Old crop sunflower prices have softened, but many producers are banking on a rebound in the second half of this crop year.
New crop contracts have also dropped, but some producers assume it is just a pause before interest and better prices return.
“Right now we need to get some support (from end users),” Grant Fehr of Keystone Grain said in an interview during the Manitoba Special Crops Symposium.
“From there we’ll see more contracting take place.”
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New crop contracts were mostly introduced at 30 cents per pound during Manitoba Ag Days, but significant producer sign-up prompted many buyers to stop offering contracts.
“They were a big hit,” Winnipeg market analyst David Drozd said in a sunflower market outlook at the symposium.
“Obviously there’s an interest in sunflowers because they’re profitable.”
Producer interest and a slump in big acreage crops like canola and wheat also caused new crop contract prices to drop to about 27 cents.
The old crop market has fallen as well, but not severely. Offers of 34 cents have recently been available, although many buyers have backed off the market and concentrated on sweeping up the last of their contracted production.
Once that has cleared, many at the show said they expected buyers to return with fresh bids.
Canada produces much of the confectionary sunflowers traded in the world. American farmers tend to grow oilseed sunflowers.
Sunflower stocks are not a burden and most analysts don’t expect Argentina, another major producer, to harvest a huge crop this winter. With quality problems reducing the Canadian crop, stocks should not hang over the market as they are with wheat and corn.
“It’s going to be tight,” Fehr said.
Prices are high this winter, but many crops in Manitoba’s Red River Valley suffered from sclerotina head rot, which pushed crop into the lower value bird food market.
“There’s all sorts of bird food ingredients out there and it isn’t worth much,” said Kelly Dobson, a producer from Fairfax, Man., and a member of the National Sunflower Association of Canada.
He said as much as one-third of the crop may be damaged.
“Sunflowers for human consumption are entirely quality based. If you don’t have a quality product, a human consumption product, you don’t have much value left.”
Sunflowers appear clear winners for 2010 on most crop return calculators, along with oats, but most sunflower industry representatives at the special crops show doubted farmers could flood the market with additional acres.
Fehr said farmers might be able to plant an extra 30,000 acres, which seems big compared to last year’s 110,000 acres, but the Prairies are only a tiny part of world production.
“In the big sphere of things, it’s not big,” he said.
As well, farmers won’t be able to obtain good sunflower seed if they haven’t already secured it.
“You can’t just read an article in the newspaper and pick up the phone and make a call and get a variety that is going to perform for you,” Dobson said.
“It’s not that simple. It’s a special crop for a reason.”
Seed supplies are short and not available for many varieties.
