specifically. They expect that cultivars Stingray and Hyola 50 would do well under irrigation in South Africa.


  4. Economic benefits of canola in a rotational crop system

    At Cunderdin (North East of Perth) West Australia the No-tillage Farmers Association (WANTFA) conducts trials.

    Dr David Minkey and Matt McGee are controlling the trials in terms of crop rotation and land preparation, in co-operation with Prof Ken Flower of the University Western Australia (UWA). This group works with long-term crop rotation systems involving canola. It means planting wheat for two years, canola for one year, peas or lupines for one year, before returning to wheat. They also investigate short-term rotation crop systems that involve planting wheat for one year, peas for one year and canola for one year. The project is in it's infancy stage and the economic comparisons have not been completed. Prof Flower did provide the available results (available for perusal at the PRF office) and promised to send us the economic comparisons after February 2013.

    In South Australia, near Naracoorte, Trent Potter and Felicity Turner manage a comprehensive crop rotation trial that includes grazing. The results of the trial, "Improving grain yields, water use efficiency and soil by new rotations in the south east of South-Australia" will be made available to us at a later date.

    The farmer (Rod Birch), Dr David Bowran and Trent Potter emphasised that producers do not follow a fixed crop rotation system. Firstly, diseases (particularly black leg) are taken into account. Then producers consider the weather prospects for the season. Lastly they estimate the supply and demand (price) situation. In terms of black leg, they try to not have canola on the same land for more than one year in every three years. The situation is adaptable, depending on what practice dictates. There are cases where canola is planted every second year, but also cases where the break is longer. If the season prospects (good rains) look positive, the trend is toward planting canola. According to them, wheat performs better in poorer conditions. Sometimes the canola price is good from the beginning of the season and in those cases, farmers plant more canola.

    The current trials may provide guidance about future trends. Prof Ross Kingwell, economist at UWA, also emphasised that price and climate are important drivers in terms of crops planted. It was stated that more wheat would have been planted in this particular season, had producers known that the wheat prices would be so favourable.


  5. Income and cost estimates

    According to Chris Carter (Agricultural Economist at DAFWA in Perth) and Jaron Leask (Business Analyst at Northam), producers do not use income and cost estimates as they should. Their opinion is supported by Prof Ross Kingwell (School of Agriculture and Resources Econo­mics) at UWA in Perth. The government withdrew from one-on-one financial extention and planning services.

    Income and cost budgets are prepared by various consultants to advise and assist producers with planning. Banks use it to decide about financing and advice to producers. Consultants personally prepare the income and cost budgets in the areas where they work. Usually they focus on the economic and financial planning of the total farming enterprise and not individual enterprises.

    According to Prof Kingwell, the number of farmers in Western Australia declined over the past twenty years, from about 20 000 to about 5 000. The average current farm size is about 4 500 hectares, with assets of about AUS$6 million. Most farmers are therefore millionaires. The new generation farmers largely use consultants for advice and services. The only people that can afford to farm are those that already own a farm.

    UWA now has about 25 000 full-time and an additional 8 000 part-time students. During the past year, only 30 students studied agriculture and fewer than half of those studied farm business management.

    Prof Kingwell confirmed that despite available information about GM canola versus conventional canola in a crop rotation system, the system is largely subject to the influence of disease, price and climate. He does not think it is advisable to launch an intensive and expensive study about that in the current circumstances.


  6. Genetically modified (GM) canola

    Following tests in 2009 and after the lifting of the moratorium on GM canola in 2010, Western Australia started GM canola production, currently producing 300 000 ha GM canola. This represents more than 32% of the total canola area. The GM canola used is all glyphosate (RoundUpReady®) resistant. At the moment there is no glyphosinate ammonia (Liberty/Link®) canola in Australia. Allegedly, Bayer is reluctant to release Liberty/Link in Australia.

    The ammonium fraction of Liberty / Link is less effective in lower day temperature (below 20ºC) conditions as experienced in Australia during canola growing periods (Dr David Bowran – Director: DAFWA, Practices & Systems Innovation and Rick Horbury – Technical Adviser, Bayer Crop Science).

    The general view is that GM canola could render a 5% to 15% yield increase. It depends on various factors. The department (DAFWA) is currently compiling trial results for inclusion in a report (Dr David Bowran).

    The biggest advantage of GM canola is considered the facilitation of easier management of cultivation practices. Canola is planted in dry soil before waiting for rain. Soon after germination, RoundUp is sprayed to kill weeds. According to Rod Birch (canola producer) it allows producers to handle the large areas under canola more effectively. According to Birch, GM canola will market itself based on its practical advantages. The canola industry released a brochure on GM canola, "Canola: A Weed Management Option", for distribution to farmers (see Annexure 11.3: GM Canola – A Weed Management Option).

    According to Dr Bowran the technology costs for GM canola are included in the higher seed price. There is a statutory levy of 1% on canola supplied and the funds generated are used by the "Grains Research and Development Corporation (GRDC), to finance canola research.

