New England canola growers and beef producers could stand to gain if Australia doubles its canola crushing capacity, according to a new Rabobank report which says the industry’s growth depends on finding buyers for the protein meal left over from crushing, not just the oil.
The report, Feeding the future: The coproduct that determines how far Australia can scale crushing, says canola crushing is usually talked about in terms of vegetable oil and biofuel demand. But RaboResearch, the bank’s research arm, says the economics depend just as much on selling canola meal, the higher-volume by-product of processing.
Report author and Rabobank senior grains and oilseeds analyst Vitor Pistoia said Australia already imports large volumes of protein feed that could be replaced by home-grown canola meal.
“Australia currently imports around 1.02 million tonnes of canola meal equivalent annually, primarily in the form of soybean meal and PKE (palm kernel expeller),” he 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.”
RaboResearch estimates that replacing those imports alone could add up to two million tonnes to Australia’s canola crushing capacity, more than double the current installed capacity of about 1.6 million tonnes. That would lift the share of Australia’s canola crop processed at home from around 25 per cent to about 50 per cent, closer to Canada, where crush is projected to reach around 64 per cent of the national crop in 2026/27.
The report says the extra crushing volumes would also mean more demand for canola seed itself, a point of interest for growers in NSW cropping country such as Moree, Narrabri, Gunnedah, Inverell and Quirindi. More stable seed demand, the report says, can help underpin grower returns and support planted area, which in turn improves crushing economics.
Dairy and beef sectors were named as the strongest markets for the extra canola meal.
“Australia’s dairy and beef industries represent the most attractive demand pools for additional canola meal,” Mr Pistoia said.
The report notes canola meal is well suited to ruminant diets due to its protein profile, and that New South Wales and Victoria are close to Australia’s main livestock feed demand centres.
On the east coast, the report points to established port infrastructure already used to bring in feed products such as soybean meal and PKE. It names Newcastle alongside Geelong, Brisbane and Melbourne as the ports handling about 75 per cent of Australia’s imports of these feed products between 2023 and 2025, saying the same supply chains could be used to move canola meal to livestock producers once crush capacity expands.
But Mr Pistoia said the key commercial test was whether canola meal could compete with soybean meal, PKE and other feed ingredients on price and nutritional value, not simply whether it could be transported to buyers.
“The commercial question is not whether meal can move, but whether it can move profitably,” Mr Pistoia said.
The report is the third and final instalment in Rabobank’s research series looking at how emerging biofuel demand and processing opportunities could reshape Australia’s canola industry.
“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,” he said.
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