Just a year ago Canada was facing brown mustard shortages and unless growers then came through with more acres and decent yields the world would be out in a matter of months. The growers in Canada came through. A year earlier (2017) it was much the same for yellow and oriental as the world faced imminent shortages and both CDN and USA grower responded with more acres and average yields.
The key motivator in both years was price as the spot and contract market stepped up and recognized the low supply levels in both years. This year prices for all three types are off their two year peaks as inventory levels at the grower, dealer and processor levels appear adequate. Despite the fact and perception that mustard prices are not urging 2019 production industry, forecasters are calling for similar mustard acre levels in 2019 for Canada/USA. This is due to an overall commodity market slump that includes soybeans, corn, grains canola etc. As these commodities slump in price, and despite lower current spot mustard prices, the prediction for many is that total mustard acres, including both contract and spot acres, will be sustained in 2019 from the previous two years.
Olds Products operates almost entirely in the contract market and we have contracted the 2019 acres we require to meet our customer needs through December, 2020. The forecast that 2019 spot acres will remain at “higher” levels is not a prediction we rely on for our requirements. Land that mustard can be potentially grown on is quite limited given the incredible increase in canola acres. After canola is grown the grower must wait at least four years before planting mustard to avoid a farm disaster. Also we cannot forget, given the yield variation for yellow mustard in Canada, that shortages in recent years came about quickly. Despite what some would say are current comfortable levels of supply, it is not a view that I share.
As Spring has arrived, the past widespread cold and snowy winter now appears to be ancient history in many mustard growing areas in Canada and USA. Seeding of mustard will start as early as next week for a few growers but for most it will be late April/early May. Despite the snow that blanketed much of Southern Saskatchewan/Alberta in February, the need for rain is great to replenish the very low soil moisture levels. Moisture levels elsewhere are adequate for germination but, of course, the need for Spring rain is crucial everywhere.
Treated certified planting seed has been delivered to Olds Products growers in Canada. Starting today and through next week the untreated or bare certified seed will be delivered. Treated certified seed delivery to Olds Products growers in the USA will start on Monday and go through the week.
The 2018 contracted regular and organic production for Olds Products will continue to be picked up from farms through July, and our annual plan for strong (minimum 6 month supply) August inventories for all mustard types will finally occur this year. The pace of grower pick up will be faster through July than in the last 3 months.