Spot mustard prices for all types have continued a sharp rise from late August and are at an all-time high. Harvests are complete and yields have been determined. Average yields in Canada and USA for mustard are near 50% of the 10 year average and the lowest on record. Mustard acres in Canada for 2021 were well below the 10 year average and that did not lift the production number (70,000 MT) to match annual demand (110,000 MT). The remaining source for market demand is carryforward supplies from a previous year or supplies from another country. The last time the spot yellow market climbed to or near these heights was in 2008 and before that 2001. The vacuum of supply in those years was filled with mustard that was in grower storage that had been locked away awaiting the next record price. I believe the same, to a lesser degree, is happening again this year and in case we fall short other production areas in Eastern Europe may respond given the higher spot price on this side of the Atlantic.
The largest market for mustard in Canada and USA is condiment at 60% and that is the market Olds Products supplies. The balance of the market (40%) uses mustard as an ingredient in salad dressings, mayonnaise (flour) and meat (ground mustard). The desired volume of mustard flour and ground mustard is more sensitive to price than is the condiment market. I believe some of the demand for mustard flour and ground mustard will decrease but that will be determined in the market by the price and availability of substitutes.
Wider yield variation due to genetics from one year to the next for yellow (not as much the case for brown and oriental) mustard is a factor that can negatively affect a growers decision to grow it. Average yields for yellow have rarely been more than 700 lbs/acre in Canada but with the right rain at the right time there is of course potential for better. The problem is the average is still low and many growers need to adjust the yield for budgeting purposes to avoid disappointment. The lack of significant yield improvement combined with limited herbicide options has caused the average contract price to more than double over the past 20 years and this year triple! This is not to say the industry is not trying. Sizeable investments from government, growers and buyers have contributed to the release of a hybrid brown mustard (AAC Brown 18) and a composite yellow mustard (AAC Yellow 80) in Canada. The past two years has seen the start of commercial production and the future for both varieties, in my opinion , will dominate of the mustard production in Canada and the USA in future years. Seed costs for the new varieties will be higher and average yields will follow but until that is apparent it will be necessary for the contract price to reflect the higher seed cost.
Brown mustard shipping from Olds Products 2021 contract growers started in September and will continue for several more weeks. Yellow Mustard ex farm will start in November/December and continue at a good pace into Spring ’21. Dates for our organic mustard shipments from farms will be determined in the next two months.