March 1997
Laurate canola looks to be the next oil boom
By Tracy Sayler
LibraryHome
E-Mail
Back
Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
Contracts for this canola cousin have been snatched up by growers in North Dakota and Minnesota, and a strong demand outlook for lauric oil makes it a good bet that laurate canola will not be a fly-by-night crop.
Laurate is a fatty acid that is found in the seed oils of only a few plant species, mostly coconut and palm kernel oil from tropical regions. Laurate possesses unique properties which makes it desirable in edible and industrial products. Lauric oil is ideal for use in the soap and detergent industries, as it is responsible for the cleansing and sudsing properties of shampoos, soaps, and detergents.
The oil can also be used as a safe food substance, in a base for chocolate-flavored coatings in the confectionery industry and as a dairy fat substitute in simulated dairy products. Edible applications include confectionery coatings, coffee creamers, icings and frostings, and whipped toppings.
Biotechnological wonder
Since 1984, the Calgene Company, based in Davis, Calif., has been specializing in agricultural biotechnology, working to enhance the properties of plants using genetic engineering. Monsanto—itself becoming a biotechnological leader—owns a majority share of Calgene, which may be best known for pioneering the development of the Flavr Savr™ tomato.
With the U.S. importing about $400 million worth of lauric oil annually, mostly from the Philippines, Malaysia, and Indonesia, Calgene recognized a market with potential. Although laurate occurs naturally in dairy products, it is not found within oilseeds grown in North America, and there were no domestic sources of laurate.
Calgene isolated the gene responsible for laurate production from the California Bay Laurel tree. It was then engineered into canola, resulting in the production of oil containing approximately 40% laurate.
"We created a cool season crop that produces a tropical oil," says John Van Dam, the company’s north oils division manager, based in Park River, ND. Calgene picked canola as a host for the laurate gene because it is an indigenously-rich, oil-producing crop, and because its genetic makeup is easier to engineer compared to most other crops.
The first field trial of laurate canola took place in 1992, and the first commercial planting in 1994. As the first DNA-modified oilseed crop, Calgene needed the green light from three federal agencies—USDA, the Food and Drug Administration, and the Environmental Protection Agency—to propagate laurate canola seed.
Last year, Calgene contracted 7,300 acres of laurate canola production with about 78 growers in northeast ND and northwest MN. Production was stored on-farm and then hauled to regional delivery points. "We moved about 10 million pounds of seed in three weeks," says Van Dam. The laurate canola was custom-processed at CanAmera Foods, Altona, Manitoba.
The lauric oil will be used by confectionery companies to make chocolate-flavor coatings. "Laurate canola has a flavor and texture that makes it well-suited as an alternative to cocoa butter," says Van Dam, who also points out that lauric oil garners a better price when sold into edible-oil markets as opposed to industrial. Calgene is marketing the special vegetable oil under the brand name Laurical™.
Laurate from canola has the functional advantages of tropical oils, but at a lower cost. It may also prove to be a functionally-better oil (especially taste and texture) with more potential uses than other laurate sources. "When we sent samples to several different confectionery companies, they were so impressed that they are interested in purchasing everything we can produce," says Van Dam.
Last fall, Van Dam geared up for a contracting campaign he thought would last through March of 1997, to sign up grow
ers to produce about 25,000 acres of laurate canola in 1997, about a three-fold increase over area production last year. Grower response was overwhelming: he more than doubled his targeted contract acreage goal by Christmas. Van Dam had to stop contracting because he sold out of planted seed. "Otherwise, I could have contracted more acreage," he says.
Van Dam is not concerned about the massive increase in contracted acreage over last year. Domestic demand for lauric oil is strong, and with its patented laurate canola, Calgene is the only U.S. supplier. "We can sell all the oil we can produce," he says confidently.
Grown under contract
Calgene offered growers a minimum guaranteed contract between 14 and 15 cents/lb for 1997. The contract was 13.5 cents/lb last year. Growers may contract a minimum of 40 acres and as much as 500 acres. The average grower contract is about 100 acres. Last year’s production area in the Northern Plains stretched from a line between Rolla and Rugby in North Dakota over to Roseau and Clearbrook in Minnesota.
This year, production will expand as far west as Bowbells, ND, and as far south as Buchanan, ND, which is near Jamestown. "Our laurate canola has shown it can do well even in drier, hotter climates," Van Dam says. Calgene will know even more about the agronomic performance of laurate canola in the Northern Plains from the study of close to 20,000 field plots covering over 50 acres in more than 12 locations in 1997.
Four laurate canola varieties are on Calgene’s contract production list. Laurate canola requires the same production management as conventional canola. Laurate canola has a slightly later maturity date. The laurate varieties are lower yielding compared to most conventional hybrid varieties, but comparable to open-pollinated canola. Last year, about half of the contracted laurate canola yielded between 1,400 and 1,700 lbs/acre, with some acres climbing over 2,000 lbs.
"We averaged about a 40.5% laurate oil content on our contracted acreage last year, and that’s good," says Van Dam. The market requires a 36% minimum laurate oil content.
There is one threat to laurate canola production that Calgene takes great pains to avoid: contamination with commodity or conventional canola. "If we have physical contamination, whether it occurs at planting, combining, or storage, then we’ve got a supply of lauric oil that’s almost worthless to us," says Van Dam. "To secure customers, we need to guarantee quality and supply." A strong grower educational program, along with field mapping, isolated on-farm storage, and sample testing before shipment are some of the measures Calgene uses to prevent contamination with regular canola.
In addition to this year’s contracted acreage in the Northern Plains, Calgene has about 18,000 acres of laurate canola contracted in the South. Growers there plant spring canola in the fall and then double-crop with peanuts, cotton, or corn.
"The rotational compatibility with small grains is one of the benefits to the production of canola in general up here. In my experiences, I’ve almost always seen yield increases or quality improvements in the wheat or barley crop that follows canola. Diseases or insects that affect wheat don’t affect canola, and vice versa. However, canola is not a miracle crop and there are growers who shouldn’t be farming it out there," says Van Dam, who has 17 years of experience in the canola industry.
In addition to the domestic market, lauric oil demand is projected to increase significantly overseas, as improvements in the standards of living occur in China, Southeast Asia, Eastern Europe and Latin America. The worldwide lauric oils market exceeds 10 billion pounds, according to Calgene. The production of just 100 million pounds of lauric oil would require over 150,000 acres of production, and generate over $35 million in income for farmers and the rural economy.