No one seems to have a good grasp on the state of the prairie
canaryseed crop.
Guesses range from troubled to recovering.
That means new-crop prices could be as good as this year’s record
prices, lower, or higher.
“The jury’s still out,” said Bob Lafond, the canaryseed expert for the
firm Roy Legumex.
“A lot of people are nervous about the crop.”
Statistics Canada surprised many people with its finding that prairie
farmers planted 705,000 acres of canaryseed this spring.
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That’s well above average acreage and, with average yields, would weigh
down prices.
But the government report had little impact on spot prices. Two weeks
after it was released, canaryseed could be sold for 30.5 cents per
pound.
Most of Canada’s canaryseed, and therefore the world’s canaryseed, is
grown near Rosetown, Sask. It’s the centre of an extremely dry area and
the crop is suffering, which brings the possibility of good prices for
any producer who gets a decent crop.
“We’ve never seen two years in a row of strong canaryseed prices, but
this could be the year for that,” said Lafond.
Brian Clancy of Stat Publishing said a short crop will allow prices to
stay above 30 cents a lb. In 2001-2002, the price averaged 33 cents.
Clancy said average prairie yields of 544 lb. per acre would produce a
crop big enough to meet export demand and make up for some lost sales
from this year. That would probably keep prices near 30 cents per lb.
Last season’s average yield was 556 lb. per acre, but the crop was
short because fewer acres were grown.
If the average yield drops below 544 lb. prairiewide, or 500 lb. in
Saskatchewan, prices would likely rise.
At 300 lb. per acre, farmers would need to make 37 cents per pound to
cover their costs of $110-120 per acre and lock in a small profit.
Farmers would need more than 35 cents per lb. just to break even
Clancy said the large acreage means a lot of producers each have a
little crop. At 300 lb. per acre, 100 acres would not be enough for one
truckload, so producers would probably demand high prices to make it
worthwhile to ship to market.
Clancy thinks the best this year’s crop can do is reach 90 percent of
long-term yields.
That means a prairiewide average of 794 lb. per acre. The five-year
average is 900-1,000 lb.
If the crop reaches 700 lb., Clancy expects farmers would hold back
supply to drive prices up. But knowing there is lots of supply out
there, farmers would sell into rallies, keeping prices from rising too
high.
Buyers would hold back until supplies began to flow to lower bids. But
Clancy said a 700-800 lb. per acre crop is the top end of what’s
possible this year.
“I don’t believe it can come back enough (for an average crop).”
He said as long as the crop limps along, good rains could raise yields.
Lafond thinks many crops in the Rosetown area are already past the
point of saving:
“I think in that area it would be too little, too late.”
Lafond said the strong summer prices are clearing out canaryseed stocks
across the Prairies.
Clancy said the strong movements and prices in the face of bearish
Statistics Canada acreage numbers, shows that buyers are worried.
“People are unleashing at these prices but markets aren’t coming off.”
