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Since 1897, Olds Products, Leaders in MustardFitzpatrick Bros.

2012 Crop Reports

December 15, 2012

I would like to wish all of the growers, suppliers and customers of Olds Products a Merry Christmas and Happy New Year. Olds Products is very grateful for our association with you this past year and we look  forward to a continued relationship in 2013.

Spot mustard prices have held firm (FOB Farm @ .40/lb for yellow, .35/lb for brown and .30/lb for oriental) since my last report in October and the spot trading activity has picked up from the summer when initial yield prospects looked higher than the actual results. In their last production estimate, Statistics Canada lowered their estimate for 2013 mustard production to 118,000 MT (7% lower than October estimate). The estimated mustard stocks for August 1/2013 is now forecast to be just 45,000 MT (includes yellow, brown and oriental grown held in both farm and dealer inventory)  which will cover exports for 4 months (8 months at 1-Aug-2012). Even if we hit the 2013 required acres for mustard (approx. 400,000 total for Canada and USA)  the carry forward for August 2014 will be lower than 4 months unless we see a  further boost in mustard acres. The boost was more probable in past years when the canola acres were less than 15 million acres (over 20 million acres in Canada alone in 2012 and many acres need a break from canola but they will not be going to mustard due to contamination issues). Also, most commodities have  fundamentals (low carry forward stocks or low stocks/use ratio) similar to mustard and it will be difficult to loosen acres and switch them over.

The yield break through under traditional breeding methods for mustard has not happened and but good advances with hybrid technology have been made to date by Ag Canada in Saskatoon. Your support by using certified planting seed enables this research.

New crop contracts have been offered by some dealers at FOB Farm .40/lb for yellow and .35/lb for brown and at these levels it will be a test to see if the required acres (approx. 375,000 minimum) are planted. If they are all planted it will be interesting to see how many of those acres are planted on speculation given the low carry forward stocks.

Olds Products will start the contracting season (it will be our 5th year contracting directly with growers) in early January with 2013 contract prices that are sustainable for all of our contract growers- higher than our contract prices in 2012.  Our contractors for 2013 will again be Bart and Peter Hribar who have a combined experience in the mustard industry of over 50 years.

Olds Products has the required certified Andante and Centennial planting seed for all contracted acres in 2013. Although the average yield was lower (from previous 3 years) for Olds Products in 2012 we believe our varieties are the best performers based on many years of  industry co-op trials and a proven record in the field. 2012 mustard production featured:

  • extreme drought in the southern growing area (Montana/North Dakota-below I-94) ,
  • cool and wet early season in many other growing areas (mustard does not respond well  in germinating stage when the soil is saturated with moisture),
  • widespread hail damage and late season freak winds that caused  damage (affecting average yield for Olds Products by 19% or 150 lb/acre),
  • sustained hot temperatures in  July and August with little relief from rain.
  • warm and dry harvest conditions in September

The yield range for our entire contracted list of  Andante growers was 29 bu/acre in Alberta and zero yield (drought) in east  central Montana. The overall (Alberta, Saskatchewan , North Dakota and Montana) Olds  average yield for all areas was just over 600 lbs/acre for Yellow and 700 lbs/acre for Brown. The quality of the yellow and brown grown for Olds Products in 2012 was 98% -highest ever- No.1. Dockage is slightly higher than expected due to the smaller seeds (2-4%) that did not fill  due to the high heat in July/August.

Please let me know your comments and questions.

I will be attending the Crop Production show in Saskatoon (includes annual meeting for Saskatchewan Mustard Development Commission on 9-Jan) and I look forward to seeing some of you there.

                                                                        - Regards, Walter

October 5, 2012

Mustard trading markets have been quite inactive the past 6 weeks since my last report due to decent supply prospect reports, although declining, from Stat. Canada.  This is normal during the growing and harvest season unless supply/demand issues are forming.  In their last report the projected carry forward balance for all mustard types – yellow, brown and oriental – based on an average yield of just over 800 lbs/acre (2012 crop 340,000 acres) at July 31, 2013 is 50,000 MT (it was 75,000 MT in August and 60,000 MT in September). Canada uses and exports approx. 10,000 net MT/month (50% to USA) and the supply should last through Dec 2013, or 3-4 months after 2013 harvest assuming enough of each type. 

The USA inventory of yellow mustard in all positions at Sept 01/12 was reported at 9,000 MT (must be some Canadian mustard included?) and the projected 2012 N. Dakota, Montana, Idaho harvest at 18,000 MT. Projected yield is also just over 800 lbs/acre.

In total the supply of mustard, based on the above projections, looks sufficient to keep spot pricing from moving sharply in any direction in the near term.  Demand from Europe for spot yellow mustard has been relatively quiet to date and this is always the wild card that sparks yellow mustard prices (2002, 2008).

