Borage, once touted as a money-making alternative to other oilseeds, was promoted as a relatively safe method of diversifying prairie farms by provincial agriculture departments, seed processors and specialty crop brokers.
But last summer the dream shattered.
The annual herb had many of the characteristics desired by prairie farmers. Its seed was similar in size to wheat, allowing producers to use conventional seeding equipment. Its growing season was a good fit, the market seemed strong and it was one of only two choices for health conscious consumers looking for the food supplement gamma linolenic acid.
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But Howard Trischuk, owner of the crop broker Specialty Distributors, said the price for borage oil has dropped by two-thirds in the last year. As well, he said there is an estimated two-year world supply of borage seed.
This has had a dramatic impact on prairie growers.
“Most of the producers that grew (borage) on spec last year still have their crop on the farm,” said Blair McCann of Bioriginal Foods, a Saskatchewan company that contracted farmers to grow specific amounts of borage.
“Lots paid to clean it and bag it and now they are storing it because the market is so depressed.”
Roy Atkinson, a Saskatchewan borage grower and member of the Borage Growers Group, said the industry went through a similar price crash in 1992-93.
“It took two years to get (the market) back under control again,” he said.
“And that time we had only about 40 growers. Now there are 200 in our group and we don’t know how many just grow the crop on spec.”
The growers’ group estimates that Canadian production tripled last year, with much of the new production being uncontracted.
“We figure that for every one percent in overproduction, there is a 10 percent drop in price,” McCann said.
“The price is down so far because there was a good crop combined with a lot of uncontracted production or production that was contracted to brokers and not processors, and strong international pressure.”
Ivan Cross grew 300 acres of the herb in 1999 with the hope that last spring’s price of $2.40 per pound would be available in the fall. It was the first year of borage production for Cross and the crop yielded well.
“It is just sitting in the bin,” the Lac Vert, Sask., farmer said.
“On this farm it’s going to continue to sit there until there is a market. Right now there is no price for the product. So we’ll just wait for the market to return.”
Cross said he and other growers in the area have supplies of borage on hand, even though most had opportunities to contract some or all of their production last year.
Cross said demand for the crop seemed strong in the spring. Growers who sold to brokers or to other farmers looking for seed rather than contracting received higher prices than those who produced under contract.
Cross said few producers that he has spoken to are planning to grow borage this season.
As well, processors and brokers are hinting that few Western Canadian production contracts will be available this year.
Atkinson said producers around the globe recognized the opportunity to cash in on the short market just as Canadian farmers were increasing production.
Processors in New Zealand and Europe had already started contracting seed and production in an attempt to limit flooding the market.
“Processors and growers in New Zealand are not too impressed with all of the uncontracted production being done by farmers in Canada,” Atkinson said.
At the same time, North American producers began moving away from committing all of their production to processors though production contracts. Brokers began forging relationships with processors and buying uncontracted crop grown on speculation.
Increased competition
In China, farmers saw the opportunity to sell evening primrose seed at a premium. That herb is another source of gamma linolenic acid.
Between the Chinese and the North Americans, the supply of GLA-rich seed grew faster than consumer demand, resulting in falling prices.
