Canaryseed sales could soon suffer from a case of avian flu, warns a special crops market analyst.
There are early indications the hysteria over avian influenza may cut into pet bird sales, said Brian Clancey, editor of the Stat Publishing newsletter.
“From that perspective there is a potential for a spillover impact into the birdseed industry over the longer term,” he said.
The much talked about health scare prompted North America’s largest pet product retailer to take steps to quell consumer fears.
PetSmart Inc., which operates a chain of 800 pet superstores in Canada and the United States, posted an avian influenza fact sheet in all of its stores assuring customers the risk of pets or humans contracting the Asian borne H5N1 virus are minimal.
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The company told shoppers that PetSmart birds are quarantined at least 17 days before being made available to the public, which is seven days longer than the incubation period for avian flu.
Other stores have followed suit, which is making birdseed packagers nervous, said Clancey.
If there is a threat to canaryseed markets, it hasn’t appeared yet, said Steve Foster, special crops trader with Saskatchewan Wheat Pool.
“Any of the markets that I’ve gone to, and I guess I’d be one of the bigger sellers, I haven’t seen it as an issue at all.”
Foster sells canaryseed into Mexico, Europe, Asia and North America. The only place he has encountered an avian flu concern is in Taiwan, but the customer still imported container loads of the crop.
Elsewhere, it is not an issue.
“I just got back from a trip to Europe and it wasn’t even mentioned over there. I brought it up and they said, ‘no, it’s not even an issue.’ “
Of bigger concern to growers should be prices that are approaching record lows, said Foster.
A year ago, canaryseed producers scoffed at analysts who told them to jump on offers of 12 cents per pound for their crop.
The going rate today is 8.5-nine cents per lb. with many in the trade predicting it will fall as low as eight cents before the new crop is planted, said Foster.
He can’t see anything that would take prices beyond 9.5 cents due to burdensome supplies.
There will be as much leftover canaryseed exiting the 2005-06 crop year as there was entering it, which is equal to a full year’s worth of exports.
Despite a 46 percent decline in seeded acreage, production fell by only 25 percent due to higher than normal yields, resulting in a 227,000 tonne crop.
With 170,000 tonnes of carryover from last year, that leaves exporters with nearly 400,000 tonnes of crop to move, according to Statistics Canada.
At the moment markets are stagnant.
“Anybody that needed movement and cash have already done it,” said Foster.
The crop can be stored for up to 10 years so producers tend to hold on to supplies, waiting for some type of crop wreck.
In the meantime, the only factor that will kick-start trade is storage space.
“If (farmers) need bin space they’ll maybe blow some canary out and pick up what’s on the ground and put it in the bin,” said Foster.
With many farmers playing the long-term speculation game, Clancey thought it was important to point out the avian flu scare may become a bigger market factor down the road.
“It’s not that you can say that it is having an impact on the markets today but you ought to consider the possibility that it might in the future,” he said.
Meanwhile, there isn’t much action on the demand side either, with buyers waiting for prices to drop. They know that Canada, which produces 90 percent of the world’s canaryseed, is sitting on a few years’ worth of supply.
According to analysts there isn’t much relief on the horizon. Clancey has forecasted 447,000 acres of canaryseed in 2006, a modest six percent decline from 2005 levels.
Foster agreed with that assessment. He said canaryseed fits well into existing rotations and even at current prices it delivers $4.50-$5 per bushel, which outperforms wheat and durum. Plus it is cheap to grow, stores well and yielded 40 bu. per acre for some farmers last year.
