Production contracts above 30 cents per pound should make confection sunflowers one of Manitoba’s most profitable crops this year.
Confecs were priced 10 cents higher than black oil sunflowers in the third week of January, said Mike Durand, sales and purchasing manager with Nestibo Agra, a sunflower processor in Deloraine, Man.
Old crop confectionary sunflowers were selling around 30 cents per lb. and old crop black oils were at 19 cents per lb. Contracts for new crop confecs were approximately 30 cents per lb. and black oils were 20 to 22 cents per lb.
It is a significant price gap relative to historic variances, said Ben Friesen, commodity purchasing manager with Keystone Grain, a special crops processor in Winkler, Man.
“Traditionally, we’ve never had more than a five cent difference,” Friesen told Manitoba Ag Days in Brandon. “Now we’re sitting at a solid 10 cents.”
Manitoba farmers have taken notice of the price gap and want to grow confectionary sunflowers again, he added.
“There are guys coming back into the sunflower growing market that haven’t grown sunflowers for five or six years,” Friesen said.
“They’re looking at the crop chart…. At 32 cents (per lb.), confecs pencil out really well.”
Sunflower production in the United States was down 27 percent last year from 2012, according to the U.S. Department of Agriculture. It was the smallest harvest since 1989.
An extremely wet spring in North Dakota, which dominates U.S. production, prevented growers from seeding sunflowers last year.
Statistics Canada reported that Manitoba growers planted 70,000 acres of sunflowers in 2013, down from 100,000 in 2012.
The lack of acres has created a shortfall of confectionary sunflowers and driven up prices, Friesen said.
“We’re going to run out of them this year. By the time the new crop comes around, the confecs will be all cleaned up.”
Keystone had little trouble filling its acreage quota for confecs in 2014, when it offered new crop contracts at 32 cents per lb.
“Our confection contracts are already filled up,” Friesen said.
“We’re already maxed out on the confection contracts.”
Argentina’s sunflower harvest, which takes place in late February and early March, will dictate confectionary prices for the rest of this year.
“If Argentina has a huge crop, it’s really going to hit the sunflower market,” Friesen said.
“If they have a crop, they don’t hold it. They blow it out. They don’t care about the prices. They’ll drop the world price.”
Durand said a weakening market for canola and oilseeds this winter dragged down the price of black oil sunflowers, which have become more popular with Manitoba growers.
Manitoba farmers have historically planted more confec sunflowers than black oils, but price differentials between black oils and confecs were narrow in 2012 and 2013 and black oils were sometimes higher.
Provincial acreage has been evenly split in recent years, but confecs are poised to reclaim their old status, Friesen said.
“We’re going to go back to where confecs will be higher (in acreage).”
Friesen expects Manitoba sunflower acreage to top 100,000 this year, which would be similar to 2012.