Canola is having more than just a moment in the spotlight. With demand for U.S. biofuels on the rise, more oil crops and organic materials, known in the industry as feedstocks, are needed to produce them. Canola is an oil crop with plenty of potential to help fill that void, and CHS is well positioned to help farmers who can grow it to diversify their cropping options.
Historically, the bulk of U.S.-produced canola oil has gone into the food industry, and that demand is expected to remain stable to slightly higher in the coming years, says Tony Roelofs, director of oilseed processing for CHS. “All of the canola oil processed at our Hallock plant in northern Minnesota is food grade. It is sold to customers like Ventura Foods, a CHS joint venture with Mitsubishi & Co., to make salad dressings, sauces and frying oils. But going forward, the biggest increase in demand for canola oil is expected to be for use in biofuels production, which CHS is also well positioned to supply.”
Canola acres on the rise
| Year | Total U.S. acres planted |
| 2026 (projected) |
2.69 million |
| 2025 | 2.34 million |
| 2024 (all-time high) |
2.75 million |
| 2023 | 2.34 million |
| 2022 | 2.20 million |
| 2021 | 2.15 million |
| 2020 | 1.82 million |
Source: U.S. Canola Association
In March of this year, the U.S. Environmental Protection Agency (EPA) issued final Renewable Fuel Standard volume obligations for 2026 and 2027, requiring the use of 25.82 billion gallons of renewable fuels this year and 25.98 billion gallons next year. The established volumes include a 60% increase in biomass-based diesel blending, which is expected to increase demand for soybean and canola oils, says Andy Smith, CHS commodity trader for canola.
“The current global energy challenges we face only emphasize the value of producing more energy domestically, and biofuels have become an important energy segment that continues to grow here in the United States,” he says. “Canola oil has a part to play in that growth. We’re seeing it in the continued growth of canola crush volume.”
The USDA estimates the U.S. canola crush will hit a record 5.2 billion pounds for the 2025-26 marketing year, which is up from 4.9 billion pounds in 2024-25. U.S. canola acres have been trending higher over the past five years, adds Smith. “On average, there’s been an 8% increase each year.”
Canola acres hit an all-time high of 2.75 million acres in 2024, dropped back to 2.34 million acres in 2025 and could be back up to 2.69 million acres this year, based on the latest USDA Projected Planting estimates.
Feeling the biofuels boom
“Canola offers some unique benefits over the dominant biofuels crops of corn and soybeans,” explains Ron Batey, senior director, refined fuels economics for CHS.
Canola seeds contain about 40% oil, compared with roughly 20% oil for soybeans, meaning a bushel of canola produces twice as much oil as a bushel of soybeans. That higher oil yield makes canola an efficient and versatile feedstock for biofuels, including renewable diesel, which performs much like conventional diesel.
Expanding crush capacity
Anticipating this increased demand of canola oil back in 2015, CHS purchased a plant near Hallock, Minn., which is one of the largest canola processors in the country and crushes around half a million metric tons of canola annually. “The plant takes in canola year round, with some crop being imported from Canada,” says Roelofs. “Canada currently grows ten times more canola acres than U.S. producers do, but we originate as much U.S.-produced canola as possible and hope to see that amount increase as U.S. acres grow.”
Some of that potential growth is likely to occur in North Dakota and Minnesota, which currently lead the country in canola production, he says. “But we could also see increased acres in Montana, Idaho and Washington.”
Agronomically, canola is a good crop to add to a rotation, says Smith. “It can help to break up pest and disease cycles, and input costs for canola are typically less than corn and comparable to wheat.”
From a marketing standpoint, he says canola has transitioned from specialty crop to cash crop in recent years. “We have forward contracts, basis contracts and hedge-to-arrive contracts for it. We also take plenty of spot deliveries at harvest. Selling canola is now no different than marketing corn or soybeans.”
Making use of the meal
When the seeds are crushed, they leave behind canola meal, which has found a good market with large dairy producers, especially in Wisconsin, Texas, New Mexico and California, explains Roelofs. “Canola meal has a lower protein content (36%) than soybean meal (46%) and a different amino acid profile, but with 10% fiber versus 3.5% in soybean meal, canola meal is a good fit in ruminant rations.”
“Canola growers we work with not only get value from the crop they grow but also the added value of our crush operation,” says Smith. “CHS will work to find the most profitable end market for the oil, whether it be food or fuel, to maximize our processing margins, then pass it back to the grower through patronage.”
“Canola stands out as having promising profit potential,” adds Roelofs. “And CHS provides expertise and resources for growers, from access to seed and help with agronomics, to marketing and processing.”
