“Steady at harvest time is good,” said Scott Shiels, grain procurement merchant with Grain Millers in Yorkton.

Prices often dip at harvest time due to increased deliveries, he noted, but solid demand has kept the market where it was prior to the harvest this year.

Oats bids are generally topping out at around $3 per bushel in Saskatchewan, according to Prairie Ag Hotwire data. Prices are slightly higher in both Manitoba and Alberta.

“The quality of the crop that’s come in so far has been good,” Shiels said, though he added that yields didn’t quite live up to earlier expectations.

“I think the crop looked better than it’s actually running,” he said, adding that “the late July, early August heat just took some bushels… the plant is still there, but the heads didn’t fill.”

While anecdotal harvest reports are usually wide-ranging, Shiels said most of the talk this year was of yields coming in below expectations. “It’s not a bin buster by any means.”

Statistics Canada estimates total oats production in the country for 2020-21 at 4.5 million tonnes, which would be up from the 4.2 million grown in 2019-20.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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“Yellow mustard started firming up after harvest,” said Walter Dyck of Olds Products.

Poor conditions and quality concerns in the fall provided some of the support at that time, with top end bids still holding around 40 cents/lb.

Brown prices were also firm following harvest, but have backed away slightly to trade in the 27-28 cents/lb. area after data came out showing higher-than-expected brown mustard acres, according to Dyck.

“The signal is that yellow could use some acres this year,” he said, but added “the market is definitely saying ‘we have enough brown.'”

While yellow mustard prices may be somewhat encouraging, Dyck said price increases above current levels were unlikely, as the United States had a good crop despite some harvest issues in North Dakota.

Canada seeded about 400,000 acres of mustard in 2019-20, producing 135,000 tonnes, according to Agriculture and Agri-Food Canada data. Early estimates for 2020-21 predict slight increases in area and yields, taking total production to 145,000 tonnes.

Dyck agreed total mustard acres would probably be similar on the year, with a shift toward more yellow mustard and less brown.

Dyck said the lack of consistency in mustard yields discouraged some growers from the crop, especially as average canola yields continue to grow. He was optimistic a new hybrid variety, now under review by the Canadian Food Inspection Agency, would help on that front when it becomes commercially available in 2022.

Dyck also estimated one to two per cent of the 2019 mustard crop remains to be harvested. The quality of what comes off in the spring harvest will depend on what it looked like before the winter set in.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.

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In September, the agency estimated Canadian mustard would total about 141,000 tonnes. However, due to challenging growing conditions and a slight reduction in acreage, the StatsCan estimates released Friday were revised downward to 134,600 tonnes. In 2018, Canadian farmers produced 173,600 tonnes of mustard.

Walter Dyck of Olds Products said there was “wild variation in yield” across Canada due to a dry growing season across most of the Canadian Prairies, which brought down average yields significantly.

In turn, spot prices for yellow and brown mustard have increased. Yellow mustard, which was around 35 to 37 cents/lb. a few months ago, is now around 40 cents per pound.

“That’s quite significant for the market to turn that corner, from the 30s into the 40s,” Dyck said.

Brown mustard spot bids have increased only slightly to 31 cents/lb., after being around 30 cents/lb. for most of the summer.

Dyck expected prices to remain steady due to the significantly reduced production. However, 2020 new-crop prices will depend on “where the market feels prices will have to be.

“If those prices are seen as fairly soft, we’ll probably see an uptick in that spot price.”

— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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“The area south of Highway 1 saw a lot of rain this year,” said Kevin Hursh, executive director of the Saskatchewan Mustard Development Commission.

“They’ve seen a huge turnaround in their crop potentials.”

From May to July, the region south of Highway 1 largely improved by one drought class. Pockets of the region improved significantly by two or three drought classes, due to increased precipitation in certain areas.

At the end of July, Saskatchewan’s Ministry of Agriculture crop report rated mustard crops as 43 per cent good, 45 per cent fair, and 12 per cent poor — a considerable improvement from 35 per cent good, 38 per cent fair and 27 per cent poor just two weeks earlier. At the beginning of July, only 37 per cent of the mustard crop was flowering.

As for prices, Hursh characterized them as “stable… There’s been a little bit of improvement, but no big changes.”

Prices for yellow mustard are between 35 and 37 cents/lb., according to Prairie Ag Hotwire.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Jamie Stelmachowich of Besco Grain Ltd. at Homewood, Man. said despite the cold, wet weather, most mustard has been graded higher at No. 1 or 2.

“The seed was turned already. If it was green and it got cold, you would have seen a lot threes and fours out of it,” he said.

Richard Marleau, a farmer near Ponteix, Sask. and board chair of Mustard 21 in Saskatoon, said mustard, being an oilseed, can better handle poor weather.

“Not that it wouldn’t have any impact (on mustard), it would weather quite a bit better than a cereal or a pulse,” he said.

Prices for mustard are currently around 35 cents/lb. for yellow, with brown mustard at 30 cents/lb. and oriental mustard going for 25 cents/lb., according to Marleau.

Stelmachowich said mustard prices were doing fairly well until February 2017, when yellow mustard was about 41 cents/lb. and dropped to 36 cents/lb.

