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Since 1897, Olds Products, Leaders in MustardFitzpatrick Bros.

2018 Crop Reports

June 20, 2018

Virtually all of Olds Products mustard production from 2017 will have been picked up by the end of this month and the result is that mustard stored on farms at the end of June is zero as it is most years. For the first time since 2012/13, Olds Products relied significantly on mustard production that was grown by non-contract growers (15%) in addition to the production from our 2017 contract growers. Their contribution was mostly from 2016 carryover when mustard yield averages were well above the 10 year average. 2017 had average yields well below the 10 year average and 40% below 2016.

In the hot and dry summer of 2017 the mustard plants drew heavily on the significant sub soil moisture built up from near record annual rainfall in 2016 but the record number of days with temps over 30C were too much to handle and 2017 yields suffered. The current forecast for 2018 is mainly hot and dry conditions to repeat through the growing season with the only relief coming in the form of showers and rain from storms in the main mustard growing areas. Storms have already hit parts of the prairies in Montana and Saskatchewan. The bad side of storms are wind and hail which have already taken a toll on some of our acres (1%).

Much of the mustard seeded in 2018 was seeded in May into drier top soil that needed rain to help germinate the mustard seeds. Most mustard growing areas received at least a small amount of rain but those areas that have received less than ½ inch are seeing uneven germination and the desperate need for more rain in the next 1-2 weeks. Some of the driest conditions are in southwest and west central Saskatchewan (SK) where most mustard is grown in that province. There are also dry mustard growing areas in Alberta, Montana and North Dakota but not as widespread as the dry area in SK. Timely showers in Alberta, Montana and North Dakota have brought the some of the mustard along nicely –especially in southern Alberta.

Spot markets have not reacted to the current situation due mainly to the lack of immediate and short term concern. Buyers and processors are relying on their current reserves in storage but this, at best, will only supply needs for a few months after the 2018 harvest.

The most immediate need later this year will be for brown mustard which is now sold out at the farm level. Brown acres in 2018 have jumped due to aggressive contracting programs that started in October/November of last year. Brown mustard is considered more drought tolerant than yellow mustard and the hope is we can get an average yield of 16 bu/acre (less than 10 year average) to cover demand for 2018/2019.

Yellow mustard acres in Canada and USA remained the same from 2017 but down almost 20% from 2016 when yellow spot prices reached near record highs.

My estimate for mustard acres in 2018 is:

Seed Region Acres Change from 2017
Yellow Alberta 100,000 ­up
Yellow Saskatchewan 125,000 down
Brown Saskatchewan 125,000 up +
Oriental Alberta - Saskatchewan 50,000 down +
Assorted ND-MT-ID-WA 70,000 up

Olds Products was aware of the potential supply shortage for 2018 and 2019 before we began our contracting program last January.  We knew, much like we try every year, we needed a contract price that almost all past Olds Products growers would accept along with 30% additional growers for 2018. The additional growers were needed to address our 2017 supply shortage due to lower yield, the higher possibility of another below average yield in 2018, and the increased demand from new business this year and next.

Please let me know if you have any questions or concerns.

Regards,

Walter

April 27, 2018

I hope I am not jumping early but could it be that spring is sprung, finally? This week the last of the snow piles in Lethbridge should disappear and the typical city spring work will start. That is not the case in country where land is just starting to thaw and spring melt runs into low lying areas. It will be at least 2-3 weeks before work can start on the farms.  This will be at least a month behind the early starts in the last two years. The good news may be we will not have to worry about an early frost only because nothing will be up until the middle of May, at the earliest.

In 2016 there was a large, late spring acre grower response to yellow mustard due to the high spot prices at the time. The fundamentals (i.e. low stock use ratio) are not much different this year but spot price bids are not sending a message that more acres are needed. The late start to planting this spring does not favor mustard (compared to early seeding whereby avoiding the highest summer heat during flowering) and, unlike the conditions one year ago, the dry sub-soil moisture can rely only on spring rains.

I agree with predictions that from Ag Canada and USDA that mustard acres will be hard pressed to rally like they did in 2016 and therefore stay under 400,000 acres in Canada and around 70,000 acres in the USA (similar to 2017).

The 2018 mustard production contract program, that most mustard companies have, or are part of, had a very good start and early finish. The early contract start was first intended for brown mustard, which saw a jump in spot prices before the 2017 harvest, but soon included yellow after news that Western Europe may be coming to North America to buy after shortages were reported in Russia & Ukraine. Together with the surplus 2016 stocks of yellow mustard, it did not take long for the market to fill its requirements for end use customers in Canada, USA and Europe well into 2019. After that need was filled, and together with high inventory levels of yellow at mustard buyers silos’, it did not take long for spot mustard bids to drop again, but activity in the spot market is now very quiet as growers know the current on farm inventory of good quality yellow and brown mustard is very low.

Olds Products had a record number of acres that were contracted in 2018 due to increasing demand for all our mustard products, including organic. Our brown and yellow inventory levels will need a strong replenishment from our contract growers’ soon after harvest in 2018. The plan is to send harvest sample bags this summer along with instructions where to send them. I will plan a crop tour/inspection this summer and hope to cover most of our production areas in Alberta, Saskatchewan, Manitoba, North Dakota and Montana.

All the best to you for the 2018 growing season! Thank you.

Regards,

Walter