Tough choices for growers as prices remain high but dry conditions loom

Canola prices are at the best levels in five years, but dry conditions are making farmers cautious about planting. Many are waiting for rain before making sowing decisions.

World canola stocks have dropped to the lowest levels in five years, but farmers say they are still hedging their bets about how much to plant this year.

With an average harvest port price of $793 a tonne, one of the best levels in the past five years, farmers say the crop is expensive to grow, and they will need a decent rain before increasing hectares.

During harvest, prices for canola ranged from $760 to $820 a tonne from November to December on a port basis.

Banyena farmer Chris Drum. Picture: Zoe Phillips

Chris Drum from Banyena said the decision on whether or not to sow canola and how much hinged both on price and available soil moisture.

“It is an expensive crop to grow; you need at least $700 a tonne to make money or at least cover your costs,” he said.

“But without subsoil moisture we can’t grow it.”

Mr Drum said he would consider leaving canola out of the rotation this year if there wasn’t a decent rain, and lentils or additional barley could be grown instead.

Episode 3 director Andrew Whitelaw. Picture: Supplied

Episode3 director and analyst Andrew Whitelaw said world canola stocks were at the lowest levels since 2020, with the stock to use sitting at 9 per cent.

“A low stocks-to-use ratio usually points towards higher pricing,” he said.

Mr Whitelaw said ending stocks of canola internationally were forecast to fall to 7.6 million metric tonnes from 10.8m tonnes last year.

“As we go into 2025, canola is tight (and) if supply drops, then prices will rise dramatically,” he said.

Grain grower Jason Mellings from Carron said the dry seasonal conditions were likely to have just as big a bearing on just how much canola growers choose to sow this year.

“We haven’t got soil moisture,” he said.

“That could change given a good opening rain, but we still have to consider that it is an expensive crop to grow,” he said.

Mr Mellings said he would plant canola as part of his upcoming winter crop rotation but would “play the game conservatively”.

He said prices needed to be at least $700 a tonne, but values of $800 a tonne were better in terms of being able to make a profit.

Hypothetically, if he were to take canola out of the rotation, he would consider adding more wheat in its place.