All harvest samples have now been received from Olds Products contract growers in the USA and the quality is No.1 (the smaller seed in each sample is very small and is part of dockage). Yields are averaging over 700 lbs/acre for harvested mustard.  These yields are below average and the severe heat in July and August has taken a toll.  Many pods at the top of the plants did not develop seeds – even after more than ample rain through June.

Harvest samples from Canadian contract growers for Olds Products have started to arrive in Pleasant Prairie and the initial findings are much the same as North Dakota/Montana- approx 650-700 lbs/acre average for harvested yellow mustard and 750-800 lbs/harvested brown acres. As reported in my August crop report the effect of hail on mustard crops was more significant than in many years. Many mustard growers have noted slower combine speeds due to mustard that was too tough to cut.  Some growers noted sucker stems (blooming) growing out from a fully mature plant?? It seemed as though the plants received too much early moisture and the plant was preparing by putting in a thicker stem to support the big yield potential.

The demand for 2013 mustard acres will be higher than 2012 due to smaller carry forward and the required contract price strong enough to seed close to 400,000 acres in Canada and 50,000 in the USA. It will not be an easy task to say the very least. Olds Products is committed to securing contract acres in Alberta, Saskatchewan and North Dakota/Montana in 2013, again,  using only certified seed

I look forward to your comments when convenient. Thank you. 

                                                                        - Regards, Walter

 

August 15, 2012

The 2012 mustard harvest has started in Montana and North Dakota and will continue for several weeks. Saskatchewan and Alberta should be well underway in the next two weeks. Harvest sample bags have been sent to all contract growers and we look forward to receiving the representative harvest samples. I will contact you after  your sample arrives and provide your harvest sample information. After all harvest samples have been received I will be able to provide a better estimate for all your shipping orders through the shipping period.

 

The 2012 growing season for mustard will be known for the cool, wet start early in April/May/June and then by a sharp turn to high heat in July and August (similar to 2011 except the seeding dates were earlier this year and soil moisture was not excessive before planting). Promising higher yields in early July will likely be lower than expected but still close to a reasonable yield for mustard (16-20 bu/acre). Another significant factor adversely affecting yields in 2012 is hail caused by severe thunderstorms through parts of  the growing area from Alberta to North Dakota. Only one contracted field was affected 100% but close to 20% of  our contracted acres (10% is normal) experienced some hail damage (potential 30%-50% yield loss) in June and July. The effect of the hail (size and intensity varies greatly) is dramatic on the affected field (branches and main stalk can be wholly or partially severed) and until the mustard is harvested the yield is very difficult to predict. After hail, new branches start and if the new branches are not too far behind in development with  the rest of the plant (early in blooming stage) it can still get a reasonable yield.

The spot market for mustard appears very quiet at this time due to the July optimism (increased acre report and crop tours) for this years mustard crop in Canada and the USA. Current offers (growers) and bids (dealers) are 36 cent/lb basis No.1 Yellow FOB Farm (31 cent/lb for Brown). 

Harvest conditions over the next few weeks look very favorable (hot and dry) and most of the crop could be harvested before the end of August. At that time more will be known about yields, quality and the potential demand for mustard in Europe. I will report again in early September. Please let me know if you have any questions. Thanks.

                                                                         - Regards, Walter

July 6, 2012

The 2012 acreage estimate for mustard in Canada was significantly increased last week by 50,000 acres (15% ) to 365,000 acres (same as 2011) by Statistics Canada. Initially this spooked the market and lower bids (or no bids) from mustard buyers were evident. About the same time the estimate was released a series of early storms (hail) caused whole and partial destruction  in a number of mustard growing areas South west Saskatchewan and along Can/USA border in South east Saskatchewan. Market bid  levels returned to the 38 cent level (lb FOB  Farm) for yellow and 32 cent level for brown and questions arose about the higher estimate from Statistics Canada. In the estimate Alberta mustard acres rose 30,000 (to 110,000 acres???) from the previous year and Saskatchewan dropped by 30,000 (250,000 acres)  from 2011. Typically a much higher percentage of mustard acres are contracted (vs. spot)  in Alberta compared to Saskatchewan.

Even with the higher acreage estimate and better than average estimated yields the mustard inventory at July 2013 (about five month supply) will return to  the same approximate level as in 2008. 

In the USA (North Dakota, Montana, Washington and Idaho) the yellow mustard acres moved up 100% in 2012 to 55,000 acres (same as 2009 and 2010). These acres are 100% contracted due to insurance requirements.

