Upside Potential in New-Crop Flax Prices




Declining Prairie production prospects could mean that new-crop flax prices eventually even push past already strong old-crop values, according to Dale Johnston of Johnston Seeds in Welwyn, SK.


Old-crop flax is currently fetching around $24/bu. But by the time the 2021 crop is harvested new-crop prices, currently around $18, could be as high as $28 or even $30/bu, Johnston said.


Canadian farmers planted an estimated 983,500 acres to flax this year, up 5.5% from a year earlier and a four-year high. However, drought and heat across the major Prairie growing regions has reduced yield potential, meaning production is not likely to hit Agriculture Canada’s June estimate of 585,000 tonnes. Meanwhile, with 2020-21 flax ending stocks estimated at just 55,000 tonnes, there is little old-crop supply to cushion a potential new-crop shortfall.


On the demand side, Ag Canada is projected 2021-22 flax exports at 460,000 tonnes, which already represents a drop of nearly 15% from the old-crop marketing year.


“No one knows what’s going to come out of (harvest),” Johnston said.


In its latest bi-weekly crop report on Friday, Alberta Agriculture pegged that province’s flax crop at just 31% good to excellent – a 23-point drop from just two weeks earlier. The Saskatchewan crop was rated only 23% good to excellent as of early last week, down from 38% two weeks previous.


Source: DePutter Publishing Ltd.

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