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Matt Bewley, Published January 15 2009

Canola crushing plant shuts down

GRAND FORKS, N.D. – The Northwood Mills canola crushing plant has temporarily shut down operations because of poor demand in the canola oil market, according to plant manager and co-founder Clarence Leschied.

About 20 employees were laid off, Leschied said, adding he hopes to get them back to work as soon as possible.

The plant, which first began operations as a soybean crushing plant in July 2007, switched to canola beans last spring because of reduced demand for soybean oil in the Canadian hog industry and the U.S. biodiesel industry. At the time, overall U.S. biodiesel production was running at 25 percent capacity.

The Northwood plant had been crushing canola at half capacity for several weeks when low canola demand halted operations.

Oilseed crushing also is closely tied to petroleum demand, said Darin Newsome, a senior market analyst for DTN.

“Heating oil and gasoline are well off due to this overall lack of demand for petroleum products, and it is affecting … biodiesel and its demand for all these vegetable oils,” he said.

Newsome said he thinks the canola market could rebound as soon as February.

The Grand Forks Herald and The Forum are both owned by Forum Communications Co.