Glacier FarmMedia COVID-19 & the Farm

Low flax supply doesn’t mean price increase

The latest production estimates in flax are lower than originally projected, but that doesn’t mean the market will see a large increase in value.

In its Aug. 24 report, Statistics Canada said there were 365,000 tonnes of flax grown in Canada in 2011 — lower than trade estimates which ranged from 445,000 to 531,000 tonnes. There were 423,000 tonnes of flax grown in Canada one year earlier.

Grant Fehr of Keystone Grain at Winkler, Man. said even though the numbers are lower than expected, low stocks weren’t a surprise given lower acres this year across the Prairies.

The main reason that prices likely won’t bounce up given the low Canadian stocks is an exceptional crop being grown in Eastern Europe, he said.

“Ukraine, Russia and Kazakhstan are going to have a very large crop and they will take the demand from western and northern Europe, which typically goes to Canada,” Fehr said. “This will reduce Canadian demand for the rest of the calendar year.

“The prices today are anticipating that product coming into the marketplace. If demand is soft, we won’t see much of a price increase,” he said.

Fehr said he expects to see some volatility in the market after Christmas.

Another factor restricting any type of advances is good crops that are growing across the Prairies, and in particular those in Saskatchewan, he said.

Elevator bids for flax are bringing as much $13.25 per bushel in Manitoba, $13.50 per bushel in Saskatchewan, and $12.98 per bushel in Alberta, according to Prairie Ag Hotwire.

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