Lower projected acreage and historically small stocks will make yellow mustard a reasonably profitable crop this year.
It was one of the key messages to emerge from the Saskatchewan Mustard Development Commission’s annual convention held Jan. 15 during Crop Production Week in Saskatoon.
Price projections offered during the meeting featured new crop yellow mustard contracts fetching 34 to 37 cents per pound in 2015, brown fetching 26 to 31 cents and Oriental getting 26 to 30 cents.
“That’s a positive outlook for us,” said commission chair Patrick Ackerman.
“That puts us in a range that makes it pretty profitable to grow mustard.”
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Stocks of Canadian mustard have been declining steadily during the past few years.
Spot prices for yellow mustard bottomed at around 15 cents per lb. in 2010, prompting some growers to look at other cropping options.
The low prices resulted in fewer acres, lower carry-in stocks and historically tight stocks-to-use ratios.
The carry-in fell to an estimated 8,000 tonnes last year, down from 116,000 tonnes in 2011.
The stocks-to-use ratio was pegged at 4.4 percent in 2013, down from 78.4 percent three years earlier.
Current stocks-to-use ratios are estimated to be 14 to 15 percent, the equivalent of two to three month’s worth of industry needs.
“These are very low numbers,” said Walter Dyck, a mustard buyer with Olds Products, one of North America’s biggest buyers.
“My message to (Canadian growers) is that … the world is looking for your mustard because we’re just not producing anything extra.”
Despite the positive price outlook, some are forecasting fewer mustard acres again this year.
A projection at the conference showed Canadian plantings this year at 419,000 acres, down from 500,000 last year.
The five-year average is 400,000 acres.
Ackerman said he and other growers aren’t reading too much into early estimates because planting intentions can change quickly.
However, the commission has anticipated reduced acreage and stronger prices for some time, he added.
It bodes well for domestic prices but can have a detrimental impact on the industry, especially if stocks run too low and stability of supply becomes an issue.
“We’ve known for a while that we’re losing growers, we’re losing acres and we’re competing against other crops and usually, when you lose those acres, it takes a while to get them back because of canola contamination,” Ackerman said.
brian.cross@producer.com
