Oil quality bonuses and premiums have become an increasingly important element in winter OSR profitability these days.
From ‘the icing on the income cake’ at rapeseed prices of 350/t or more, oil quality bonuses and premiums have become an increasingly important element in winter OSR profitability these days.
At 1.5 per cent of the ‘double low’ contract price for every 1 per cent over 40 per cent, oil bonuses certainly deliver less at 265/t than they did in better times. But, insists Frontier northern seed manager, David Waite, an extra 23.85/t – or over 95/ha at 4t/ha – for the average 46 per cent oil recorded across 500 samples from the 2015 crop in one of the company’s regional laboratories, can be a lifeline when profitability is on a knife edge.
Equally, the 20-25/t flat rate premiums – 80-100/ha – on top of this currently being delivered by high oleic, low linolenic (HOLL) rapeseed contracts means 10-20 per cent of oilseed rape returns could come from quality these days.
“What’s more, commercial winter OSR oil contents are much less variable than yields, so the returns they generate are more certain,” David Waite pointed out.
“The vast majority of our regional lab samples from the 2015 crop, for instance, ranged from 44-47 per cent oil against typical yields of 3.5-5.0 t/ha. That’s a quality variation of less than 7 per cent compared with over 40 per cent in yield.
“Modern ‘double low’ varieties do, however, vary sufficiently in their oil content to make a valuable difference to returns,” he stressed. “At 265/t, the lowest oil variety on the RL at 43.8 per cent offers a bonus of just over 15/t while the highest at 45.9 per cent earns 23.50. This means an extra income of 8.50/t or 34/ha for a 4t crop.”
This gap is even wider in commercial practice, reveals the latest Kleffmann Group research with a sample of 400 growers across the country carefully structured to be representative of the industry as a whole.
Oil contents of the 14 most popular ‘double low’ varieties in 2014/15 – together making-up nearly 70 per cent of national plantings – varied from 43.4-46.1 per cent last harvest; an earning difference of almost 10.70/t or nearly 43/ha for the 4t/ha crop at current prices.
Under these circumstances, David Waite is adamant that growers wishing to make the most of their crop’s earning power must take oil content into account proportionately alongside seed yield in their variety choice – through the standard gross output calculation.
Which is exactly what large numbers are doing, according to the Kleffmann data which show the single most popular variety with growers last year, DK Extrovert topping the commercial 2015 harvest gross output rankings by a considerable margin (see Figure 1).
“Our variety testing and field experience reveals it’s essential to judge varieties as much on their performance under ordinary farm regimes as in small plot trials,” insisted David Waite. “This is underlined by the fact that the latest Kleffmann data shows top variety gross outputs in a very different order to that of the Recommended List.”
Unsurprisingly, the national plantings breakdown for the current season shows DK Extrovert remaining the most widely grown variety for the second year in a row despite never having been on the RL. It also underlines the growing popularity of HOLL rape for its attractive combination of high gross output and extra premium-earning potential.
With 24,000ha (60,000 acres) in the ground for this harvest, the 2015/16 RL-topping variety, V316OL represents more than 4 per cent of the current winter OSR area, and HOLL varieties as a whole are estimated to have a share of 7 per cent of plantings – up from just 2 per cent in 2014/15.
“Again, this isn’t surprising with the modern generation of HOLL hybrids delivering gross outputs up there with the very best of ordinary ‘double lows’ in both trials and commercial practice,” reasoned David Waite. “So, even if HOLL premiums are not achieved, growers have a top performing ‘double low’ to market. And current premiums are adding around 100/ha to returns.
“Although we’re looking for a greater HOLL area to supply Cargills in the coming season, production continues to be confined to contracts,” he explained. “Equally, these will themselves continue to be restricted so that supply is balanced with the steadily increasing food industry demand for HOLL oil.
“This means that for the majority of growers maximising ‘double low’ oil percentages will remain the best opportunity for oilseed rape profitability gains through quality.”
In addition to careful variety selection for the best combination of yield and oil content (as measured by gross output) research and commercial experience highlight a number of agronomic opportunities to achieve oil contents of 47 per cent or more from winter OSR today.
“Sulphur deficiency has long been known to compromise oil contents as well as yield,” said David Waite. “At the same time, there’s good evidence that supplying more nitrogen than the crop requires for its canopy and yield can reduce oil levels sharply.”
Recent investigations also show that lodging will reduce oil contents by as much as 2.0 percentage points, while the best early flowering fungicide applications have been found to increase oils by between half and two thirds of a per cent.