Demand for mustard in June/July is typically low but can quickly change after July crop inspections/tours and the harvest in the Ukraine which supplies most of the market in Europe. I will begin my inspections and tour next week in Saskatoon. The planned crop tour hosted by Ag Canada and the SMDC at Scott, SK was cancelled due to crop damage caused by heavy rains received in May/June.

Temperatures are moving higher and the nearby forecast is for hot and dry weather through the mustard growing area. Despite the rains in May and June the mustard acres would greatly benefit from some July rains. Much of the mustard is grown in Canada is on lighter soil which does not hold top soil moisture as well.

I will send sample bags (harvest sample sent to Olds office) to all growers in July. Thank you.

I am expecting a July harvest in a few areas and most areas will be harvested in August. This compares favorably to the previous three years where September was the main month of harvest for mustard.

                                                                              - Regards, Walter

June 21, 2012

Today  is the first day of summer and usually by this time we will have had many days that feel like a summer day. For mustard growing areas in Alberta, Saskatchewan, North Dakota and Montana those “summer” days have been very few thus far. Conditions have been wet (150%-200% of normal) and cool (low spots in many areas will not produce) and this has delayed the development of the mustard that was seeded at a good time this year. Conditions below the “mustard belt” have been almost the opposite and some of the outlying mustard crops in those areas (between #2 and #94 roads in Montana/North Dakota) are suffering  from extreme hot and dry conditions. 

Despite the cool and wet conditions in the “mustard belt” most of the mustard is coming along well and the reserve moisture in the soil should serve the plants well in July when they flower. Mustard growers need warm dry weather and looks like the forecast for next week will be that. The long term forecast for the mustard growing areas varies from hot and dry to wet and cold depending on the forecaster you subscribe to. Environment Canada continues to call for a hot dry summer but another well known forecaster quoted in the Western Producer that conditions will remain cool and wet (not so good for mustard). We will see.

Spot prices (FOB Farm) for yellow mustard remain at 38-40 cents/lb, brown mustard 32 cents/lb and oriental approximately 28/lb cents. Demand for spot mustard is normally low at this time of the year and with the lower number of seeded mustard acres this year growers are not quick to sell. 

I plan to do my mustard crop tour/inspection in July this year and I look forward to seeing the contracted mustard acres grown for Olds Products. Harvest sample bags will be mailed to all contract growers along with return sample instructions. We look forward to receiving your harvest samples that will provide us with information of the quality and quantity.

On July 11 the Saskatchewan Mustard Development Commission and Ag Canada will be hosting their annual mustard day. This year the event  will be at the research farm at Scott, SK. Ag Canada is developing a hybrid mustard and the tour will be very informative.

Please let me know if you have any questions.  Walter Dyck

May 17, 2012

Mustard seeding should be completed this week (normal) in Saskatchewan and North Dakota and then all mustard growing areas (including Alberta and Montana) will be close to 100% complete.  The last three years seeding completion was 2-3 weeks later than normal and that usually means quality problems but the late harvest each year remarkably saved the crop.
 
Many crops in Montana and Alberta have germinated and conditions are good and will be even better after rain is forecast for early next week in many areas.
 
Mustard acres in Canada were intended to be less than 300,000 acres this year (lowest level in 10 years). It is possible that this number can move plus or minus 10% due to changes in seeding intentions right up to until actual planting. Canola is expected to move up past 20 million acres for the first time in 2012 and this trend greatly affects the acres that could move into mustard in the last minute. I expect mustard acres in North Dakota and Montana to increase slightly from a very poor 2011 crop that only had 25,000 acres seeded (down at least 50% from previous four years). It will be difficult to get these acres back for the same reason as Canada - canola!
 
Spot prices for mustard moved higher this month after the government released its intended seeding report. Normal production in 2012 will not meet export demand and carry forward stocks at Aug 01,2013 will be at the lowest level since 2008. Currently spot prices are 38-40 cents/lb FOB farm for yellow, 30-32 cents/lb FOB farm for brown and 28 cents/lb FOB farm for oriental.
 
It is always difficult to predict where mustard prices are going due to huge potential swings in average annual yield in Canada and huge potential swings in demand from Europe. I believe it is for these two reasons why not more mustard acres were lost to canola in the last five years. Mustard (especially yellow) has much higher upside in price than canola due to the lack of a substitute and it is for this reason that most growers in Canada will now grow it, bin it, and sit on it  without a contract and wait for the market to rise like it did in 2008. Olds Products can not and will not rely on spot production (also no varietal quality control) and it is for this reason that we have to provide a competitive contract price (in many different growing areas- Alberta , Saskatchewan, North Dakota and Montana) that allows us to contract our required acreage with the best mustard growers every year.
 
Please let me have your comments and questions. Thank you.

