LANGHAM — Mustard growers and buyers have their guns drawn but nobody’s shooting yet.
When the clock hits “harvest,” there could be a violent resolution of the supply-and-demand showdown.
“We’re all holding our breath as we get to harvest,” said Peter Gorski, senior grain buyer for BroadGrain Commodities.
“There’s a lot that’s hanging on shower to shower.”
Western Canada could produce a big crop. It could also produce a short crop and exacerbate the present zero-stocks situation.
World export stocks of mustard are dominated by Canadian production. Southwestern Saskatchewan is critical for those stocks, and that area this summer is drought-plagued.
Last year’s drought-caused shortfall created a crisis in France, where Dijon mustard disappeared from grocery store shelves as world supplies of mustard were consumed well before the new harvest came in. The Dijon drought became a big story around the world.
There is no way today to tell how much of a new crop will begin rolling in once the combines get rolling. Canadian farmers seeded more than 600,000 acres, which would be market-crushing in a high-yield year.
American farmers seeded 200,000 acres. North American farmers saw new crop contract prices above 80 cents per pound last fall and seeded a big crop.
However, many seeded into dust and there has been little rain since. That has caused both growers and buyers to step back and scratch their heads. Farmers don’t know how much they’ll produce. Buyers don’t know how much there will be to buy.
Gorski said farmers stopped selling new crop by the beginning of May. Many buyers have done the same, spooked by 70-cents plus prices.
“A lot of people have stayed out of the market,” said Gorski.
“A lot of users have been watching the weather in Saskatchewan.”
There are also worries about grasshoppers in the North American growing region, as well as the growing realization that a lot of the Black Sea supplies will not be able to make it past the mines and cruise missiles shutting down much of that grain channel.
“There are only so many places on Earth that can step in,” said Gorski.
Showers have helped many Saskatchewan crops hang on. Mustard has a deep root system that can handle drought better than most other crops. Usually by now, final production is easy to predict, but this year’s crop is on a knife’s edge.
Gorski said buyers will jump in once crops start coming off the combine, looking to cover their needs and pricing based on what they believe the new crop production is. That means farmers who haven’t priced yet, which is many, will probably have a short window in which to grab the highest prices.
“It’ll be the first people who hit that buzzer,” said Gorski.
“Everybody else will be selling average and down.”
Big buyers have been spooked by the Dijon drought. They don’t want to lose the Saskatchewan acreage upon which they increasingly depend.
That means, Gorski said, that mustard prices might have reached a new plateau, as the Frenches and Heinzes of the world seem committed to buying enough production to stay covered.
“Is 70 cents the new norm for mustard? Is it less? Time will tell.”
But for this harvest season, farmers are likely to see an off-the-combine flurry and then a more settled market.
