Saskatchewan still holds the mustard exporter title, but other producers, largely from Eastern Europe, are stepping into the business.
Asia is the largest user of the crop, but Canada’s business is feeding the American market, Chuck Penner from Left Field Commodity Research, told producers attending the Saskatchewan Mustard Development Commission’s annual meeting in Saskatoon during Crop Week.
The United States has increased its annual acreage from a typical 40,000 acres, before 2017, to more than 94,000 for the past three crop years, taking up some of what had been a Canadian market.
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Russia and Ukraine have also been growing more.
Russia produced an estimated 170,000 tonnes last year and is shipping into South Asia, competing with some Canadian product.
Prices in Ukraine gave some strong price signals for the fall of 2017 and winter of 2018, resulting in what were likely increased regional acres and production. Prices for white mustard, similar to Canadian yellow, topped US$900 per tonne and $700 for yellow, similar to Canadian oriental. Prices are now about $775 and $525, respectively.
Bids for both fell rapidly after the harvest started to come last August but are starting to come up a bit in past month, “which signals to me that they are starting to tighten up on supply,” said Penner.
Supply and demand for the crop is relatively in sync when it comes to the Canadian market, meaning producers can look forward to regular peaks in price in the later fall and earlier spring, when the St. Lawrence Seaway closes and opens for the seasons, and the start and end of the American baseball season.
As the crop year wears on and supplies tend to wane, buyers can tend to become more aggressive in bidding, depending on supplies.
“If there is a chance of a price improvement in mustard, it will be in the later part of the year,” he said.
“There are comfortable supplies of brown. Yellow and oriental are lower. We can look forward to mediocre demand from Europe and the United States,” said Penner.
The Winnipegger said producers could look forward to some slightly improved prices this spring, “but don’t hold out for big money this year, it’s not likely coming.”
“Ending stocks are fairly mediocre and so are prices,” said Penner.
He expects that producers in Western Canada will cut their mustard acres this season but can expect steady demand from buyers, and prices “will firm up a bit.”
Prices for oriental mustard are in the 25 cent per pound area, while brown is around 30 and yellow 35.
Penner said projected gross margins from mustard are in the middle of the pack when it comes to crop choices for 2019-20. If canola generates $250 per acre and hard red spring wheat was to make $125, mustards would be in the $175 range, suggests Penner.
He predicts that producers will pull back on seeded acres of the crop this year by as much as 26 percent from last season’s half million.
