Producers balk at locking in mustard contracts

With some uncertainty around agricultural markets thanks to unrest in the Middle East, a number of mustard producers intend to wait and see what prices do, as opposed to locking in new crop contracts.

Tom Halpenny, CEO with Mustard Capital Inc. at Gravelbourg, Sask., said values have been moving higher over the past couple of months and that has many producers in an optimistic mood.

“It’s getting into the zone where it is a reasonable alternative to other crops,” he said. “Guys are feeling a little bit bullish, so they aren’t really signing any contracts — that’s actually going on with a lot of crops.

“A few players are interested at these levels, but most are prepared to leave it open.”

As will be the case for all pulse crops this crop year, mustard seed will see considerable competition from a number of other crops.

“There is continuing strength in cereal grains as well as canola, so I think guys will take a look at optimizing what they can do with the rotation with those crops,” Halpenny said. “Pulses are strong, but they aren’t showing the same flash that those other crops are. That said, I think mustard will still be put into rotations as it normally would.”

One factor that may favour mustard seed this spring is the expected flooding in some parts of Saskatchewan, which could lead to a shorter growing season.

“With the wet conditions from last fall, along with the cool and wet conditions expected this spring, you may see some producers shift back into mustard, if they have some last minute decisions to make,” Halpenny said.

With uncertainty still surrounding spring planting, Halpenny didn’t expect to see much a change in prices.

“I think things have stabilized a bit. We had some strength in commodity prices in January and February, but they have levelled off some. I think that will carry through to seeding,” he said.

Current elevator deliveries for brown and yellow mustard seed are bringing about C30.5 cents per pound, according to Prairie Ag Hotwire.

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