Broadview, Sask., farmer David Sefton isn’t increasing his bet on flax this year, even though prices this winter handed some farmers a giant jackpot.
“Our acreage isn’t changing,” said Sefton, who plans to stick to his usual rotation that provides 1,000-1,200 acres of flax each year.
His hopes for making more money from flax depend on being dealt a better hand with weather than he had to play with last growing season.
“Hopefully this year we’ll get a crop.”
His crop last summer was destroyed by cool temperatures, too much moisture and frost.
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If Sefton’s cautious approach is shared by growers across the Prairies, then flax growers might fare better this coming crop year than many have feared.
Sometimes, prairie farmers seed huge acreages of a crop whose price spiked during the winter. The increased acreage often precipitates a price crash as buyers become comfortable with the prospect of a big crop.
Many analysts earlier this year worried that flax acreage would dramatically increase this spring because flax prices reached more than $13 per bushel during the winter, even as the prices of most other grains collapsed. Flax demand is limited and Canada is the world’s major exporter, so any substantial increase here could quickly hammer prices.
A recent Agriculture Canada survey found producers might increase flax plantings by 50 percent.
But as spring seeding nears, a number of farmers, companies and analysts now say a big increase in flax acreage won’t materialize.
They note the lack of quality seed as the chief restriction on acres this spring.
“I don’t think they’re going to overdo it because it won’t necessarily be that easy to pick up seed,” said John Duvenaud of the Wild Oats grain marketing advisory service.
A survey of his readers showed plans for a flax area increase of about 15 percent.
Arborg, Man., flax marketer Brian Johnson of Johnson Seeds thinks a general lack of flax seed will cause some farmers to take chances with the dregs of their bins.
“Farmers are probably going to be using seed that they wouldn’t use if there wasn’t a shortage,” said Johnson.
“It always amazes me how, when prices are high in a commodity, how much seed shows up. When prices are high, farmers will put in substandard seed.”
Johnson expects more flax acres to be seeded this year, but it may be less than many expected in mid-winter because the price of some other crops have rallied.
“It depends what happens to them,” Johnson said.
Duvenaud acknowledged that farmers often make seeding plans by looking backward at prices, but many also look at future prices. Those who do will avoid overseeding this year.
“Probably we’re looking at some more acres and some worse prices,” said Duvenaud.
“That’s what the forward contracts are telling us.”
Some $8.50 per bu. contracts are available for new-crop flax, with most elevator bids floating around $7.50, Duvenaud said. Such offers will probably cool enthusiasm, but are high enough to support a sustainable increase in flax acres.
“They’re still decent prices, but I wouldn’t be too keen to pre-price right now,” said Duvenaud.
Sefton believes most serious flax growers booked their seed last autumn. Opportunistic growers who want to leap onto flax may be able to find enough to get an extra 100 acres of the crop, but they’d have trouble seeding 1,000 acres of unplanned flax, he said.
Even with more acres, Sefton is optimistic about flax prices in 2005-06. He noted this winter’s high prices have eliminated carryover stocks that would weigh down prices.
“This is taking the bottoms out of the bins,” said Sefton.
