Mustard a solid bet for prairie growers in 2014: analyst

Mustard is one of the few crops that has maintained prices into 2014.

Farmers can expect to see a fairly reliable market for their crops this year, Kevin Dick of All Commodities Trading said last week during the Saskatchewan Mustard Development Commission meeting at Crop Production Week in Saskatoon.

Dick said prices for brown mustard should remain in the 35 to 38 cents per pound range, as long as supply and demand remain in balance.

Yellow mustard’s spot price is about 35 cents per lb. and could remain there for the medium term, while oriental types will likely bring 31 to 32 cents per lb.

Mustard yielded well in 2013, with brown averaging about 1,100 lb. and yellow 900 lb.

“There is some talk of a few producers trying to move crop directly to end users in hopes of cutting out the middleman,” he said.

“There is a risk with that approach. French’s might get the idea there is a lot around or they could pay less. The price could go soft either way.”

Dick said there was little to no carryover last year, and by late August brown types were moving directly from the combine to waiting buyers. Demand has been good for the large crop, which was planted on 340,000 prairie acres.

Agriculture Canada’s December summary did not forecast a big increase in 2014-15 stocks.

Dick said producers with old crop should look to sell it before the new crop is harvested.

The higher than average yields in the 2013 crop should return to more typical levels this year, but Dick said mustard growers will likely increase acreage. As well, the crop’s solid returns will attract new growers.

Kevin Hursh, a grower who works for the mustard commission, isn’t expecting a big acreage jump.

“I was thinking more producers would be showing interest in the crop, but it seems so far that acreage might not leap up too high.”

Dick expects farmers to seed 425,000 to 450,000 acres this year.

“Combined with the average yields, we likely will see similar production to 2013, up maybe 15,000 tonnes, and shouldn’t push prices too low,” he said.

“We won’t have to buy or compete with other crops for acres this year.”

Unstable supply and demand in 2001-02 saw several mustard brokers leave the business after being caught with low priced sales and high priced mustard. At that time the harvested area had fallen to slightly more than it is today and yields were poor.

Dick cautioned growers about the perils of over or under production. He said much of the meat packing industry found alternatives to mustard after 2002 for their spiced prepared meats because of suddenly high prices and short supplies . They haven’t returned to the crop.

International production is difficult to predict. The key question is whether European Union countries will add acres this season. Some new members of the bloc were formerly significant mustard producers.

“As they enter the EU, they tend to stop growing mustard,” Dick said.

“Almost all is now grown in the Ukraine. They export about 15,000 tonnes of yellow and 2,000 of brown, down from a high of 10,000.”

France has grown the crop with limited success, and Ukraine has seen low yields. However, the threat of oversupply might come from one of the other emerging grain and oilseed exporting countries.

“If a Kazakhstan suddenly gets into it, then all bets are off,” he said.

North America remains the biggest buyer for the crop, mainly yellow for table and food industry use. Brown mustard is in demand in Europe, and the region has been producing less of it, so demand for the Canadian seed is rising.

Oriental mustard feeds a Japanese market. Traditional buyer Bangladesh is taking little of the crop because it typically looks for the lowest priced, lower quality product.

Dick cautioned growers to avoid fields where canola was grown because even one to 1.5 percent canola will turn a mustard crop from a 35 cent, No. 1 crop to a 15 cent sample grade.

That might keep a lot prairie farmers out of mustard, despite the need for a profitable crop in 2014, and add to the stability of the mustard market.

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