CNS Canada –– Canada’s flax prices are still holding strong enough to encourage an acreage increase this spring, despite concerns about slowing demand.
Prices have held up even as shipping opportunities have started to slow down, as there’s a standoff between buyers and sellers, and supplies remain tight, said Mike Jubinville of ProFarmer Canada.
Old-crop flax prices on the Prairies were about $12.50-$14.50 per bushel, delivered to the elevator as of Wednesday, Prairie Ag Hotwire data shows. New-crop values ranged from about $11.50 to $12.50/bu.
Those prices are down slightly from month-ago levels, but up sharply compared to a year ago, and should still lead to an increase in acreage.
Farmers could plant as many as two million acres to flax this spring, Jubinville said. In 2014-15, 1.56 million acres were seeded to flax, Statistics Canada data shows.
Farmers are currently making their cropping plans. Though they are expected to increase flax acres, plans may not be finalized and could change if there are any significant fluctuations in prices.
“The price of flax can fluctuate and it’s dependent on the demand. Some of the reports I read are indicating that the demand side might start to diminish a little bit, and how that affects the price I think will determine what happens going forward,” said Don Kerr, president of the Flax Council of Canada in Winnipeg.
Jubinville predicted prices would have a hard time moving higher going forward, due to competition from Europe’s new crop that will be harvested in July.
If weather conditions remain favourable, and acreage increases as much as expected, supplies could become very large for the 2015-16 season. New-crop prices have already started to build in the large Canadian production prospects, Jubinville said.
Even if the 2015-16 Canadian crop is very large, there will likely be a home for most of the production, as demand comes from the U.S., China and Europe.
“We expect the demand is going to drive the price, and the price is going to drive the production,” said Kerr.
If prices remain on the strong side, that’s an indication that an increase in acres is needed to support the demand, he added.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.