The move's been prompted by concerns their main customer, Biodiesel New Zealand, isn't maximising the value of the product.
"They dropped the price offered to us this autumn when international prices are rising," says group leader and crop pioneer, Jeremy Talbot. "Some growers have pulled out, others have reduced area. But it's a crop that's got huge potential."
In his own case the $700/t contract offered this autumn, down from $770/t last year, has prompted him to halve his area.
"I was considering 80ha, compared to 100ha last year. Now I'm thinking it will be 40ha or less."
Talbot says Biodiesel New Zealand is now focussing on the cooking oil market, rather than fuel, which is welcome because it's a higher value market.
However, he's concerned Biodiesel isn't capitalising on the New Zealand crop's attributes which could allow it to command a substantial premium over imported canola oils.
"It's guaranteed GE-Free, which you can't say about any of the imports, and cold-pressed which means there are no residues of hexane or other solvents used overseas.
"Another thing we can do, which most Australian, US, and Canadian crushers can't do, is guarantee there haven't been any peanuts or other allegenics put through the plant."
Federated Farmers Grain chairman in South Canterbury, Colin Hurst, also says it's good to see Biodiesel New Zealand moving into the food oil sector.
"It will be worth more. The fuel thing's been struggling."
While it's only a small part of his cropping rotation – with irrigation small seeds contracts are generally a better option – for some growers it's a good fit, at the right price.
"It's another option and there's real market potential there. We import quite a bit of food oil. If we can replace it with domestic product and get import parity or better then that would be great."
Biodiesel New Zealand Agri-business manager Nick Murney was unable to be contacted before this article went to press.
In a letter to growers noting their concerns about the drop in price earlier this autumn, he said it was due to the price Biodiesel could sell its products – meal and oil - in the market.
Low pump prices for diesel and the end of the Biodiesel Grants Scheme on June 30, which had subsidised the fuel to the tune of 42.5c/litre, meant the market focus would now be the food sector.
Talbot sympathises with Biodiesel's management over the end of the subsidy scheme and lack of certainty they've been given.
"They've constantly been changing the rules and now they're looking to sell state assets, [Solid Energy subsidiary] Biodiesel's been hung out to dry."
