MarketsFarm – As the world’s largest producer of mustard, a sharp decline in Canadian production has already made a major impact on supply and prices.
Despite an increase in seeded acres, Canada’s mustard production dropped 28 per cent to 71,000 tonnes for the 2021-22 marketing year, according to Statistics Canada’s September crop report. Of the 118,000 tonnes of total supply, only 5,000 are projected to be carryout stock.
“Everybody got their crop in. Some mustard was graded lower because of smaller seeds due to the drought,” said Rick Mitzel, executive director of the Saskatchewan Mustard Development Commission (SaskMustard). “I think overall the harvest is done and it’s gone over well. The yields obviously weren’t what they were expecting. It probably came in about half of normal, but the prices have adjusted for that, as well.”
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Mitzel added that hybrid types of mustard produced yields at least 20 per cent higher than open-pollinated types and were at better quality.
Prices for mustard have skyrocketed over the past year. The high-delivered bids for both yellow and brown mustard are C$1.01 per pound, 60 and 70 cents higher, respectively, than last year according to Prairie Ag Hotwire data. Over the past month, the price of yellow mustard rose by 20 cents/lb., while brown went up by 30 cents/lb.
“With regard to the condiment, which makes up 60 per cent of the demand for yellow mustard and 100 per cent of the brown, there is no substitute for its use,” said Walter Dyck, the Lethbridge, Alta.-based general manager of Olds Products’ seed division. “That means the processors, whether they are in France or the (United States)…cannot be without that.”
Mustard was already at low carryout numbers going into 2021-22 and there will be a greater supply crunch this time around, causing buyers to look elsewhere in order to meet demand.
“I think we’re living on the edge in terms of supply,” said Mitzel. “The demand is there and is still there for now. But once the supplies dwindle, we’ll probably see that fall off a little bit and there will be shortages at the end of the day in the marketplace.”
Dyck added, “I would think if there are stocks in Eastern Europe that will move this way, it may move directly into the U.S. or into Canada and then go into the U.S. I do see, in addition to growers cleaning out their bins with old crop mustard, some Eastern European mustard headed this way, as well.”
He also said that he had once thought 85 cents/lb. would be where mustard prices would peak. While Dyck had seen significant price rises in 1988, 2001 and 2007, but now he says he has never seen mustard prices at these current levels.
“Once I think the market realizes that there’s nothing left to chase, I think these high bids will decrease. But until that happens, we’re chasing something and companies that make condiment mustard cannot be without. It remains to be seen where that market wants to go,” Dyck explained.
