MarketsFarm – One of the most expensive crops grown in the Prairies is losing some of its value.
While flaxseed prices in Western Canada are still at or above those from last year, they have come down by at least 15 per cent since last month.
The high-delivered bid for flax in Saskatchewan is C$28 per bushel, down five dollars or 15.2 per cent since one month ago, according to Prairie Ag Hotwire. In Manitoba, its high-delivered bid went down even lower, losing C$7.61/bu. or 25 per cent from last month at C$22.66, which is only 17 cents lower than its price last year. In Alberta, the high-delivered bid shed C$5.88/bu. over the course of a month at C$20.37, a 22.4 per cent decline.
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Scott Shiels, grain procurement merchant for Grain Millers Inc. in Yorkton, Sask., said the main reasons for the falling flax prices are buyers already purchasing enough old crop and good growing conditions for new crop.
“You get to that point in the year when you generally see in the summer if the crops are looking good,” he said. “We’re a couple of weeks behind, but the conditions look good. We’re going to watch prices slide down even more going into harvest and see what starts coming off.”
Only 346,000 tonnes of flaxseed was produced in Canada last year, according to Statistics Canada, a 40 per cent drop from 2020. Agriculture and Agri-Food Canada (AAFC) projected in its July estimates that production will only rebound slightly to 420,000 this year.
Due to lower yields and lower quality, Shiels said the price of flaxseed at one point was more than C$50/bu., which he believed was overpriced.
“I don’t want to say the farmers don’t deserve to get more money for their grain, but when you have such a tight supply, everything is extremely overpriced against the sales you have on. So you really just want to get in, get your stuff bought, get out of the market and mitigate the losses on what you’re buying,” he explained.
If there are above-average yields this year, Shiels estimates that the price of flaxseed could still have some room to drop. However, supporting prices is the fact flax is still very much in demand as a health food.
“Our flax business has grown considerably over the last five years,” he said. “The world always seems to be more conscious of what it’s eating nowadays and that really has benefited us. It compliments are oat business well because it is now being looked at as a health food now. I think demand will continue to grow.
“I don’t think we’re going to see prices go down. I think there’s an 80 per cent chance of upside compared to 20 per cent of downside.”
