The paint on the latest mustard production estimate from Statistics Canada is not dry yet but the effects will add some cold water on the fire that has been burning under the record-breaking spot prices over the last two years. After the grower survey was completed by Statistics Canada the number of harvested mustard acres increased to 637,000 acres which is the largest number of mustard acres since 2004 when 738,000 acres were seeded. When we include the record high 2023 USA production (virtually all yellow) of mustard we initially see potential for significant carryover stocks toward the 2024/25 crop year. In addition to the increased North American (N.A.) mustard production, the 2023 mustard production in Russia and Ukraine was large enough to surpass the European requirements through the next harvest in 2024.
Despite the N.A. and Eastern Europe production news, yellow spot mustard bids continue to hold up well. Brown and Oriental prices have tumbled more in recent weeks. How can this be? The answer lies in the low yields for yellow mustard in the main growing areas in Southern Alberta, Southwestern Saskatchewan and northcentral Montana which were at best just over 600 lbs/acre. Mustard grown in the central and eastern parts of Saskatchewan, where moisture and yields were much better, had a high ratio of brown and oriental acres to yellow. When mustard yields average only 600 lbs/acre in main mustard growing areas, we are in exceptional situations. Other exceptional low yield years in the last twenty were in 2022, 2021, 2007, 2002 and 2001. I believe the spot market recognizes the low yellow mustard yields in 2023 and it also recognizes the continued drought in the main mustard growing areas of N.A. In order to be competitive on a gross revenue per acre the low mustard yields require a price component to be competitive with other commodities and even itself, in the form of the prospect of higher spot prices in 2024. New hybrid and composite varieties are encouraging for growers but a commitment is also needed from the market.
Statistics Canada is forecasting 2024 mustard acres to be 675,000 and this would be the highest level since 2004 when Canada seeded 738,000 acres. Combined with USA production the total acres will be near an eyepopping 875,000 acres in 2024. It should be noted in 2004 the total N.A acres were 811,000 acres (including 73,000 USA). Until we see average yields move higher in the main mustard growing areas in N.A. we will see both higher spot yellow prices, when compared to contract prices, and above average seeded mustard acres.
In the meantime, until we see yields move higher, world mustard demand for N.A. mustard will sustain 700,000 acres- 400,000 yellow, 175,000 brown and 125,000 oriental. Carryforward stocks, both on farm and in buyers’ inventory, that were zero in August 2021 and virtually zero in August 2022, are increasing and were at 2-3 months of usage at August 2023 in my estimate. My estimate, compared to other reporters, of the carryforward stocks has been on the low side the past three years. Regardless, until we get to 6 months usage (50% stocks to usage) we are not overly long in N.A. but more sustainably long for, growers, buyers and users.