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Australian Canola Meal Outlook
Jon SleeJon SleeVice President AOF
Creating value through diversity, innovation and excellence
OutlineOutline
i h li ’ l• Setting the scene ‐ Australia’s Canola Processing Industry & Meal Market
• Types of Australian Canola Meal & Value
• Market OverviewBroiler– Broiler
– PigD i– Dairy
• Where to focus & summary
Creating value through diversity, innovation and excellence
Australian Canola Crush 1990 2012Australian Canola Crush 1990 ‐ 2012900
700
800Crush Growth of around 40,000 tonne per annum over past 10 years
500
600
300
400
100
200
0
Creating value through diversity, innovation and excellence
Source: USDA Data
Australian Canola Crush CapacityAustralian Canola Crush Capacity2500
1500
2000
500
1000
02000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Current Plants New Plant New PlantCurrent Plants New Plant New Plant
• Continued Growth of current operators & further consolidation/integration of the crush & refine industry. • New Plant 1 ‐ (160,000 tonne capacity) on line this coming season 100% Canola (originally this was going to be a Safflower plant for bio‐diesel production)N Pl 2 (1 100 000 i ) li 2013 14 M l i S d
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•New Plant 2 – (1,100,000 tonne capacity) on line 2013‐14 Multi Seed Plant?? Originally was 100% Imported Soybean (watch this space?????)
Australian Canola Meal MarketAustralian Canola Meal Market1990 M k
Layer8% Dairy
9%
1990 Market (250,000 tonne)
2012 Market9%Beef & Lamb2%
Layer7%
2012 Market (400,000 tonne)
Pigs
Broiler54%
Broiler35%
Dairy26%27% 26%
Pigs
Beef & Lamb6%Export
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19% 7%
Types Of Canola MealTypes Of Canola Meal
C ld P d
Australian Canola Meal by Processing Method
Cold Pressed2%
Solvent Expeller Pressed39%
Extracted59%
Australia is unique with this product split and we need to
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better educate the whole industry on the differences
Canola Meal Value (as % of Soy meal price)
Solvent Meal
With soy meal at
Expeller Meal
With soy meal atMeal meal at
$700Meal meal at
$700
Poultry 60% $420 65% $455
Pigs 65% $455 70% $490
Dairy 80% $560 80% $560
Over the past 3 years Australian Values have generally been below 60% and have often traded at close to 50% relative to Soymeal –WHY????WHY????Canada has doubled is Meal Production and consistently trades at 75‐80% Soymeal value in California
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Broiler (Meat) Chicken IndustryBroiler (Meat) Chicken IndustryAust' Chicken Meat Production
Growth of
400600800
10001200
000 tonn
es
Growth of 3‐4% per annum
0200
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
• Dominated by two major players.• Have been the primary market for Aust canola meal –
some of this has been replaced by the use of seed.p y• Least cost formulators and can be very elastic. Canola Meal Priorities:
F d S f t N 1• Feed Safety No 1• Product Variability (season, geographical & supplier
based)
Creating value through diversity, innovation and excellence
• Amino Acid digestibility
Pig IndustryPig Industry'
300
400
500
nne
Aust' Pork Meat Production
0
100
200
300
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
000 To
n
199
199
199
199
199
199
199
199
199
199
200
200
200
200
200
200
200
200
200
200
20 20 20
Least Cost feed formulations and can be a very “elastic” market for canola mealmarket for canola meal.
Canola Meal Priorities :• Feed SafetyFeed Safety• Protein (Amino Acid) digestibility• Inclusion Levels Run at approx 5% as a National average (some are using as high as 20%)
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( g g )
Dairyy
6000
6500
Litres Per Cow Per Annum
4500
5000
5500
6000
3000
3500
4000
4500
Average production has lifted 1000 litres per cow
since 20053000
Globally Dairy is No1 Market for Canola Meal
since 2005
Globally Dairy is No1 Market for Canola MealIn high production cows the demand become in‐elasticCanadian Research has shown that 1kg Canola meal can produce more milk than 1kg soymeal (THIS IS VERY IMPORTANT)more milk than 1kg soymeal (THIS IS VERY IMPORTANT)Canola Meal Priorities:• Reduce variability• Increase education and awareness on benefits of Canola Meal
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Impact of Milk Production on Canola Meal requirements
3000‐5000 6000 7000 8000 9000 1000Shift f 1000 lit th3000‐5000 6000 7000 8000 9000 1000Canola kg per day 0 0.5 0.5 1 1.5 1.75
Days per annum 0 100 125 175 225 300
Shift of 1000 litres per cow on the curve DOUBLES the Australian Canola Meal
Kg per annum 0 50 62.5 175 337.5 525
Market Size (Tonnes)
0 16,250 20,313 42,656 54,844 42,656
Market for Dairy
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(Tonnes)
High Fat Canola Meal Saving the WorldHigh Fat Canola Meal Saving the World
Vi DPI h i di t• Vic DPI research indicates a 3.5% reduction in Methane for every 1% increase infor every 1% increase in Dietary Fat.
• Vic DPI recommends usingVic DPI recommends using expeller/cold pressed Canola or Hominy Meal.
• Increasing Milk production per cow also reduce
h dMethane production per litre milk.
Creating value through diversity, innovation and excellence
Australian Canola Meal Market FutureAustralian Canola Meal Market Future1990 Market
Layer8% Dairy
9%Beef &
(250,000 tonne)
Layer
2012 Market (400,000 tonne)
Layer
2017 Market (660,000 tonne)
Broiler
Lamb2%
Broiler35%
Layer7%
Broiler24%
Layer6%
Pigs27%
Broiler54%
35%Dairy26%
Dairy38%
1990 Dairy = 9%2017 D i (L l & E t) 51%
Beef & LambPi
38%2017 Dairy (Local & Export) = 51%Pigs19%
Lamb6%Export
7%
Pigs13%
Beef & LambE t
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Beef & Lamb6%
Export13%
What does the industry Need to do?What does the industry Need to do?• Improve quality and focus on monogastric &
ruminant productruminant product• Feed Safety (This is a must)
– Reduce meal moisture levels will greatly reduce risk.Reduce meal moisture levels will greatly reduce risk.– Is the addition of 25,000 tonnes of water a
sustainable practice??? THIS IS A GLOBAL ISSUE• Reduce Product Variability & Communicate this• Reduce Product Variability & Communicate this
to the market• Focused development ‐each industry (DAIRY No p y (
1 Priority) & Market • Where’s our next market? ‐ 4.4 Million cows in
NZ only producing 3800 litre per cow (or SthNZ only producing 3800 litre per cow (or SthKorea, Vietnam, Thailand??
• STAY FOCUSSED ‐ DAIRY DAIRY DAIRY
Creating value through diversity, innovation and excellence
THANK YOU
Creating value through diversity, innovation and excellence
