Strong flax prices may not encourage acres

Values for new-crop flax across Western Canada are strong, but may not result in more acres this spring.

According to Prairie Ag Hotwire, new-crop values ranged from $13.75 to $14.50 per bushel as of Thursday. Old-crop prices across Western Canada were reported as being around $14 to C$16.50 per bushel.

“A lot of guys will tell you that $14 to $15 per bushel on flax is still a good price, but the yield was so terrible last year that they have gotten discouraged,” said Paul Martens of Prairie Flax Products at Portage La Prairie, Man.

Martens noted the decision to grow flax this spring will also depend on what other commodity prices are doing at seeding time.

“Typically most producers like to see at least a $1 per bushel premium on flax over canola,” he said.

Flax is less expensive to grow compared to canola, but the premium is needed to make up for poorer flax yields.

As of Thursday, flax prices didn’t hold a strong enough premium over canola to encourage acres, but if canola prices crash, some additional flax interest could be created.

Flax is also seeing big competition from soybeans in parts of eastern Manitoba, because soybeans hold up better in adverse weather conditions.

Excessive snow cover and below-normal temperatures could mean delayed seeding this spring because of the wet weather, and though flax is one of the crops can be seeded later, seasoned growers like to get it in early to avoid frost problems in the fall.

“A lot of guys are dropping their flax acres in favour of the soybeans,” said Martens. “Soybeans are one of the crops that will suck it up if there’s a lot of moisture, and if it starts to get dry, they’ll still be OK.”

Another determining factor will be what kind of crops are planted in the U.S. and other parts of the world this year, as well as weather in the U.S., as that will drive commodity prices.

— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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