The price outlook appears promising for some of Canada’s special crops, says an analyst.
Marlene Boersch, managing partner of Mercantile Consulting Venture, is forecasting tight canaryseed ending stocks in 2020-21.
“I would say that the price outlook is fairly firm. It’s certainly not an oversupply situation,” she told delegates attending the Canadian Special Crops Association’s virtual annual conference.
Her mustard forecast was similar.
“We probably need a very good price picture for the second half of the crop year in the hope to rebuild acres in the coming year,” said Boersch.
She was less certain about sunflowers, but one of her fellow panelists indicated there was strong demand for the crop due to a new COVID-19 pastime.
Bird-watching has suddenly become the second largest hobby in North America behind gardening because of forced confinement.
Birdseed demand dried up in the initial stages of the pandemic as stores such as Walmart deemed it a non-essential product.
They were focused on stocking the shelves with toilet paper, hand sanitizer and bottled water.
However, everything changed in May as grocery retailers discovered there was mounting demand for birdseed.
They were seeing 50 to 100 percent more demand for the product, said Robert Deraas, general manager of Scoular Canada’s sunflower division.
“There was a great pull from the market to stock those shelves,” he said.
As of mid-September manufacturers still hadn’t caught up with all the new demand.
Deraas said the small group of dedicated farmers who grow the crop are seeing “good rewards” for their product.
Boersch had penciled in a six percent decline in Canadian sunflower exports, but that would be offset by a four percent drop in supply.
She pegged ending stocks at 95,000 tonnes, unchanged from last year.
Her canaryseed forecast calls for a 10 percent increase in production to 171,000 tonnes. However, supply will only rise four percent to 178,000 tonnes because of low carryout from the 2019-20 crop.
She believes current prices of around 31 cents per pound have finally lured in much of the “hidden” old crop supplies from years ago.
Carryout at the end of 2020-21 is expected to be a paltry 13,000 tonnes.
Kyle Ulmer, grain merchant with Viterra, was asked if this is the year canaryseed prices hit 40 cents.
“The fundamentals tell you that,” he said.
“It feels like we just kind of grab on and hold on for the ride.”
But he noted that canaryseed statistics are notoriously wonky. Around this time last year Statistics Canada was forecasting 70,000 tonnes of 2019-20 production. About one month ago it revised that estimate to 175,000 tonnes.
Mercantile Consulting is forecasting 113,000 tonnes of mustard production, a 16 percent increase over last year. Supply is pegged at 176,000 tonnes, up 18 percent.
Ending stocks are forecast at 20,000 to 35,000 tonnes. That is low and it’s why her outlook is for firm prices.
Ulmer said grocery demand for mustard in the form of sauces, dressings and condiments spiked during COVID, but that has been more than offset by slumping food service demand for the commodity.