Canadian Flax Crop Surpasses Expectations Amid Global Competition
Canadian flax production exceeded initial expectations this year, according to a trader in the market.
Statistics Canada estimated that farmers planted 503,200 acres of flax, marking the smallest crop since 1949. The agency is predicting an average yield of 21.5 bushels per acre, closely aligning with Saskatchewan Agriculture’s estimate of 22 bushels per acre for that province.
However, Tyson Fehr, procurement and marketing manager at Prairie Premium Products Inc., believes those projections are too low, at least in the eastern Prairies. He has heard reports of yields in the mid-40s from areas north and south of Winnipeg and the Red River region of Manitoba. Yields in the low-to-mid-30s have been common in southwestern Manitoba and southeastern Saskatchewan, with only a few areas producing in the 20s, where canola crops were a total loss.
Agriculture Canada is forecasting total production at 265,000 tonnes, the smallest since 1967, but Fehr anticipates a higher total based on the yields he’s observed. While the 2024-25 flax ending stocks will be tight, they may not be as constrained as previously expected. Fehr also notes that crop quality this year has been exceptional.
Flax prices have been steadily increasing, though there is a significant gap between high and low bids. The price difference between yellow and brown flax has also narrowed, with the premium for yellow flax around $3 to $4 per bushel—half the usual amount.
Fehr expects Canadian farmers will shift towards planting more brown flax and less yellow in the coming years, as demand for yellow flax declines and customers favor brown flax for its lower price. Additionally, brown flax offers advantages for farmers, with easier movement in the market.
Rayglen Commodities Inc. reports that flax bids were in the range of $16.50 to $17.00 per bushel as of October 16 for delivery before the new year. Slightly higher prices may be available for those holding out until the first quarter of 2025, with some growers in southeastern Saskatchewan potentially seeing up to $18 per bushel for February-March shipping.
Rayglen also notes that Canadian flax export activity could improve in 2024-25, providing some price support later in the year. However, there will be strong competition from the Black Sea region.
Russia is expected to harvest around 1.6 million tonnes of flax, according to APK-Inform, nearing the record crop from two years ago. However, Sergey Pluzhnikov, head of sales at Temporia Capital Company, disputes that estimate. He reports that while Russia planted 3.95 million acres of flax, growing conditions were far from ideal, particularly in Siberia. Dry weather early in the season followed by rain during the harvest negatively impacted both yield and quality. Pluzhnikov estimates the harvest at about 1.3 million tonnes, lower than the record 1.7 million tonnes in 2022.
Kazakhstan is forecast to produce 547,500 tonnes of flax, a 72 percent increase over last year’s poor crop of 318,300 tonnes. The country has been less active in export markets due to last year’s disappointing yields.
North Dakota is also posing competition for Canadian flax, with U.S. elevator bids significantly lower than those in Canada, drawing some domestic demand south of the border. Meanwhile, Canada is picking up some business in the European Union, taking market share from Russia, which now faces tariffs on flax imports into the EU.
Pluzhnikov added that despite the EU’s 10 percent import duty, European demand for Russian flax will continue, either through direct trade or via intermediaries and processed products.