April 20, 2012

I would like to welcome all growers and customers to the Olds Products monthly crop report that provides information related to current crop conditions and market information. Olds Products recently completed the 2012 grower contracting program and we are pleased with the number and distribution of the acres (approx split is 1/3 each in Alberta, Saskatchewan and North Dakota/Montana) that we require to meet the needs of our customers. All acres (100%) will use certified mustard planting seed(Andante-Yellow, Centennial-Brown) that has now been delivered to farms. Growers- please remember to deduct 5% from the planting seed invoice when paying in the first 30 days.

Many growers have already applied their herbicide this Spring and widespread seeding is expected to start next week which is well ahead of the late start last year. Early seeding has resulted in higher yields in previous years . Moisture levels vary widely within each growing region but generally speaking the current conditions are good (top soil and sub-soil moisture has improved from the near record dry and warm winter). Environment Canada (http://www.weatheroffice.gc.ca/canada_e.html) is forecasting a hotter than normal growing season and lower than normal precipitation. This is not a great combination.

Spot market prices for mustard are in current doldrums and bid levels to growers have slumped to 36 cents for yellow, 31 cents for brown and 28 cents for oriental (FOB Farm). Inventory levels are relatively high for most buyers  (dealers) and coupled with end user demand waiting to develop the bid levels have been reduced. It appears the annual market demand for mustard is relying more on the spot market than on the contract market than ever before. The risk for this style of buying is that once the annual contracting and planting period ends in early May the spot market takes on a  life of its own that will fluctuate with weather and market reports (acres planted etc.). Contracting (forward) with growers provides Olds Products and its customers with pricing assurance and the risk of the spot market not having the quality or the quantity. Past episodes of mustard shortages in 2007, 2001, 2002, 1997 provided very little warning before spot prices shot up and when they went back down.

I welcome your questions or comments.

March 8,  2012

Continued above average temperatures this winter in Western Canada and in North  Dakota/Montana is now turning our attention to Spring. Last year at this time the  same area was covered in snow and ice and this year the color of the land is largely brown. La Nina is over and now the weather forecasters are working on a new theory to explain the coming weather. Good luck!

Sub-soil moisture is depleted after the dry fall season last year and the only area with decent sub soil moisture is southeastern Saskatchewan where the floods were last Spring. Spring rains will do a lot of good this year but regardless of the conditions Olds Products is committed to the forward contract market.

Mustard contracting is in full swing and Olds Products  is  preparing to move certified planting seed to growers by March 31. The industry forward contract range for yellow this year is 38-40 cents and brown is 32 cents/lb.  Interest in our Olds Products contract has been good ( much better from a year ago) but interest for brown mustard contracts in Canada and yellow mustard contracts in North Dakota could be higher. Please let me/Bart or Peter know if you have interest. Olds Products chooses to buy only in the contract market to maintain our quality and manage our supply from known and reliable stocks.

Spot price bids for yellow have moved lower (FOB Farm 35 cents/lb) in March after  peak of 38 cents/lb in November. Prices for other commodities such as lentils and peas have moved lower (% drop) than mustard and in short run growers have chosen to sell spot mustard to satisfy cash flow requirements. The spot market is currently priced with the belief that the required mustard acres (approx 350,000 acres) will be planted this year. However,  most of the acres (over 50%) will likely not be grown with a forward production contract and this trend is increasing. Recent reports from Saskatchewan Agriculture are reporting a significant carry forward supply of oriental and brown mustard from previous years. Higher than average yellow inventories are also keeping both contract and spot prices from moving higher at this time. The biggest draw for growing yellow mustard in 2012 is the belief or hope that spot prices will be much higher later this year or early next year. Significant on-farm bins of mustard are full and waiting for prices to hit 70 cents/lb but those bins will have to wait for inventory levels to come down (Stat Canada reports Canada has a 7 month supply cushion that goes well into 2013).  It is not a matter of if the price hits 70 cents/lb (FOB Farm) but when. It is important to note that the volume that trades at the peak is always very small- no one wants to miss out on a rally.

European reserves of yellow mustard are said to be in need of replenishment again this year and this will keep the close attention of the market. Ukraine is the largest supplier of mustard to Western Europe and they will be seeding their mustard shortly.

Canada exports on average 120,000 MT (70,000 MT Yellow, 30,000 MT Brown and 20,000 MT Oriental) of mustard per year and close to 60,000 MT of this goes to just five customers who make condiment mustard in Europe and North America. Another 20,000 MT goes to the balance of the condiment market in the world and then the flour and ground mustard market make up the difference (40,000 MT). Europe imports  30,000 MT/year  (Brown mustard) from Canada and about the same from East European countries (Yellow mustard) like Ukraine and it is all used in condiment mustard.