The report said canola crushing was often viewed through demand for vegetable oils and biofuels; however, the economics of crushing depend equally on commercialising canola meal, the co-product generated during canola oil processing.
Report author and Rabobank senior grains and oilseeds analyst Vitor Pistoia said that domestic canola meal could replace imported protein feed ingredients.
“Australia currently imports around 1.02 million tonnes of canola meal equivalent annually, primarily in the form of soybean meal and palm kernel expeller,” Mr Pistoia said.
“Australia already imports a sizeable pool of feed protein.
“That existing market provides a practical benchmark for how much additional canola meal could potentially be absorbed if domestic crushing expands.”
Replacing feed imports alone could add up to two million tonnes of crushing capacity to Australia’s canola industry, which would more than double the existing 1.6 million tonne capacity.
If this is achieved, domestic processing would lift from 25 per cent to around 50 per cent.
Mr Pistoia said replacing imported livestock feed ingredients represented the most immediate and scalable opportunity for canola meal demand growth.
The report identified Australia’s dairy and beef sectors as markets with the strongest long-term potential demand for canola meal.
RaboResearch said canola meal was particularly well suited to ruminant feed systems, due to its protein profile and nutritional characteristics, positioning it competitively against alternative feed products in dairy and beef rations.
“Australia’s dairy and beef industries represent the most attractive demand pools for additional canola meal,” Mr Pistoia said.
Western Australia has the largest canola surplus in the country and has limited existing crushing capacity; however, Mr Pistoia argues that existing feed import supply chains can handle transport to the eastern states.
Mr Pistoia said that while oil demand may drive initial investments in crushing, particularly for renewable fuels, long-term success would depend on developing profitable and scalable markets for meal.
“More crushing supports more stable demand for canola seed,” Mr Pistoia said.
“More stable demand can help underpin grower returns and encourage production.
“Larger and more reliable canola supply then improves crushing economics, while locally produced canola meal can increase feed availability and reduce exposure to imported protein-meal markets.”
