No one knows how much flax farmers have in their bins, which is creating a weird supply and demand situation.
“It’s hard to plan too much,” said Brian Johnson of Johnson Seeds in Arborg, Man., which markets flax.
“There’s a fair bit of flax left out in the fields.”
Fields of unharvested flax are a common sight across southern Manitoba and eastern Saskatchewan. The crop is usually one of the last to be combined, but this year it is particularly late, with some crops still in the fields, either unharvestable or expected to be left for spring harvesting.
Read Also
Huge Black Sea flax crop to provide stiff competition
Russia and Kazakhstan harvested huge flax crops and will be providing stiff competition in China and the EU.
Harvest was delayed by cool growing conditions that slowed crop maturity by weeks, as well as wet weather that stopped crops drying and kept farm machinery out of fields.
Good weather in recent days has allowed farmers in some parts of Manitoba and Saskatchewan to resume harvest, but much of the crop is coming off tough and damp. The truth about quality in the bolls will not be known until harvesting is attempted on each crop.
Some southern Manitoba farmers have attempted to burn their flax so they can start fresh next spring. However, others have found their flax has held up well.
With that in mind, Johnson said there’s still a chance for some farmers to gather their crop and capture the present high prices.
“We’ve gotten good weather and we’ve gotten a lot of the crop off. As long as the weather holds and we get some good south winds, they’ll be able to get back out there,” Johnson said.
Flax prices have been one of the few sunny spots in farmers’ marketing outlooks this fall, although analysts have consistently expected prices to fall from September’s $11 per bushel. That has happened, with the cash flax price falling to less than $9 during harvest, but as weather damage and harvesting problems developed, prices have risen again, in some cases to more than $10 per bu.
However, analysts still say high flax prices carry the seeds of their own destruction. Continued high prices caused by short supply are already causing flax oil users to find other oils, and the shipping season through Thunder Bay to Europe is drawing to a close.
Each month that not enough flax makes it to market means another month of demand lost because users do not wait for Canadian flax.
“There’s already a certain amount of substitution going on with flax in the oil market,” Johnson said.
The longer-term outlook for flax is less rosy than the short-term, especially because a major European user of flax for linoleum production is considering getting out of the business.
Forbo, a Swiss floor, adhesives and belting manufacturer, has been stumbling with its linoleum sales and can’t see an easy way to turn its flooring division around.
“Expanding the product range or entering growth markets requires the massive use of financial means and management resources which are beyond Forbo’s possibilities,” its executives said in an end-of-August semi-annual report.
The company hopes to find a partner to reinvest in the flooring division, but if one can’t be found, “the complete divestiture of the business is not being excluded.”
Johnson said this year’s short Canadian crop is the cause of current high world prices because Canadian exports dominate global flax trade. However, the attractive price will encourage farmers in the European Union and Argentina to seed more flax, making it likely that supply will grow and prices will be much lower next year.
“We’ll probably get flooded with flax next year,” Johnson said.
