Farmers who looked at last winter’s $13 per bushel flax prices and decided to take advantage of them by seeding extra acres are getting what market advisers said they’d get: a lower price.
Today’s flax prices are not a disaster. New crop was fetching $7.15 to $7.51 per bushel in southern Manitoba in the first week of September.
But there’s little reason to believe flax prices will move up.
“It’s a rather bearish outlook,” said one grain company source who trades flax.
“It sets us up for a year that’s going to be defensive in price.”
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Canada’s flax production should be almost double last year, Statistics Canada has reported, and the American crop is substantially larger than last year.
Flax prices tend to swing wildly, as do prices for most crops grown in specific regions on acreages that are small in a global context. Overproduction one year can depress prices, which drives down the following year’s seeded acreage, which in turn causes a crop shortfall driving prices higher and pushing up acreage in the next year.
During periods of surplus like this year, prices can be depressed for a long time.
“I don’t expect that there’s any significant reason for strong prices on flaxseed in Canada,” said the industry source.
High ocean freight rates and the relative strength of the Canadian dollar add to the price pressure on flax.
