Mustard buyers are hoping for a sizable increase in acreage in 2009.
Steve Gadient of Montana Specialty Mills told growers meeting in Saskatoon Jan. 14 as part of Crop Production Week that processors are “really scared” by the combination of low inventory and uncertainty about the global economy.
An increase in acreage would provide a security blanket going into 2009-10.
“The industry would like to see at least 50 percent more mustard go into the ground in 2009,” he told the annual meeting of the Saskatchewan Mustard Development Commission.
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The July 31 carryout is expected to be 28,000 tonnes, which translates into a tight stocks-to-use ration of 18 percent.
That’s slightly higher than the previous year but still below historical numbers.
The mustard market is known for its volatility and unpredictability, often experiencing wild year-to-year swings in acreage and production.
For example, as recently as 2006 stocks levels were at the other extreme — a burdensome and price-depressing 190,000 tonnes.
However, Gadient was unable to offer growers any surety about the prices they will receive for their 2009 crop.
“There really is no clear direction in the market right now,” he said, describing the outlook as unpredictable and volatile.
Contracts for yellow mustard were around 40 cents a pound last November. Recent offers have been 35 to 37 cents, with some slipping to around 32 cents.
Prices for brown and oriental mustard have been moving in a similar direction.
He said processors bought supplies at high prices last fall and are reluctant to make more purchases now given uncertainty about future demand from end users.
“Processors and importers have shown little interest in purchasing additional mustard,” he said.
“When they make a buying decision it will be hand to mouth.”
He added that while mustard prices may be below levels of last year, they can still pencil out well compared to other crops.
