The last seeds in the bins are being swept out and lucky flax growers have been scooping up wonderful prices.
But flax marketers think the end-of-crop-year market is ending and those prices may disappear fast.
“The demand has been very huge, but it’s backing off now,” said Mike Marion, general manager of Sabourin Seed Service in St. Jean Baptiste, Man.
Brian Johnson of Johnson Seeds in Arborg, Man., said some buyers have been surprised by a shortfall in flax supplies this summer.
“This is typical of an ending market where supplies are tight,” said Johnson, who sells flax to the bird seed and human consumption markets.
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“There was good demand all year and we ended up with tighter supplies than we expected, so the market values were pushed.”
But he, too, thinks the market has peaked.
“The market’s definitely coming off now,” said Johnson.
Flax is an odd crop. Its main buyers use flax for building materials such as linoleum. These buyers, who are mainly based in Europe, crush the flaxseed in Europe and sell the flax meal into the animal feed market.
Flax is also popular as a component of bird feed – a lucrative market that is less price-sensitive than many other commodity markets.
Flax is gaining in popularity as a human food. health studies have lauded the benefits of the omega 3 fatty acids in flax oil, which has increased flax sales in the health food market. Most major supermarkets now carry flax products.
Flax oil is also being used in the pet food market. It is prized for its ability to give dogs shiny coats and alleviate skin dryness.
Marion said his company’s recent sales have been to the human food market, which is why he has been able to offer $11.50 per bushel while many elevator companies have dropped to $9-$10 bids.
Marion said the recent summer demand he has been filling has come from the Middle East, Mexico and South America.
“This is the biggest year in flax we’ve ever had.”
He bought 10,000 bu. of flax at $11.50 each, but said he knows that value will disappear quickly.
“We’re still pretty aggressive, but we’re making sure we’re covered by selling it right away,” he said.
He has started new-crop bids at $8.25 per bu. but hasn’t signed contracts yet. He has heard some growers might be interested at $8.50-$8.75.
Johnson said some flax buyers are now pulling back from the market because the new crop is only a few weeks away.
“The buyers are starting to wait,” he said.
That means producers who haven’t sold yet may be in trouble.
“When the market goes up, some people hold back because they think it will go even higher, and then when it starts to go down they panic and start to sell,” said Johnson.
“That’s what we’re seeing right now.”
Marion said most of the flax he has been able to buy recently has come from Saskatchewan and North Dakota, because most Manitoba bins are empty.
