SWIFT CURRENT, Sask. – Mustard prices are likely to remain stable and perhaps increase during the next six months, growers attending a field day here heard last week.
Walter Dyck of Wisconsin-based Olds Products said demand is strong throughout Canada’s top market, the United States, and stocks are not excessive.
Olds Products is the second-largest user of yellow mustard in the U.S. That country uses between 65,000 and 70,000 tonnes of mustard a year.
Dyck said prices have “moved up and down like the Rocky Mountains” over the years. The wild card is European demand for yellow mustard, which won’t be known until October or November.
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Europe is typically Canada’s No. 2 market but primarily for brown mustard.
“If they’re really hungry, we’ll know right away because they will not pull a punch,” he said.
“When they need mustard, they will come, so that has potential to drive up prices especially when our inventories are that low.”
Carryover from 2008 is higher than that from 2007 but not by much, he said. Monthly use is between 12,000 and 15,000 tonnes and by the end of July, Dyck expects there will be enough supply left for another four months.
That supply is in dealers’ hands, not growers’, he added.
Large American buyers rely on contracted production. They don’t like to play in the spot market unless they really have to, said Dyck.
“The contract market will always be stronger when the inventory levels from the previous year are lower,” he said.
Contract prices almost always fall after a year of record production and low spot prices. Lower seeded acreage is the result.
Dyck said the contract market should step up and ensure good production by offering good prices.
This year, yellow and oriental mustard acreage is up while brown mustard acres are down, said Jackie Kress of CGF Brokerage in Saskatoon.
Total Saskatchewan seeded area is about 420,000 acres, half of which is yellow. Alberta growers seeded about 125,000 acres, 90,000 of which are yellow.
Kress said prices are expected to fall slightly through 2009-10 compared to the previous year, but remain high by historical standards.
“One thing that we’re noticing right now is that the prices have remained,” she said.
“There haven’t been the dips in price this year that we’ve normally seen in years past.”
She said Ukraine has doubled its acreage and harvest appears adequate, which may limit exports to Europe. South American buyers are expected to pick up some Canadian supply.
Dyck said traditional European growers such as Hungary, Romania and Poland have dropped yellow mustard and pushed it into Ukraine.
“They know how to grow mustard there but the people that control the selling of the mustard have not gained a great reputation,” he said. “Nobody really knows what’s going to come out of there. Nobody really knows what the quality is.”
Canadian quality is well known globally. Kress said the drought may affect some crops in terms of heating and green count, but there are markets for those types of quality.
Cash bids as of July 15 were 40 cents a pound for yellow, 38 cents for oriental and 30 cents for brown.
Kress said a few buyers are still offering new crop production contracts at about 30 cents for yellow mustard.
“Would I contract at that? Thinking what the spot contract is going to be in the fall? I probably wouldn’t.”
Supply of brown mustard could run short and lead to some price hikes, she added.