    The GM canola industry has hidden costs and the most important of those costs are:

    • In Australia, GM canola must be stored separately and that could lead to increased costs.
    • In some cases this requires longer transport distances to delivery points.
    • Some European markets pay a premium for non-GM canola (amounts of 30 dollars or more per tonne are mentioned).

    In Western Australia farmers are advised strongly not to over-utilise GM canola, because it could lead to the development of increased weed resistance to RoundUp, particularly in rye-grass. Many farmers are changing completely from triazine tolerant cultivars to RoundUpReady® cultivars. In Australia, in general, resistance against RoundUp developed in 347 areas and in Western Australia the resistance has been recorded in 47 areas. Red lights flickered. DAFWA recommends a strategy of integrated weed control coupled with a crop rotation system where canola is planted only in one of three years on the same land, to control diseases in the process.

    A report by the Curtin University of Technology, entitled "Evaluation of the environmental and economic impact of RoundUpReady® canola in the Western Australian crop production system", prepared by Dr James Fisher and Dr Peter Tozer, notes the following:

    • Results show that RoundUpReady® canola yields equal and better profitability than triazine tolerant canola and that it does not differ much from conventional and Clearfield canola.
    • The calculated environmental impact of RoundUpReady® canola was about 43% of TT canola.
    • Fuel consumption was 5% to 6% lower compared to that for TT canola.

    The report is available for perusal at the PRF office.

    The Australian opinion is that GM canola will certainly increase in popularity. Currently only about 8% of the canola grown is GM canola, but according to expectations it will double in the next two years, to about 16% in Australia, generally. In Western Australia where most weed killer resistance occurs and where more than 90% of the TT canola is produced, RR canola represents almost 32%. According to estimates, the ratio could increase (Dr Bowran and Mr Nick Goddard).

    Dr David Bowran impressed us with his knowledge about all aspects relating to canola growing. He is definitely a good candidate to invite to South Africa.


  7. Seed companies

    1. Canola Breeders Western Australia (CBWA)

      Prof Wallace Cowling (Director: Research) mentioned that CBWA expanded its ties with NPZ-Lembke (Norddeutsche Pflanzenzuchtung – North German Plant Cultivation) and Bayer.

      CBWA also broadened their focus from TT canola to CL canola and RR-canola. Now they mainly develop three types of hybrids, including German, Chinese and Australian material.

      CBWA routinely tests grain yield, black leg, glucosinolate content (cut-off point of 15 mmol/g) and shattering. The international standard for glucosinolate content of canola meal is 30 mmol/g or less.

      Currently CBWA deploys three new TT canola hybrids that fall within the growth period of CB Jardee HT. As such it could perform well locally. They also have one conventional canola hybrid that grows faster than CB Agamax. The list of new cultivars is available for perusal at the PRF office.


    2. Nuseed

      The senior plant breeder (Dr Nelson Gororo) provided information about the breeding programme. The practical handling of field trials and seed multiplication is handled by Mr Murray Gannon. Mr Gannon provided information about that. At Melbourne Airport Mr Bill Swann (General Manager and Chief Marketer) provided information about Nuseed's actions in South Africa.

      Nuseed's breeding programme focuses on the development of conventional, triazine tolerant and RoundUpReady® canola types. No work is being done related to the Clearfield type. Nuseed also has an extensive programme to develop canola with a high oleic acid content. They call it "Monola". In Australia, a number of Monola cultivars are being grown and buyers receive a premium to com­pensate for the lower grain yields achieved. Nuseed just entered into an agreement with KFC in Australia. According to the agreement KFC will purchase all Monola grain with the high oleic acid content for oil used in KFC restaurants.

      Nuseed, in co-operation with CSIRO and GRDC, is also developing a long-chain omega 3 oil canola.

      According to Dr Gororo, it takes eight years from developing a hybrid to cultivar testing. They use three generations in the glasshouse with controlled lighting. From F3 to F7 are conducted in the field and they handle about 20 000 lines every year. They investigate two seasons per year in the field. In addition, they test intensively for glucosinolate content (cut-off point of 15mmol/g), black leg resistance (using multi-genes), protein content and oil content.

      Murray Gannon emphasised that they concentrate on avoiding mixing seeds in the seed multiplication plant. They test all deliveries for percentage germination and viability. Viability is tested in a special sand tray. At the moment they consider seed multiplication for South Africa in South Africa to increase seed multiplication. A final decision has not been approved. Nuseed liaise internationally with Monsanto and holds an important share of Druetto Argentina.

      In the disease garden for black leg testing, materials are planted in canola stubs to ensure contamination. The process allows them to measure the deterioration of resistance in a cultivar over seasons. They, as well as Trent Potter and Alan Bedggood recommended a similar testing process for South Africa, because resistance could deteriorate faster or slower in the South African environment.


    3. Pacific Seeds

      The Chief Plant Breeder (Mr Andrew Easton), Assistant Plant Breeder (Mr Jim Hazeldene) and Business Manager / Agronomist (Mr Justin Kudnig) provided information during a working dinner (Thursday evening) and during a visit to trials outside Horsham (Friday morning).

