Farmers in Western Canada are expected to plant fewer acres of flax in the spring because of poor yields in 2012, industry officials said.
Agriculture and Agri-Food Canada estimated in its Jan. 28 supply/demand report that farmers in Canada would plant around 864,868 acres of flax in the spring of 2013, down from 980,000 acres seeded in 2012.
Paul Martens, with Prairie Flax Products at Portage La Prairie, Man., said farmers who seeded flax last year will also look at seeding other crops in the spring instead because of lacklustre prices.
There's been little price movement in the cash market for flax in Western Canada over the past couple of months because a lack of shipments to Europe has kept a lid on the market.
Even though canola values have rallied in recent weeks, flax has remained flat due to the lack of demand from Europe, Martens said.
According to Prairie Ag Hotwire, flax prices delivered to the elevator in Western Canada ranged from $13.70 to $14.75 a bushel as of Feb. 1, which compares to month-ago prices of $13.70-$14.50 a bushel.
Prairie farmers will probably look at planting soybeans, especially in eastern Manitoba, instead of flax this spring, Martens said. Growers will also be looking at replacing flax acres with canola and wheat.
Even though flax is cheaper to grow than canola, farmers will still look at canola because it generally yields better and prices are stronger, he said.
Wheat is attractive to farmers because it's inexpensive to seed and generally yields well, he said.
"Last year guys were pulling off still some really good yields, and with the wheat board gone, they could market it right off the field," he said. "A lot of guys made almost $9 a bushel on their wheat. So if they were getting 60 bushels to the acre, they were getting a pretty good return on it."
But, what farmers actually decide to plant in the spring instead of flax will all depend on what happens with the weather in the U.S., Martens said.
"If the U.S. continues in the drought, then the wheat and the soybean prices will probably go up," he said. "So, that will probably dictate a lot of what guys decide to do."
-- Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.