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Mustard days look decent

Reading Time: 2 minutes

Published: January 17, 2002

Grain producers would normally be aghast to hear that prices will be

dropping by 62 percent.

But those attending last week’s annual meeting of the Saskatchewan

Mustard Growers Association took the news in stride.

That’s because they know spot market prices for yellow mustard as high

as 60 cents a pound are an aberration, reflecting an uncomfortably

severe shortage of uncontracted product.

And they know the price forecast they got for the 2002 crop – contract

prices in the range of 22 to 23 cents a lb. for yellow mustard –

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represent a 30 percent increase over what contractors were offering

last winter.

“It’s approximately what I expected,” said association president Brad

Meinert, a farmer from the Shaunavon, Sask., area.

A price of 23 cents a lb. translates into a decent return for most

mustard growers, he said.

“Last year I was willing to contract at 17 cents and that would have

covered my cash and fixed costs. So 23 cents is a profitable level.”

The price forecast came from market analyst Steve Gadient of

Saskatchewan Wheat Pool, who told the growers they can expect to see

steady demand for the mustard they grow this year.

“We’ll see good movement of the 2002 crop at high prices,’ he said.

“The potential returns are very good in comparison with other crops.”

As a result of last year’s drought-reduced crop, carryout stocks on

July 31 are expected to be a meagre 14,700 tonnes. The supply pipeline

needs to be replenished and that will be reflected in steady and

stronger prices.

“We will see an increase in demand because customers need mustard,”

said Gadient.

He cautioned that his price projections are based on several crucial

assumptions, including average precipitation, a doubling in mustard

acreage to 680,000 acres from 338,000, slightly below average yields

due to dry conditions, a low year-end inventory and no significant

change in mustard acreage in other countries.

Based on those assumptions, Gadient forecast the following contract

prices for 2002:

  • Yellow – There’s a 40 percent chance contract prices will be 22 to 23

cents a lb., a 35 percent chance of 20 to 22 cents, a 15 percent

chance of prices over 23 cents and a 10 percent chance of prices under

20 cents.

  • Brown – There’s a 50 percent chance contract prices will be in the

range of 17.5 to 18.5 cents, a 30 percent chance of 16 to 17.5 cents, a

15 percent chance of prices over 18.5 cents and a five percent chance

of prices under 16 cents.

  • Oriental – There’s a 40 percent chance prices will be in the range of

16.5 to 17.5 cents a lb., a 30 percent chance of 15 to 16.5 cents, a 25

percent chance of prices over 17.5 cents and a five percent chance of

prices under 15 cents.

About the author

Adrian Ewins

Saskatoon newsroom

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