Canadian flax acres dropped last year, but yields rebounded nicely in many areas.
Chuck Penner with LeftField Commodity Research says we saw lower acres despite new crop bids of $24-25 a bushel.
He says that while acreage was down, yields rebounded allowing supplies to recover to where we were before the drought, but certainly not a big supply situation.
Unfortunately, flax exports this year have not been encouraging.
Canada has three key buyers of flax that take about a third of the crop each, the U-S, China and the E.U.
In 2022, Canada shipped some containers into China and the EU, but most of our flax exports this year went to the U-S, which has a limited market.
Penner points out that Russia and Kzachstan have been boosting their flax production which was having an impact for some sale opportunities.
What will this mean for flax acreage here at home for this year?
He says if we couldn't buy acres last year with $25 new crop bids, I don't know what's going to happen this year.
"Nobody's issued new crop bids yet this year that I can find. Partly because they probably have to issue them at that price that farmers would just say forget it. So they're not going to sign up anyway. "
Penner says when it comes to flax acres this year, he thinks we could see acreage drop to around 600,000 acres - which would be the lowest flax acres since the 50s.
"I think in the North American market that will be supportive for prices. But it's not going to necessarily force Chinese buyers or European buyers to say, oh, no, we better raise our new crop bids, because we're not going to be able to get Canadian flax. They've learned that they can make do with Russian or Kazach flax. So, even if we drop acres that doesn't necessarily trigger an increase in prices."
Farmers are looking at strong returns for wheat and canola when evaluating the competition for acres here at home.
In summary, he says Canada is no longer the key to the global flax market.
Chuck Penner gave the market outlook presentation during Saskatchewan Crop Week.
To hear some of the highlights from his presentation click the link below.