U.S. canola use is forecast to climb sharply in the 2026-27 marketing year, supported by record domestic production, expanding crush capacity and rising demand for canola oil in biofuel manufacturing.
According to the USDA's latest Oil Crops Outlook, total U.S. canola usage is projected to increase 16% from 2025-26, while domestic crushing is expected to rise 11% to 2.4 million tonnes.
The stronger crush outlook reflects growing domestic demand for canola oil and meal, which has supported processing margins. A new crushing facility is also expected to be completed during 2026-27, adding to U.S. processing capacity.
Meanwhile, U.S. canola oil use in biofuel production is forecast to surge to 2.54 million tonnes, up from 1.68 million tonnes last year, an increase of more than 50%.
The USDA attributed the growth partly to stronger renewable fuel mandates for 2026 and 2027, along with new eligibility for the 45Z clean fuel production tax credit for biomass-based diesel made from North American canola oil.
Canola oil use for food, feed and other industrial purposes is also expected to increase 4% to 2.22 million tonnes.
On the supply side, U.S. canola production is forecast at a record 2.45 million tonnes, driven by expanded acreage despite an expected 10% decline in average yields.
North Dakota, the leading producing state, planted 2.33 million acres, up 29% from last year. Acreage also increased in Minnesota, Montana, Washington, Oklahoma and Kansas, encouraged by favourable returns compared to other crops.
U.S. canola exports are forecast to increase to 408,000 tonnes, with first-quarter shipments reaching 129,000 tonnes, up 77,000 tonnes from a year earlier. Stronger shipments to Mexico and the Netherlands accounted for much of the growth.
