One of the most expensive crops grown on the Prairies is losing value.
While flaxseed prices in Western Canada are still at or above last year’s prices, they have come down by at least 15 percent since last month.
The high-delivered bid for flax in Saskatchewan last week was $28 per bushel, down $5, or 15.2 percent, in the last month, according to Prairie Ag Hotwire. In Manitoba, its high-delivered bid went down even lower, losing $7.61 per bu., or 25 percent, from last month at $22.66, which is only 17 cents lower than its price last year. In Alberta, the high-delivered bid shed $5.88 per bu. over the course of a month at $20.37, a 22.4 percent decline.
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Scott Shiels, grain procurement merchant for Grain Millers Inc. in Yorkton, Sask., said flax prices are falling mainly because buyers have already purchased enough old crop and good growing conditions mean good prospects — and good supply — for the new crop.
“You get to that point in the year when you generally see in the summer if the crops are looking good,” he said. “We’re a couple of weeks behind, but the conditions look good. We’re going to watch prices slide down even more going into harvest and see what starts coming off.”
Only 346,000 tonnes of flaxseed were produced in Canada last year, according to Statistics Canada, a 40 percent drop from 2020. Agriculture Canada projected in its July estimates that production will only rebound slightly to 420,000 this year.
Due to lower yields and lower quality, Shiels said the price of flaxseed at one point was more than $50 per bu., which he believed was overpriced.
“I don’t want to say the farmers don’t deserve to get more money for their grain, but when you have such a tight supply, everything is extremely overpriced against the sales you have on. So, you really just want to get in, get your stuff bought, get out of the market and mitigate the losses on what you’re buying,” he said.
If there are above-average yields this year, Shiels said flaxseed prices could decline more, but its strong demand for use in health food is helping to support prices.
“Our flax business has grown considerably over the last five years,” he said. “The world always seems to be more conscious of what it’s eating nowadays and that really has benefited us. It complements our oat business well because it is now being looked at as a health food now. I think demand will continue to grow.
“I don’t think we’re going to see prices go down. I think there’s an 80 percent chance of upside compared to 20 percent of downside.”
