Canaryseed stocks questioned


David Nobbs choked on his Halloween chocolate bar when discussing Agriculture Canada’s hard-to-swallow 2011-12 canaryseed carryout figure.

“That number is completely, completely incorrect,” said the general manager of Canpulse Foods after dislodging the treat.

Agriculture Canada estimates there were a paltry 17,000 tonnes of ending stocks of the birdseed as of July 31.

Nobbs believes exporters shipped 15,000 tonnes of old crop canaryseed in August and September, which would have nearly depleted those stocks.

However, that doesn’t account for what companies have in their inventories and what growers are storing in their bins. Some farmers have canaryseed dating back 10 years or more.

“I don’t doubt we’re getting down on our stocks, but I would bet at July 31 it’s 30,000-plus, maybe 40,000 tonnes,” he said.

Nobbs estimates 25,000 to 30,000 tonnes of the birdseed are sitting on farms.

“We just didn’t clean the canaryseed crop down to zero with a 23 cent price in July,” he said.

“You’ve got growers that no matter what price the market goes to, they’re sitting on it until it hits 40 cents come hell or high water.”

Agriculture Canada’s carryout estimate drops even further for the 2012-13 crop, down to a meager 5,000 tonnes, which is a four percent stocks-to-use ratio.

“If you look at the S & Ds (supply and demand), really we should be at 40 cents right now, there’s no ifs, ands or buts,” said Nobbs.

However, he doesn’t have much hope for prices rising much higher than the current 27 cents per pound level because of slumping demand and increased competition.

“I just don’t see prices over 30 cents regardless of supply,” said Nobbs.

Stat Publishing analyst Brian Clancey isn’t so sure about that.

“I don’t think canaryseed prices are going to go down. It’s completely up to farmers what happens with the price of canaryseed,” he said.

Clancey said prices could climb higher than 30 cents if growers cut back on acres and hang onto what’s in their bins.

However, he too is skeptical about Agriculture Canada’s 2012-13 carryout estimate of 5,000 tonnes.

Clancey is forecasting 15,000 tonnes of carryover next summer, which is a 12 percent stocks-to-use ratio. That’s because he isn’t as optimistic about 2012-13 exports, forecasting 108,100 tonnes of shipments versus the government estimate of 125,000 tonnes.

“There is competing production coming on in other parts of the world, so that’s eroding our market. The higher prices are not necessarily helpful (either),” he said.

Sales to Mexico are way down because of the country’s ongoing phytosanitary constraints surrounding unwanted weeds. Exports through the first 11 months of 2011-12 were 19,918 tonnes, down 65 percent from the same period the previous year.

“We’re missing that strong ongoing demand from Mexico, which used to be there. And that’s a big problem for canaryseed,” said Clancey.

Nobbs said the faltering demand extends beyond Europe and Mexico. It is also falling in Brazil and the United States, and he doesn’t know why.

“I’m not sure what is being fed to these birds but it doesn’t seem to be canary. I don’t know if anybody has a real true handle on why our demand is dwindling.”

He believes part of the answer is the stronger Canadian dollar. As well, competition is increasing from Hungary into the European Union and from Argentina into Brazil.

Nobbs said the Mexican situation hasn’t changed. His plant is processing half of what it normally does because meeting Mexico’s stringent demands is more time consuming.

He hopes Mexico’s new government will be amenable to easing the phytosanitary restrictions, but he isn’t holding his breath.

Respond





You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>