      PacSeeds is willing to create a link with our web address. We may contact Justin Kudnig directly (Justin.Kudnig@pacseeds.com.au) to establish the link.

      According to Andrew Easton and Justin Kudnig, PacSeeds will definitely submit entries for the Canola Elite trials in 2013 (possibly 15 entries).

      The PacSeeds breeding programme focuses on the development of hybrids involving all four types of canola (conventional, TT, CI and RR canola). Justin Kudnig emphasised that grain retained for seed with regard to hybrids yield approximately 25% less. In trials outside Horsham the difference was particularly obvious.

      PacSeeds handles canola seed multiplication and trials in Chile under irrigation too, but have not experienced any problems with crops following canola so far.

      Both Andrew Easton and Justin Kudnig are good candidates for invitation to South Africa. Andrew Easton in particular, could contribute significantly based on his sound knowledge of canola breeding.


    4. Pioneer / Du Pont

      The canola research manager is Rob Wilson of Wagga Wagga, but he was not in Australia during our visit. During any future visits, liaison with Pioneer is essential to obtain their views on canola breeding.


    5. Speciality canola

      1. Viterra

        The Chief Canola grower at Viterra is Dr Wayne Burton.

        According to Dr Burton, Viterra concentrates on Juncea canola (Brassica juncea), but through breeding they created a product similar to canola in terms of oil and meal characteristics. The meal is yellow and easily identifiable. It could fill a niche market for dog food.

        The breeding programme currently concentrates on cultivars which are in triazine tolerant, Clearfield and RoundUpReady® types. Juncea canola is a tall, upright plant with virtually no side branches, but with an impressive pod set. According to Dr Burton, Viterra's policy is to obtain plant rights in terms of their cultivars and to control the product from planting to marketing. Dr Burton feels that the South African market is too small for them to get involved. He requested a written presentation for consideration by their management. The presentation has been submitted to Viterra by e-mail. Juncea canola could have a place in South Africa, based on disease resistance, drought tolerance, resistance to shattering and suitability for direct harvesting.

        After consultation, indications for obtaining cultivars for evaluation in South Africa were not positive.

        More particulars about Viterra, from their "Grower Guide: Xceed ™ Canola", are available at the PRF office.


      2. Cargill Australia

        The Chief Breeder is Laura Maher (R&D Agronomy Manager) and the General Manager is Mr Xinmin Deng.

        Cargill have had an active own breeding programme in Australia for the past three years. Cargill handles their own testing, marketing and processing of their products. This means that they are controlling the entire value chain. The situation is similar to Viterra and prospects to obtain material for South Africa do not seem very positive. Laura was not available, but her assistant (Ashley Lynch) undertook to provide her with the PRF's particulars and request.

        Cargill's focus in the canola cultivation programme is healthier oil for the cooking oil market and as such is competition for Nuseed's Monola. Cargill already has impressive cultivars in terms of grain yield in the national cultivar trials. Cultivars such as Vic 3002 and Vic 3003 performed very well in the cultivar trials.

        The Cargill News is available for perusal at the PRF office.


  8. Australian Oilseeds Federation (AOF)

    The Chief Executive Officer (Mr Nick Goddard) met us in Sydney, at the end of the study tour, on Monday, 8 October 2012.

    He mentioned that GM canola did not increase as much as anticipated. According to estimates it accounts for 8% in Australia generally and according to future estimates, it will increase to 16%. Australia maintains an average production of about 2 million tonnes canola per year (previous year, 3,2 million tonnes). The local demand for crushing capacity is about 800 thousand tonnes and it could increase to 1,1 million tonnes. That will quickly increase to 1,5 million tonnes grain. According to estimates, the oil export market currently amounts to 100 000 tonnes of oil.

    The biggest canola exports are in the form of bulk grain to Europe, mainly for producing biodiesel. Australia does not use canola for the production of biodiesel, because it is too expensive. The current European price includes a 30 to 50 dollar premium per tonne for non-GM canola for human consumption. The GM canola grain is exported mainly to the East (Malaysia and Pakistan).

    The speciality canola market in Australia comprises about 10% of total production. In Australia, KFC committed itself to using Nuseed's Monola. Other fast food enterprises such as MacDonald's have not committed themselves yet. He does not consider a significant future for this type of canola in South Africa, as he feels that South Africa should increase its canola production before considering expansion to speciality types.

    Nick Goddard confirmed, again, that the PRF may establish a link with the AOF website immediately.

    According to Nick Goddard, he will inform and encourage the soybean industry to support and attend the WSRCIX-2013 in South Africa. Australia produces about 50 000 tonnes soy grain per year (previous year 80 000 tonnes) and imports about 500 000 tonnes soybean meal per year. The soybean industry is controlled directly by the Soy Australian Board. The Board use CSIRO for research and the chief breeder is Andrew James of CSIRO.


  9. Conclusion

    The study tour was successful and particularly valuable contacts were established.

    Both tour members found the new knowledge and information obtained valuable.

    We thank the PRF Board and Chairman for these opportunities created. We trust that the PRF and industry will benefit from the tour.


  10. Annexures

    Follow the links below to view or download the annexures in PDF file format: