1. Canola Quality Review Canola Council of Canada 38 th Annual Convention Halifax, July 18, 2005 Dave Hickling Canola Council of Canada

2. Quality = Value Background and Assumptions Canola is subject to commodity pricing due to high global production Canola is facing increased commodity competition from soybeans and palm Canola oil is a high value product in some markets

3. Quality = Value Background and Assumptions There are current opportunities (health, functionality) to increase canola value Canola quality weaknesses should be identified and fixed Research and development will be value driven

4. Canola Quality Review Project Outline 1.Interview customers and industry to determine quality components What quality components currently provide value? What new or different quality components would provide value? 2. Review quality competitiveness 3. Analyze and prioritize quality components 4. Recommend improvements

5. Customer comments United States Oil - Saturated fat content (< 7%) (Food labelling) - Chlorophyll a concern - Light, neutral taste positive for bottlers - Nutritionists like fatty acid profile (“Perfect oil”) (Nutrition guidelines, health claims) - High stability canola positive as trans fat replacement (Food labelling) Meal - Premium value in dairy feed

6. Customer comments Japan Seed - Chlorophyll maximum: 20 mg/kg - Moisture content: 7.0% - 8.0% - Oil content minimum: 42.5% - Keep free fatty acid levels low

7. Customer comments Japan Oil - Appreciate light taste and low cooking odour - Good iodine values (110 – 120 units) (mayonnaise) - Saturated fat levels and health benefits of fatty acid profile not currently perceived as a benefit Meal - Energy undervalued in Japan Feed Standards - Generally considered a byproduct and is not well promoted

8. Customer comments Mexico Seed - High oil content is important - Chlorophyll is important Oil - Most canola oil is sold as vegetable oil – health benefits an emerging issue - Light taste and neutral flavour a benefit for vegetable oil use Meal - Generally get good value for meal - Enhanced meal value for poultry would be beneficial

9. Customer comments China Seed, Oil - High oil content is important - Chlorophyll content more important as more oil is RBD Meal - Canola meal value not generally appreciated due to mixing with rapeseed meal

10. Customer comments Pakistan Seed, Oil and Meal - Oil content versus Australian a concern in 2003 - Chlorophyll removal a technical problem - Like protein content of Canadian canola

12. Canola Seed Quality Oil content Chlorophyll level Moisture Free fatty acids Seed size Variability

13. The average oil content of Canadian canola from 1994 to 2004 as per the Canadian Grain Commission Harvest Survey. DeClercq, 2004.

14. Value of higher oil (and lower meal) content in canola seed based on oil price of $600/t and meal price of $150/t. Oil content %Meal content %Seed value $/tChange $/tChange % 4060 $330.00-$9.00-2.7% 4159 $334.50-$4.50-1.3% 4258 $339.00$0.000.0% 4357 $343.50$4.501.3% 4456 $348.00$9.002.7%

15. The average chlorophyll content of Canadian canola from 1994 to 2004 as per the Canadian Grain Commission Harvest Survey. DeClercq, 2004.

16. Cost of removing chlorophyll from canola oil based on the costs of bleaching clays, phosphoric acid treatment and other processing costs. GradeGreen seed, %Chlorophyll, ppm Chlorophyll removal cost, $/t oil 1210$0 1215$0 1220$2 1225$5 2530$7 2535$10 2540$15 2545$20 31050 +$30

18. Canola Oil Quality Saturated fat level Mono-unsaturated fat level Polyunsaturated fat level Erucic acid level Functional characteristics: taste, stability Other components: sterols and tocopherols Non-food use functionality Variability

19. The average saturated fat content of Canadian canola from 1994 to 2004 as per the Canadian Grain Commission Harvest Survey. DeClercq, 2004.

20. The relative amount of Brassica napus and Brassica rapa planted in Western Canada from 1994 to 2004 as per the Canadian Grain Commission Harvest Survey. DeClercq, 2004.

22. Canola meal value Protein level Amino acid levels (lysine, methionine, histidine) Amino acid digestibility (heat damage, structural matrix) Energy level (fibre content – carbohydrate digestibility) Vitamins and minerals (choline, phosphorus, selenium) Anti-nutrients (glucosinolates, phytate, tannins, sinapine) Colour Variability

23. The average protein content of Canadian canola from 1994 to 2004 as per the Canadian Grain Commission Harvest Survey. DeClercq, 2004.

24. Canola meal value Canola meal is the second most popular protein meal in world. Value is related to soybean meal - Canola meal has 75% the protein of 47% protein soybean meal - Canola meal has 80% - 90% the energy value of dehulled soybean meal - The price of canola meal usually ranges between 60% and 70% the price of soybean meal

25. Canola meal relative value to soybean meal Animal typeRelative value (% soybean meal) Broiler chicken55% - 65% Layer chicken60% - 70% Hog grower65% - 75% Dairy Cattle70% - 85%

26. Canola meal value increase ($/T) with 10% nutrient increase NutrientBroiler chicken Hog grower Dairy Protein: 35% vs 38.5% $8$3$10 Lysine: 2.02% vs 2.22% $3 $0 Digestible lysine: 78% vs 88% $3 $0 Energy: 100% vs 110% $15$3$2

27. Quality improvement priorities Seed - Higher oil content - Lower chlorophyll levels Oil - Saturated fat content - Extra value components (omega-3, tocopherols) - Functionality (oxidative stability) Meal - Energy content

28. Direction of quality improvements Quality improvementWhole industry Niche market Unclear (Both?) Seed oil contentY Seed chlorophyll levelY Seed moisture contentY Oil saturated fat levelY Oil fat profile / value componentsY Oil functionality / stabilityY Oil non-food use functionalityY Meal protein (amino acid) levelsY Meal energy levelY Meal colourY

29. Methods to improve quality Incentives / Penalties Market premiums Regulatory mandate ? Mechanisms Breeding objectives (WCC/RRC) Agronomic management Regulatory (inspection and grading) standards (CGC) Processing Sourcing and handling management

30. Next steps Further analysis Determine cost / benefit of key quality improvements Industry consultation Provide quality improvement framework for industry consideration Work with industry and regulatory authorities on mechanisms by which to improve canola quality

31. Further analysis Determine cost / benefit of key quality improvements –Oil content: potential premium/discount system Logistical (segregation) issues Effect on other components in seed Study existing systems in other countries –Chlorophyll content Reduction through breeding and/or agronomics Improved measurement or grading Improved handling

32. Further analysis Determine cost / benefit of key quality improvements –Saturated fat levels Variability by growing region Reset breeding objectives (?) –Canola meal energy content Breeding (yellow seeded napus, other fibre reduction) De-hulling or other processing Enzymes

33. Thank you www.canola-council.org