Farmers and government officials are elated that Richardson International is doubling the annual crush capacity at its facility in Yorkton, Sask.
“This is just really good for agriculture here in Canada,” said Saskatchewan Canola Development Commission chair Bernie McClean.
When the expansion project is completed in early 2024 the facility will be able to crush 2.2 million tonnes of seed annually, making it the largest canola crush facility in Canada.
Construction will begin immediately and there will be no disruption to current operations.
Richardson’s announcement comes on the heels of two proposed Saskatchewan renewable diesel refinery projects announced last week that would use canola oil as feedstock.
True North Renewable Fuels Ltd. hopes to build a plant in Regina capable of producing one billion litres of renewable diesel per year starting in 2025. It would require one million tonnes of canola oil per year.
Covenant Energy is proposing to build a renewable diesel refinery one-third that size in Estevan, Sask., that will be operational in late-2023.
But Richardson said there is no connection to those two projects.
In an email, company spokesperson Kelcey Vossen briefly addressed why Richardson is investing further in the canola industry.
“We would like to emphasize that this does not have to do with the Clean Fuel Standard but is to fill a food production need for both canola oil and canola meal,” she said.
“The outlook on canola has been good and will continue to be positive and our expansion project is to meet this increased global demand.”
The dollar value of the expansion project was not revealed. The company’s last big investment in the crush sector was the $120 million expansion of its plant in Lethbridge, Alta. that was completed in 2017.
McClean doesn’t think the Yorkton expansion will result in growers planting more of Canada’s Cinderella crop.
“When I think of my own farm I’m maxed out and I think in general across Canada with the sustainable rotation we’re likely right at the top end of that,” he said.
But he is confident it will increase demand for the product, which in turn will push prices higher and encourage farmers to invest in their operations.
“I’d be surprised if it really drives acres higher (but) it’s going to drive production per acre higher,” said McClean.
Farmers are going to see a new source of stable demand that is not subject to some of the vagaries of international markets such as tariff and non-tariff barriers.
That will give growers the confidence they need to maximize their inputs and invest heavily in equipment and technology.
“Maybe it’s a drill that better places seed so I’ve got better seed survivability coming out of the ground,” said McClean.
“Or maybe I can invest in variable rate technology so I’m placing my fertilizer exactly where it needs to be in the required amounts.”
The canola sector already contributes an estimated $29.9 billion to the Canadian economy annually. The Richardson value-added project will add to that total in a big way.
“Agriculture is going to help immensely to drive the economy post COVID-19,” said McClean.
Saskatchewan trade and export development minister Jeremy Harrison welcomed the news of Richardson’s Yorkton expansion.
Big news: Richardson announces significant investment in the Yorkton, SK crush plant to effectively double annual crush capacity to 2.2 million metric tonnes. Read the full release: https://t.co/kFmXgDZfxj#richardsoninternational pic.twitter.com/t0mjEs5Euy
— Richardson International (@Richardson_INTL) March 22, 2021
“This is a significant investment in our province that will create local jobs, support economic recovery and help our province continue to grow,” he said in a press release.
Saskatchewan agriculture minister David Marit said canola oil and canola meal were the province’s top value-added exports in 2020.
“This expansion of processing capacity will help Saskatchewan meet the goals outlined in our Growth Plan, which includes a target to crush 75 percent of the canola our province produces here in Saskatchewan,” he said.
Richardson opened the original Yorkton plant in 2010. It was by far its largest capital investment at that time, costing $170 million.
Two years later the company announced it was undertaking a $30 million expansion of the plant that concluded in 2014. That took its crush capacity to one million tonnes of seed from the initial 840,000 tonnes.
The latest expansion more than doubles that capacity. In addition, the grain company is building three 2,896 metre loop tracks to facilitate shipping and three high-speed receiving lanes for seed delivery.
McClean expects the Yorkton project will boost prices right across the Prairie region.
He used to be a custom grain hauler and knows the expensive part of trucking is getting the grain loaded and moving it the first 50 kilometres.
After that, the cost per kilometre drops considerably. So the drawing area for the plant could be fairly wide and that has a ripple effect on other crush facilities.
“I think it creates competition across the Prairies,” he said.