WESTERN PRODUCER — Not long ago, sunflower buyers would offer new crop prices in January or February to attract production in the spring.
Now, buyers are posting prices in the summer to convince farmers to grow sunflowers the following year, said John Sandbakken, executive director of the National Sunflower Association in the United States.
“In the last two years, we’ve had new crop prices (much earlier), last year, starting in August. For this season, we (were) seeing 2022-23 prices that already went into effect in May or June,” Sandbakken said from his office near Bismarck, N.D.
“The companies are taking it seriously, trying to get acres…. It’s giving the signal that there’s going to be consistent demand for sunflowers and the oil.”
North America may soon need more sunflower acres because demand for sunflower oil is booming.
- In April, Businesswire.com reported that global demand is expected to grow at 5.67 percent between 2020-25.
- In the U.S., sunflower oil consumption increased 50 percent from 2017 to 2021 and the growth is expected to continue at a rate of five to 10 percent annually, says Oil and Fats International
The food industry is using more sunflower oil because some processors are moving away from palm oil and more expensive olive oil.
“The manufacturers of snacks are readily opting for sunflower oil due to its capability to impart good properties to the products… (and) the snack industries are choosing sunflower oil as a convenient alternative to palmolein oil,” Businesswire.com said.
The strong demand is great news for the sunflower industry because the interest has convinced a few growers to expand acres.
American farmers planted 1.7 million acres of sunflowers in 2020 and 1.65 million in 2022, up from around 1.4 million acres in 2017 and 2018.
In Canada, sunflower acres have also seen growth, going from 76,000 in 2019 to an estimated 93,000 this year, using Statistics Canada numbers.
Acreage growth has been modest, but strong yields have boosted production and fulfilled the continued demand for more oil.
“They (yields) have been going up a lot,” said Morgan Cott, an agronomist with the Manitoba Crop Alliance. “If I was a producer, I would probably (target) 2,500-2,800 pounds per acre. I think we used to say low 2,000s or 2,000 (lb. per acre) would be good.”
Going forward, more acres are needed in places like Manitoba, North Dakota and Â鶹´«Ã½AV Dakota to satisfy demand for sunflower oil, Sandbakken said.
ADM has built a renewable diesel plant in Dickinson, N.D., and Federated Co-operatives Ltd. plans to build a $2 billion renewable diesel and canola crushing plant in Regina. Similar projects are in the works, thus creating new buyers for canola and soybean oil.
“When you look at what’s going on with renewable diesel… the feedstock for that is either going to be canola or soybean,” Sandbakken said.
“If you take that oil off the (food) market, somebody has to fulfil (that). The food demand isn’t going to go away. That’s where I see our greatest opportunity (for sunflower oil)…. We would like to see growth, of a good five to 10 percent (per year)…. As renewable diesel comes online, we may need to increase that to 10 to 15 percent.”
Using 1.6 million acres as a base line for U.S. acres, that would mean an additional 100,000 to 200,000 acres per year.
In Canada, Cott and others are hoping that more farmers will try sunflowers or expand acres.
But, like most things in agriculture, it comes back to price.
“The market has to consistently relay a profitable price to growers,” Sandbakken said.
