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Monsanto boosts investment in Canada canola

* Opens canola breeding center in Winnipeg

* Sees opposition firm in Canada to GMO wheat (In U.S. dollars unless noted)

WINNIPEG, Manitoba, Nov 24 (Reuters) - Monsanto Co MON.N has raised its spending on canola research and development to between C$20 million and C$30 million ($19.8 million to $29.7 million), roughly the same investment the company puts into wheat, the president of its Canadian operation said.

Acreage and production of canola, Canada’s No. 2 crop after spring wheat, have expanded in the past decade amid strong global demand for vegetable oil and big profits for farmers.

The oilseed’s steady rise has drawn the attention of Monsanto, the world’s largest seed company, which on Tuesday opened its C$12 million canola breeding center in Winnipeg.

“It’s a very large crop for this company,” said Derek Penner, president of Monsanto Canada.

Spending to improve canola yields remains a high priority, along with seeking greater resistance to the fungal disease blackleg, Penner said. China has restricted imports of Canadian canola with blackleg.

With such seed research investments, Canada canola acres may soon match, but are unlikely to surpass, plantings of wheat because of the need to rotate crops, Penner said.

Canola’s expansion is more likely to happen through higher per-acre yields and additional acreage in the northern United States, Penner said.

The fact that canola is so profitable for farmers is a key reason seed companies are investing in it, said Agriculture Minister Gerry Ritz in an interview.

“Canola is king. It is the best cash crop for producers.”

Roundup-Ready canola, offering tolerance to Monsanto's top herbicide, makes up by far most of the company's sales of canola seed as the company competes in Western Canada against Bayer BAYE.BO and Dupont's DD.N Pioneer Hi-Bred unit.

ICE Canada canola futures <0#RS:> have soared by one third year over year on export demand, expansion of Canadian crush capacity and weather-related crop problems.

Canada is the world’s third biggest producer of canola/rapeseed, which is crushed for its oil for use in cooking and its meal for livestock feed.

Monsanto’s canola spending, however, is a fraction of its annual investment in corn ($400 to $500 million) and soybeans ($200 to $300 million), which reflects their greater acreage.

Growth in spending on cereal crops like wheat, barley and oats has lagged further behind.

“It has a lot to do with the investment in genetics and biotechnology and the lack of moving toward those investments,” Penner said.

The grain’s importance to feeding both humans and livestock hardens resistance to genetic modification of those crops, while farmers have long planted GMO corn, soybeans and canola.

A small group of protesters stood outside Monsanto’s new canola center on Tuesday, raising concerns about GMO canola cross-breeding with non-GMO crops.

Monsanto said this month it could start field testing GMO wheat within one to two years, but remains cautious about future commercialization. [ID:nN04277740]

In Canada, there is little evidence of a change in opposition to GMO wheat, Penner said, with the Canadian Wheat Board worried about lack of acceptance from export markets.

“My impression is there hasn’t been too much of a shift towards GMO wheat,” Penner said. “It’s still a difficult situation and we need to make sure we prioritize how we spend our research and development dollars.”

$1=$1.01 Canadian Editing by Jim Marshall

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