New plant protein projects open up opportunities

Investments should benefit farmers down the road

Proteins and starches are the end game, says Bill Greuel, PIC’s chief executive officer. For too long, Canada has been selling commodities and buying back end products. The types of investments being made will change that, he adds.

On November 10, 2020, Protein Industries Canada (PIC) announced its 12th major new plant protein partnership project. The six-partner, $25.7 million tech-innovation effort is PIC’s sixth major project announcement in the last five months alone. Together, the 12 projects add up to an impressive $272 million investment in Canadian agriculture since PIC formed in November 2018. While the investment is good news for agriculture as a whole, individual farmers will have to wait and see how they can engage directly with these and future PIC projects.

Additional processing capacity creates new markets and may result in higher returns to producers. Also, more processing kept in Canada could mean less trade disruptions in export commodities.

“No one is sitting on the other side of the world eating a handful of dry peas grown in Western Canada. Peas are not the end game — proteins and starches are the end game. For far too long we’ve been selling commodities and buying back end products. These kinds of investments start to change that,” says Bill Greuel, PIC’s chief executive officer. “The work that is happening and the momentum that’s building is positive for the whole value chain, including farmers.”

PIC is an industry-led, not-for-profit organization created as the home and operational centre of the Protein Industries Supercluster, a five-year strategic investment by the federal government. PIC aims to leverage just over $150 million of federal funding with at least as much from the ag industry. By co-investing alongside private sector and industry partners, PIC’s goal is to support and grow business opportunities for plant-based proteins across the Canadian Prairies. Ultimately, PIC is working to position Canada as a global source of high-quality plant protein and plant-based co-products.

PIC investments span four major areas: improving plant genetics through plant breeding, growing digital information and data technologies that improve traceability and on-farm efficiency, supporting processing technologies and meeting consumer needs, both by developing consumer-packaged goods and building a better understanding of markets.

From a financial perspective, additional processing creates new markets and could mean higher returns to producers. That’s obviously very good news for farmers, as is the fact that more processing facilities will mean a shorter crop transport distance for some farmers. Also, the more processing we can keep here in Canada, the less global politics will impact Canadian agriculture, Greuel adds.

“Every pulse and canola producer knows full well how trade disruptions can impact them. Just look at our canola going to China; our pulses to India. The more processing we can do here at home, the less likely we are to suffer trade disruptions in export commodities.”

From a production standpoint, the investments will affect individual farmers down the road, says Greuel.

“I don’t know that today things look any different (for individual farmers). However, as we add more processing capacity here at home in Canada, farmers will notice a difference. Farmers will have the opportunity to access new markets here in Western Canada. No longer will they be reliant on shipping commodities to overseas markets, making them subject to trade barriers, transportation delays, et cetera. With increased processing, we will focus on utilizing the high-value commodities we produce and create new products from them here in Canada.”

There are also opportunities for leading-edge farmers to capture new opportunities by tailoring production to specific processors’ unique needs.

“If I were to fast-forward five or 10 years down the road, we’re going to have a much more developed (plant protein processing) ecosystem, and that will impact processor-producer relationships,” says Greuel.

For example, PIC is currently funding a research project into which pea varieties are most efficient for processors, and how agronomics impact that efficiency. Once processing companies have a better understanding of how agronomics impact their specific processing needs, they’ll be looking to contract individual producers under specific production guidelines.

“I think there will be tight linkages between the varieties producers grow, the specific ways they are grown, and the applications for which they are ultimately used,” says Greuel. “More and more processing facilities are going to be going to producers and saying, ‘We want this variety treated this way.’ It might be a specific seeding date, a certain fertilizer regime, a certain kind of pesticide used or not used.”

Meeting a processor’s unique requirements will likely bring a production premium. However, to capture that premium, producers will have to shift from a commodity production mindset to thinking about customer-specific, tailored production.

“Farmers need to be thinking about their relationships with processors. Lots of farmers are doing that today and I expect it will be more and more important in the future,” says Greuel.

Farmers aren’t just standing by and waiting for processors to call the shots — some are already actively engaged in making change happen.

“I would encourage producers to look at the projects PIC has already funded. We have a surprising number of primary producers engaged directly in the projects we’re funding. That’s exciting to see and really speaks to the value chain approach we’re taking,” says Greuel.

Much more opportunity lies ahead.

“We’re starting to get a global reputation as a place where things are happening. That will only continue to grow,” says Greuel. “If a decade out we’re processing an additional 10 to 15 per cent of our production, that’ll be a good day for us. That’s over 10 million metric tonnes of (additional) processing capacity. I think the trends are there. I think we’re just at the tip of the iceberg right now.”

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