FAS USDA expects Canadian canola production to increase despite shrinking acreage

According to the USDA Foreign Agricultural Service (FAS), Canadian oilseed production, including soybeans and sunflower seed, is forecast to reach 25.57 million tonnes in 2025/26, up slightly from the previous year.

FAS forecasts canola production in 2025/26 to be 18.46 million tonnes, up from the 17.84 million tonnes expected this season; soybeans to be 7.0 million tonnes, up from 7.57 million tonnes; and sunflowerseed to be 53,000 tonnes, up slightly from the 51,000 tonnes expected this season.

Despite a projected reduction in planted area compared to the previous year, Canadian canola is the main driver of overall oilseed production growth, supported by improved soil moisture conditions in Saskatchewan and Alberta and expected yields higher than in 2024-25.

Total oilseed production is projected to increase by about 16,000 tonnes in 2025-26 compared to the previous year to reach 5.3 million tonnes, with canola oil accounting for 4.94 million tonnes, of which 3.9 million tonnes will be exported, and the U.S. is projected to remain the largest buyer at 1.6 million tonnes, driven by demand from the renewable fuels sector.

“Strong U.S. canola oil demand is expected to continue as average canola oil export prices are the lowest since 2020 and a weak Canadian dollar is helping to offset at least some of the recently imposed tariff costs for U.S. importers,” FAS said. “U.S. importers will likely absorb the canola oil duties and pass on any increased costs to U.S. consumers.”

The service noted that Canada’s total canola oil crushing capacity has increased from 8.28 million tonnes in 2011 to 14.56 million tonnes in 2025.

Canola seed exports in 2025/26 are forecast to fall to 6.5 million tonnes from 7.3 million tonnes this season, due to lower domestic supplies and increased domestic crushing capacity in 2025. The share of seed shipments going to export is forecast to fall to 32%, below the three-year average of 36%. China will remain the largest buyer of Canadian seed.

Soybean exports are forecast to fall to 5 million tonnes in 2025/26 from 5.5 million tonnes as planted area declines 1% to 2.28 million hectares.

Tags: Canada, rapeseed