I would like to wish all of you a Happy New Year and I look forward to working with you again in 2019. We hope to begin our 2019 contracting program next week. The plan is to be fairly close to our record total acres we contracted in 2018. Our Yellow and Brown acres will be down slightly but our organic acres will be level with 2018. I will send an email with our prices and terms along with contractor contact information next week.
Given this year’s higher inventory levels than the past 2 years, the mustard market appears to be in a bit of a holding pattern as we start the new year. Predictions are for seeded acres to remain even with 2017 and 2018 levels. That indicates initial above average interest in seeding mustard, however, as the projection for mustard acres are to surpass 500,000 acres in Canada spot prices are at or near their 12 month lows given. In the USA there is also an initial above average potential for acres to reach upwards of 100,000 acres (all yellow) again for the third straight year (after reaching 50,000/year from 2013 to 2016).
Despite the lethargy in the current market there remain fundamentals that necessitate acres to remain at projected levels to support demand from Europe, Canada and the USA. In 2018 Canada had the second year in a row of below average yields for yellow mustard on top of a sharp decrease in 2017 yellow seeded acres in Saskatchewan. Yellow Mustard was sold out in 2016 with only a modest build in inventory in 2017 and 2018. Brown Mustard was sold out in 2018, and the current inventory levels from near record brown production will support demand only through 2019. Canada and its customers will need solid 2019 production to support 2020 demand.
Current mustard acre levels will remain if 2019 contract prices support the fundamentals or if the spot grower resolve is strong in anticipation for higher spot prices later this year. Present spot prices for mustard are not sustainable given the variation in yield for yellow mustard, lack of herbicide options and the absence of new higher yielding varieties.
This winter has been very mild in the mustard growing areas and soil moisture conditions are quite mixed. Southern Alberta and parts of southern central Saskatchewan are very dry with little or no snow cover. This is a main concern for 2019 production.
Thank you,
Walter Dyck