Brett Meinert’s mustard crop got off to a tremendous start. There was strong germination and good early crop development. It looked promising right through the end of June.
Earlier this week, the Shaunavon, Sask., farmer started combining a crop that will likely yield 10 bushels per acre, half of the farm’s long-term average, due to a devastating July that brought little moisture and extreme heat to his 1,000 acre yellow mustard crop.
“I don’t think our thermometer actually reached 40 C but it was over 39 C,” said Meinert during a break in
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harvest activities.
Fertilized pods aborted, there were fewer seeds per pod and those that remained were smaller than they should have been.
“Essentially it stopped blooming,” he said.
Accompanying the withering of crops like Meinert’s is a general consensus in special crops circles that mustard prices are on the rise. How far they shoot up is anybody’s guess.
In its June 29 special crops supply and disposition report, Agriculture Canada forecast a 59,000 tonne decline in supply of mustard despite a 31 percent increase in seeded acreage, due to vastly reduced carryout levels.
“The average price over all types and grades is expected to increase due to the lower Canadian supply,” said the agency.
That forecast was made before reports of faltering production prospects in southwestern Saskatchewan and southeastern Alberta, where the bulk of Canada’s mustard is grown.
Short of supply
Bolstering the bullish price outlook for the crop are reports of reduced supply from Russia and Ukraine, which fall behind Canada as the world’s second and third largest mustard exporters.
John Duvenaud, market analyst with Wild Oats Grain Markets Advisory, expected a bigger market response in the 2006-07 crop year when Canadian acreage was sliced by 37 percent. Prices went up, but it was a gradual
incline.
“This year is going to be the year that in fact we do see mustard prices take off,” predicts Duvenaud.
What happens in Canada has a direct impact on international prices since Canada typically accounts for half of world mustard seed exports.
With production pegged at 150,000 tonnes and carryout forecast at 40,000 tonnes, supplies are getting tight, said the market analyst.
Ray McVicar, special crops specialist with Saskatchewan Agriculture, thinks those estimates are high based on the crop reports he has seen and the conversations he has had with growers in the southern prairie region.
A larger percentage of Saskatchewan’s mustard crop falls into the fair, poor and very poor categories than any other crop grown in the province.
McVicar has spoken with growers in the southwestern corner with yields ranging from four to 12 bu. per acre, which is well below average. And he has driven past crops in southeastern Alberta that don’t look any better.
“The heat has taken its toll,” he said.
“There will be a disappointing yield in the mustard.”
Prices have already moved up. No. 1 yellow mustard is fetching 24.5 cents per pound, up from about 14 cents a lb. a year ago. No. 1 brown is selling for 20.5 cents and No. 1 oriental 16.5 cents, both sizable increases over year-ago levels.
“I would expect our prices to increase even more,” said McVicar, a forecast supported by analysts like Pro Farmer Canada and CGF Brokerage & Consulting.
Duvenaud said prices could easily rise another three to five cents over the coming marketing year. Depending on how the harvest turns out, it could be more.
Meinert, who signed production contracts before the growing season began, doubts he will be able to take advantage of any firming up of cash prices.
“I don’t think I’m going to have anything left over to be concerned about.”
Fortunately, one of those contracts contains a clause allowing him to receive a bonus for any in-season price hikes.
New production contracts won’t likely be available until January, but Meinert sees nothing in the mustard outlook suggesting prices won’t rise.
“The only question I have is the willingness of the buyers to pay that much more,” he said.
In its commodity markets newsletter, Saskatchewan Wheat Pool said nearby demand is minimal with little interest in the crop before harvest.
