Markets are sunny for Manitoba’s sunflower crop

Planted acres have been declining over the past decade, while prices and yields have both pushed higher

Manitoba sunflower growers didn’t reap a bumper crop this year, but the industry is well positioned for growth because acres are on the rise and yields this fall were decent.

Troy Turner, National Sunflower Association of Canada agronomist, said most producers were satisfied with the oilseed’s performance in 2015.

“With (rain) and the humidity we had, we did see a few different diseases that we don’t normally see,” Turner said from his office in Carman, Man. “Overall we’re fairly happy with what we’ve seen…. The yields are a nice average yield. I think we’ll be over 2,000 pounds (per acre).”

Manitoba sunflower acres have declined over the last seven to 10 years, falling from 190,000 in 2006 and 2007 to 70,000 in 2013 and 80,000 last year.

Turner said seeded acres were around 104,000 this year, with about 75 percent of the acres in confectionary sunflowers and the remainder in black oils.

Before the growing season, processors were offering production contracts around 24 cents a pound for black oils and 28 cents for confectionary.

The higher price encouraged more confectionary acres in Manitoba, but the logistics of selling black oils is also a factor.

“We don’t have a (sunflower) crush plant here in Canada,” Turner said.

“To load your oilseed sunflowers on a truck, to go to crush, the closest is probably Fargo…. For a lot of guys, it just doesn’t pencil out.”

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Most Canadian black oil sunflowers are sold into the bird food market, which was strong this fall. Retailers are stocking up for the winter bird feeding season.

However, the market for confectionary sunflowers isn’t as robust.

The chaos in Syria and Iraq and the refugee crisis there have disrupted demand in the Middle East, a major market for confectionary sunflowers.

“Right now (the) confec market is definitely soft…. All the companies… we’re not moving as much as we usually do to the Middle East,” said Ben Friesen, purchasing manager for special crops with the Scoular Company, which recently bought the special crops division of Legumex Walker.

“You don’t have buyers for it right now (in the Middle East). They’re worried about other things than filling warehouses with sunflowers right now.”

On the positive side, Manitoba sunflower growers are benefitting from the US75 cent loonie.

“You get a Canadian sunflower price of approximately 28 cents (a lb.) versus a U.S. price of 20 cents,” Friesen said.

“The Canadian grower, if they didn’t have that exchange difference right now, it would be really tight on making any margin at all.”

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Turner said growers and the sunflower association are curious to see how Scoular will affect sunflower production in Manitoba now that is owns the assets of Legumex Walker.

Scoular is a 123-year-old private company based in Omaha, Nebraska, with nearly $6 billion in annual sales.

Friesen said Scoular’s size and reach in the grain trade should be helpful for Manitoba’s special crops industry.

“With the strong company we have behind us now, it will firm everything up and make a better business for everyone involved.”

In late November, Scoular said nearly all the 300 plus employees of the former Legumex Walker special crops business, including the management team, joined Scoular and will continue to work at the existing locations.

“The same people that are doing business with (Canadian) growers right now will continue to do business with the growers,” Friesen said.

“It’s business as usual.”

What did Scoular buy?

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Scoular finalized its purchase of Legumex Walker’s special crops division last month for $94 million. The deal was valued at $174.6 million, including Legumex’s working capital. Scoular now owns Legumex’s former special crops operations, including:

  • The sunflower, flax and bird food division, which has primary and secondary processing plants in Winnipeg, Winkler and St. Jean Baptiste, all in Manitoba, and a plant in Mentor, Minnesota. Aggregate annual processing capacity is 141,000 tonnes.
  • The edible bean division includes primary processing plants in Morden, Man., and Plum Coulee, Man., St. Hilaire, Minn., and Tianjin and Dalian in China. Aggregate annual processing capacity is 106,000 tonnes.
  • The pea, lentil and canaryseed division has primary and secondary processing plants in Runciman, Brooksby, Saskatoon and Regina in Saskatchewan and a plant in St. Jean Baptiste, Man. Aggregate annual processing capacity is 275,000 tonnes.