“That’s got to do with the supply and demand and other crops being so low. Our competition is lentils and peas.”

Despite the prices, mustard production in Canada increased in 2018 according to Statistics Canada. This year more than 386,400 lbs. of mustard were produced, compared to about 267,800 last year and well short of the 519,400 lbs. produced two years ago.

Nearly all of mustard grown in Canada comes from Saskatchewan, with 74 per cent of this year’s crop and Alberta with almost 25 per cent. Other provinces do grow mustard, but their crop sizes are minimal.

— Glen Hallick writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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Olds Products, North America’s second-biggest mustard manufacturer, has started contracting acres in Alberta, Saskatchewan, North Dakota and Montana.

Seed division manager Walter Dyck expects less mustard will be seeded this year, as strong canola prices tempt producers who are on the fence.

“Those extra acres usually only come in when spot prices are relatively high,” he said.

Prices for mustard are lower compared with the previous year, when stocks of the crop were lower.

“There was very little that wasn’t spoken for or sold,” Dyck said.

That led to an increased amount of acres in the 2016-17 year, building up mustard inventories.

Agriculture and Agri-Food Canada’s latest supply and disposition estimates peg 2017-18 mustard acreage at 395,000, compared with last year’s 524,000 acres.

Yellow mustard is likely to make up about two-thirds of those acres, Dyck said, while the other third will be split between oriental and brown.

“I think for most growers they’re looking more for contracts, and waiting to see what companies will offer,” he said.

Spot prices for new-crop mustard in Western Canada are between 34 and 36 cents/lb. for yellow and about 31 to 33 cents/lb. for brown and oriental, according to data from Prairie Ag Hotwire.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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“I think the increase in acres off of last year will definitely have an influence on prices. I think it already has,” said Walter Dyck of Olds Products.

Last year, Canadian farmers planted 345,000 acres of mustard, and this year they are expected to seed 430,000 acres, Statistics Canada data said.

But Dyck noted the market will be closely watching how well the growing season progresses, which will be reflected in prices going forward.

“A lot of the seeding has to be done, so we’re a long way away from having the mustard in bins,” he said.

“I think if we see an outlook in the growing season where things don’t look favourable, then you’ll see spot prices very likely spike upwards.”

Demand has remained strong for Canadian mustard, Dyck added, except from Europe, which has been using more of its own production.

Exports are slightly behind last year’s pace, at 13,900 tonnes as of April 24, compared with 15,600 last year, according to data from the Canadian Grain Commission.

Spot prices have moved lower as-of-late, but many producers have already sold their supplies, Dyck said, taking advantage of stronger prices in December and January.

“I think a lot of it has moved into the hands of dealers or processors,” he said.

Prairie mustard spot prices are between 37 and 46 cents per pound for yellow, 33 to 35 for brown, and 48.5 and 51 for oriental, according to Prairie Ag Hotwire data.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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“It’s not going to be a big bounce-back year like we’ve had in the past whenever spot prices have increased like they have,” said Walter Dyck of Olds Products.

High pulse prices are competing against mustard, he said, and crop rotation could also limit acres.

However, production will still likely increase from this year’s levels. Statistics Canada estimates producers grew 123,400 tonnes of mustard in 2015.

“When you have those higher prices it usually means you’ll get more acres,” Dyck said.

Delivered elevator yellow mustard prices are at about 50-56 cents per pound, according to Prairie Ag Hotwire.

“There isn’t a lot of mustard to buy and some of it is just going to take a higher price to pry it loose,” Dyck said.

New-crop bids range between 45 to 46 cents per pound, according to Prairie Ag Hotwire.

Dyck said seeing new-crop prices in December is historically early, but it’s been a trend the last three or four years.

“I think what they’re seeing is potentially some demand from growers who are interested in locking something up early.”

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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Prices of the yellow condiment dabbed on hot dogs and pretzels have leaped to their highest level in seven years this autumn as growers in Western Canada, which supplies three-quarters of the world’s traded mustard seed, turn in their smallest crop in nine years.

In India, the price of a contract representing both mustard seed and rapeseed, related crops grown in the same areas, has surged by a fifth to record highs in the past three weeks over fears that unseasonably hot weather will prevent sowing that would normally begin later this month.

The higher prices threaten to drive up costs for Kraft Heinz, maker of Grey Poupon, and Reckitt Benckiser Group, maker of French’s, which hold more than 40 per cent of the market share for North America’s fourth-favourite condiment by sales, according to some estimates.

But smaller producers such as Barhyte Specialty Foods are feeling the most immediate pinch. The company at Pendleton, Ore., about 300 km south of Spokane, lost customers after raising its price on organic brands to cover the cost of buying extra supplies from Canada.

“We took a big spike this year,” said CEO Chris Barhyte, whose company makes private label mustard as well as its own Suzie’s brand. Although the bulk of his mustard seed comes from domestic farmers, he increased purchases from Canada to meet heightened demand for organic products that now make up roughly 40 per cent of his overall needs. Prices for Canadian organic seed were nearly 30 per cent higher than in past years, he said.

