Contracts For Rapeseed Offered

Winston-Salem based company wants growers for oilcrop.

Published on: Jun 28, 2011

Technology Crops International is currently in the processing of preparing contracts that the company's management intends to offer North Carolina farmers to grow rapeseed.  Rapeseed is an oilseed crop that can be crushed and the oil used for a variety of industrial uses, including what is probably its most popular use, a slip agent or coating for plastic bags at checkouts in retail stores. The erucic acid coating from the rapeseed keeps the plastic bags from clinging together.

The Winston-Salem based company is also looking into rapeseed as a resource for biofuels production, particularly for military use. The military currently has a mandate to use a certain amount of biofuel in its operations, but the government has also stipulated that the military cannot use biofuel made from a product that can produce food or feed. That puts corn and soybeans off the list but opens the way for products like rapeseed.

Contracts may also be offered to farmers in Virginia, South Carolina and West Virginia, depending on farmer interest and whether delivery points there can be organized and set up this year. The company has already established delivery points in western North Carolina and contracts for delivery points in the eastern part of the state are in the late stages of being finalized.

TCI grower relations manager Jeff Riddle says the company plans to contract 10,000-20,000 acres of rapeseed in North Carolina. The contract price was not finalized at the time this story was written; the company is currently making final decisions on whether to offer flat price contracts or to base the contract price on wheat prices.

"We typically have been paying about a 20% premium to the net revenue on wheat," Riddle says, "after all the farmers' input costs. We've been trying to get a feel for where the market is going in wheat because we are going to base our pricing off of the wheat."

The rapeseed crop year is very similar to winter wheat.

"Our target market (for contract growers) is winter wheat growers that are interested in something they can double crop with soybeans," Riddle says. "Planting dates are usually a minimum of six weeks before your first killing frost, so in North Carolina that is usually mid-September to mid-October. Then it comes off in early May or early June. One of our growers has told us it actually comes off a little earlier than winter wheat, so it allows growers to get back into their soybeans a little earlier."

The company has been investigating the crop in North Carolina for a couple of years. They have had two years of research plots for the rapeseed crops and this year had two North Carolina growers produce crops for them on an experimental basis. The company expects growers here will be able to be able to produce around 2,200-3,200 pounds per acre, based largely on seeding rate. That was the range of results in the first year of tests in research plots at the Tidewater Research Station in Plymouth, N.C., in 2010. Harvest data will soon be available for 2011 but had not been compiled by the time this story was written. One North Carolina grower, John Hart of Bolton, N.C., has harvested his rapeseed crop for TCI this year. His crop came in at 2,653 pounds per acre.

Riddle says the company contracts will offer some additional features that he thinks farmers will like. All the company's contracts have full Act of God coverage at no cost, he says.

"That means that if a grower grows our crop and he gets a hail out or a flood out and it destroys that crop, he doesn't have to go buy that crop on the open market to fulfill his obligation or contract with us. Once it is verified that his crop was destroyed, his obligation to TCI is gone. He is out of that, so it minimizes his liability or risk."

Riddle also points out the contracts are full production. The entire production is covered under the Act of God coverage, not just some part of it as can be the case with some insurance coverage.

TCI is a well-known company that has been in business under its current name for 10 years. Riddle notes the company's current owners purchased the company from Kings Incorporated, a part of British conglomerate Associated British Foods or ABF.

The company produces products from a number of oilseeds including high oleic sunflower, calendula, echium and others. The company services a variety of industries with their various crop products, including the pharmaceutical, neutraceutical, cosmetic, industrial and food industries.

Find out more about the company and the products they manufacture by going to http://techcrops.com/.