SASKATOON — Canaryseed is going to be a popular choice as an alternative crop this spring as farmers try to get in on the rally they missed last fall.
“The price levels offered in the past few months have been attracting a lot of attention,” said Cal Kelly, a Regina-area farmer and market analyst who concentrates on specialty crops.
In two weeks in late October, the price of canaryseed went from eight or nine cents per pound to 25 or 30 cents a lb.
“This all happened after the crop was off,” he said. “In fact most growers had already sold their product and didn’t get any benefit at all out of this rising market.”
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A combination of three factors sent the prices soaring, Kelly said.
First, even though Western Canadian farmers planted 312,000 acres of canaryseed in the spring of 1993 — 25 percent more than the year before — disease caused by the wet, cool growing season meant production rose only two percent.
“A 40-bushel crop became a 15 or even a 10-bu. crop,” Kelly said.
Then a crop failure in Hungary, Canada’s main competitor, created unexpected demand as Europeans looked to buy from Canada.
And finally, the actual carryover of canaryseed from the 1992 crop was less than anyone expected.
“StatsCan was talking about July 31, 1993 stocks of 116,000 tonnes,” Kelly said. “It’s anybody’s guess what the real number was, but it was probably less than half that.”
The three factors led to doubled prices, Kelly said.
Acreage may increase
While prices have backed off from those highs (forward contracts in mid-February were quoted from 11-12 cents per lb.), Kelly said the prospect of higher prices may push canaryseed to 400,000 acres in 1994.
And there’s a danger in that much acreage.
Demand for the crop is inelastic, Kelly said, meaning price reacts mostly to supply. “There’s only so much of the crop the market needs and wants. If the crop is short, buyers are going to bid almost anything to get it and if it’s in surplus the price comes crashing down.
“Birds aren’t going to eat any more canaryseed because it’s cheap.”
Kelly said canaryseed growers could think about doing some forward pricing now, while leaving about two-thirds of their anticipated production open.
While prices probably won’t fall to six cents per lb. as they did a few years ago, a surplus created by a good season and more acres will mean lower prices.
On the positive side, Kelly said Statistics Canada has probably overestimated carryover from the 1993 crop and demand is quite strong from the birdseed sector of the market.