While farmers savour rising prices and food makers bemoan higher costs, those hurting most may be the middlemen who buy crops from farmers on the spot market to meet forward sales.

Some exporters are “panic buying” due to scarcity, said Bob Waldbauer, director of mustard seed sales at BroadGrain Commodities at Dafoe, Sask., about 150 km east of Saskatoon. “It’s not a matter of price, it’s a matter of supply.”

He declined to name any specific firms. The biggest exporter to the U.S. is Viterra, the Canadian grains trader owned by Swiss mining and trading firm Glencore, according to data from PIERS. Company representatives did not respond to requests for comment.

To be sure, ructions in the niche mustard market barely register amid the meltdown engulfing far larger commodities.

U.S. imports of mustard seed came to just US$52 million last year, almost all of that from Canada, and the entire U.S. retail market is worth about US$430 million, according to Euromonitor. Consumers may barely notice, as seeds make up only 15 per cent of the average retail price for a bottle of mustard, said Walter Dyck, seed division manager at Wisconsin-based mustard manufacturer Olds Products Co.

The crop is a mere blip on Canada’s Prairies, where farmers planted 75 times more wheat than mustard this year.

Blame Canada

The problem emanates from Canada, where farmers sowed only 325,000 acres of mustard this year, less than half the 2003 record high. It has fallen out of favour with many farmers for relatively lower returns.

In addition, dry weather cut yields, producing only 109,300 tonnes of mustard this year, down 45 per cent from last year’s output, according to Statistics Canada.

Processors have recently paid farmers C45-50 cents per pound for yellow mustard seed on the spot market, where they are likely to source about half their supplies this year, Dyck said.

“It’s really, really tight.”

The impact is felt most keenly in the U.S., where local production covers barely a tenth of domestic demand. The rest is imported from Canada, with shipments up 15 per cent this year, according to U.S. International Trade Commission data.

Big, diversified food companies have been partly protected from this year’s rise, thanks to extensive advance purchases, but next year may be a different story, as high spot prices influence a new set of supply contracts.

“Clearly when the price goes up, things change. Demand and price go hand in hand,” said Elliott Penner, president of French’s, which commands 30 per cent market share with sales of US$132 million, according to Euromonitor. “It’s competitive as hell.”

Kraft Heinz’s Grey Poupon, which is second in the market with 11.5 per cent, is also competing for more seeds, and launched a strategy this year to boost mustard sales. Kraft Heinz declined to comment.

ConAgra Foods, whose Gulden’s brand is third at six per cent, said it had not experienced any disruption in production.

Wasabi woes

Beyond North America, the mustard squeeze is being felt in India, where a futures contract on the local NCDEX exchange tracks both rapeseed and mustard seed. The two crops are similar, although not usually interchangeable.

Prices have surged over 20 per cent in the past month and hit a record high at 5,120 Indian rupees (C$103) per 100 kg earlier this week due to unseasonably high temperatures.

The woes may touch budget-conscious sushi lovers who could pay a fraction more for their spicy green condiment. True wasabi is a rare and expensive plant, so producers often opt to make a substitute with a mixture of horseradish and so-called oriental mustard, which is in even shorter supply than the standard variety.

Richard Marleau, who grows mustard near Aneroid, Sask., about 100 km south of Swift Current, is in no hurry to sell his crop as prices climb.

“It’s nice to see prices rise finally so a guy can get rewarded for what he does,” Marleau said. But processors’ current bids for next year’s output may not cut the mustard against lofty prices of lentils and other niche crops, making it doubtful that bigger plantings will replenish supplies.

“They’re going to be in the same situation,” he said.

— Rod Nickel and Luc Cohen report for Reuters from Winnipeg and New York City respectively. Additional reporting for Reuters by Rajendra Jadhav in Mumbai.

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Delivered elevator prices are between 45 to 46 cents per pound for yellow mustard, 31 to 33 for brown, and 34 to 36 for oriental, according to Prairie Ag Hotwire.

Those prices are the highest they’ve been against contract prices in seven years, said Walter Dyck of Olds Foods Products.

“I think the market is moving now because it anticipates a small crop,” he said. “I think that caught a lot of people by surprise.”

This year’s production is estimated at 109,400 tonnes, compared with 198,000 in 2014, according to Statistics Canada.

Farmers only have limited amount of land they can put into oilseeds, so this may have just been one of those years where it was tricky for producers to work mustard into their rotation, Dyck said.

There was also a shortage of certified planting seed in Canada this year.

Despite minor complications, the mustard harvest has been progressing well in Saskatchewan and Alberta.

“My perception is that the mustard harvest is well-advanced. There are some regrowth issues, but I don’t think it’s that serious,” said Kevin Hursh, executive director for the Saskatchewan Mustard Development Commission.

“I think growers have been able to manage that more one way or another.”

In Saskatchewan, where most of the crop is grown, the mustard harvest is 72 per cent finished, compared with 78 per cent the year prior.

“Alberta has been lagging behind Saskatchewan, but I think this week will be fairly significant,” Dyck said.

After this week, he estimated, the Alberta harvest will be about 80 per cent finished.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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