The world’s second biggest food and beverage company wants Canadian canola growers to plant more Nexera in 2012.
PepsiCo began switching its Canadian product lines to omega 9 oils in 2010 and is now starting to convert some of its
U.S. production facilities to the high oleic canola oil.
“Getting the acres up there to be able to consistently supply the scale that we’re interested in is a key message,” said Steven James, director of strategic sourcing with PepsiCo Foods Canada.
The omega 9 oil produced by Dow AgroSciences’ Nexera canola replaced mid-oleic sunflower oil in the production of PepsiCo’s extensive Canadian potato chip portfolio in the first quarter of 2010 and in its corn product line such as Doritos, Tostitos and Cheetos in the first quarter of 2011.
“The Canadian business is a little bit more flexible. We move faster than the big ship down south,” said James. “We’ve used Canada as a pilot and we’re now bringing on U.S. sites. We’re really trying to do that at a sustainable pace. As more oil is available, we’re adding more sites into the program.”
That’s why James is asking Canadian growers to plant two million acres of Nexera in 2012, which would be double this year’s plantings.
Farmers have heard similar messages from Dow and the crushers they deal with, but the companies feel it has more clout coming from an end user.
“We really want farmers to understand at the other end of these conversations there is somebody that needs and wants the oil and we need and want a lot of oil,” said James.
Years of testing have proven that Dow’s omega 9 oil meets all of the core taste, stability and health requirements for North America’s largest vegetable oil user.
But it also provided PepsiCo with a key advantage over the sunflower oil it had been using — canola is a much bigger crop.
“(PepsiCo) was a very big portion of that (sunflower) demand so I had some supply risk if there was a crop failure or reduced acres on sunflowers,” said James.
Dave Dzisiak, commercial oil leader at Dow AgroSciences, said the 2011 canola harvest results reaffirmed PepsiCo’s decision to make the switch.
“Last year (2011) was one of the toughest growing seasons ever and we’ll come off with one of the best crops ever,” he said.
The PepsiCo account is expected to consume half of Dow’s omega 9 oil production in 2012, so it is an important customer to appease.
“PepsiCo is a big buyer. They buy more than a lot of countries we sell to,” said Dzisiak.
That is why Dow and its processing partners have been lining up new growers to sign Nexera contracts.
Dzisiak knows what motivates farmers.
“We’re very confident that we can yield as good as any other canola that’s out there,” he said.
The company is putting its mone y where its mouth is. Dow’s Healthiest Profit Challenge assures growers planting Nexera hybrids they will generate higher profits than they would by growing any type of commodity canola, including InVigor, Roundup Ready or Clearfield varieties.
Participating growers will seed up to a maximum of 80 acres each of Nexera and the commodity canola of their choice on the same field using the same agronomic practices.
Dow will pay out any difference in profit plus the additional value of one bushel per acre if the commodity canola outperforms the Nexera hybrid.
“We truly believe we can be the most profitable canola for a western Canadian farmer,” said Dzisiak.
The incentive package for growing Nexera will differ by crusher and delivery window, but it will add up to a premium that will probably be more than $50 per tonne over commodity canola.
“That’s more than $1 per bushel. That’s a very substantial increase,” said Dzisiak.
He encouraged growers who want to plant hybrids to sign a contract soon because there is limited supply of hybrid seed and most seeding decisions will be made before Christmas.
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http://www.producer.com/Markets/Article.aspx?aid=41464
PepsiCo began switching its Canadian product lines to omega 9 oils in 2010 and is now starting to convert some of its
U.S. production facilities to the high oleic canola oil.
“Getting the acres up there to be able to consistently supply the scale that we’re interested in is a key message,” said Steven James, director of strategic sourcing with PepsiCo Foods Canada.
The omega 9 oil produced by Dow AgroSciences’ Nexera canola replaced mid-oleic sunflower oil in the production of PepsiCo’s extensive Canadian potato chip portfolio in the first quarter of 2010 and in its corn product line such as Doritos, Tostitos and Cheetos in the first quarter of 2011.
“The Canadian business is a little bit more flexible. We move faster than the big ship down south,” said James. “We’ve used Canada as a pilot and we’re now bringing on U.S. sites. We’re really trying to do that at a sustainable pace. As more oil is available, we’re adding more sites into the program.”
That’s why James is asking Canadian growers to plant two million acres of Nexera in 2012, which would be double this year’s plantings.
Farmers have heard similar messages from Dow and the crushers they deal with, but the companies feel it has more clout coming from an end user.
“We really want farmers to understand at the other end of these conversations there is somebody that needs and wants the oil and we need and want a lot of oil,” said James.
Years of testing have proven that Dow’s omega 9 oil meets all of the core taste, stability and health requirements for North America’s largest vegetable oil user.
But it also provided PepsiCo with a key advantage over the sunflower oil it had been using — canola is a much bigger crop.
“(PepsiCo) was a very big portion of that (sunflower) demand so I had some supply risk if there was a crop failure or reduced acres on sunflowers,” said James.
Dave Dzisiak, commercial oil leader at Dow AgroSciences, said the 2011 canola harvest results reaffirmed PepsiCo’s decision to make the switch.
“Last year (2011) was one of the toughest growing seasons ever and we’ll come off with one of the best crops ever,” he said.
The PepsiCo account is expected to consume half of Dow’s omega 9 oil production in 2012, so it is an important customer to appease.
“PepsiCo is a big buyer. They buy more than a lot of countries we sell to,” said Dzisiak.
That is why Dow and its processing partners have been lining up new growers to sign Nexera contracts.
Dzisiak knows what motivates farmers.
“We’re very confident that we can yield as good as any other canola that’s out there,” he said.
The company is putting its mone y where its mouth is. Dow’s Healthiest Profit Challenge assures growers planting Nexera hybrids they will generate higher profits than they would by growing any type of commodity canola, including InVigor, Roundup Ready or Clearfield varieties.
Participating growers will seed up to a maximum of 80 acres each of Nexera and the commodity canola of their choice on the same field using the same agronomic practices.
Dow will pay out any difference in profit plus the additional value of one bushel per acre if the commodity canola outperforms the Nexera hybrid.
“We truly believe we can be the most profitable canola for a western Canadian farmer,” said Dzisiak.
The incentive package for growing Nexera will differ by crusher and delivery window, but it will add up to a premium that will probably be more than $50 per tonne over commodity canola.
“That’s more than $1 per bushel. That’s a very substantial increase,” said Dzisiak.
He encouraged growers who want to plant hybrids to sign a contract soon because there is limited supply of hybrid seed and most seeding decisions will be made before Christmas.
--------------------------------------------------------------------------------
http://www.producer.com/Markets/Article.aspx?aid=41464
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