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Published July 06, 2010, 10:27 AM

Flax prices fly high

Rain has poured down on Canada’s prairie provinces, and that’s sent U.S. flax prices shooting upward.

By: Jonathan Knutson, Agweek

Rain has poured down on Canada’s prairie provinces, and that’s sent U.S. flax prices shooting upward.

But higher prices — roughly $2 per bushel more than a month ago — have come too late to be of much help to U.S. producers.

“It’s not going to do much good now,” says Roger Krueger, manager of Cando (N.D.) Farmers Grain & Oil Cooperative.

Farmers have little old-crop flax to sell, and it’s too late to plant flax, he says.

North Dakota leads the nation in flax production, accounting for more than 90 percent of U.S. output. South Dakota ranks second, Montana third and Minnesota fourth.

Flax generally yields best when it’s planted in late April or early May, according to information from North Dakota State University in Fargo.

Flax has a 55-day vegetative period, a 25-day flowering period and requires about 35 days to mature, with wet conditions lengthening the maturation period, NDSU says. That means flax planted in late June or early July wouldn’t be ready to harvest until well into October.

It’s also too late to plant flax in Canada, with June 20 the final planting deadline for crop insurance in the prairie provinces.

Canada is the world’s leading producer and exporter of flax. Saskatchewan, Manitoba and Alberta produce virtually of the country’s crop.

Before the June 20 deadline, weeks of heavy rains and flooding in parts of Saskatchewan and Alberta kept many farmers from planting flax and stressing fields that had been planted, says Mike Jubinville, editor of Winnipeg, Manitoba-based Pro Canada Farmer.

“There’s a looming production disaster,” he says.

Fewer Canadian acres

Statistics Canada estimated flax acreage at 1.285 million acres, down from 1.7 million in 2009. The actual 2010 number might be even lower than

the estimate because the latter was based on a survey of farmers in late May, before all the bad weather in June.

The rally in flax prices is driven by production concerns and has nothing to do with changes in demand, Jubinville says.

Flax averages about $10 per bushel at area elevators surveyed weekly by Agweek, though the average price can change substantially from day to day.

A month ago, the average price was about $7.70.

Flax prices, like those of most other crops grown in the region, have fluctuated greatly in recent years.

Flax in North Dakota averaged about $6 per bushel in 2006, $13 per bushel in 2007, $12.70 in 2008 and $8.75 in 2009, according to the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.

It’s unclear how much long-range impact Canadian weather problems will have on the U.S. flax market, says Ernie Hoffert, general manager of Carrington, N.D.-based Reimers Seed Farm. Flax is his company’s main product.

“This is totally uncharted water,” he says.

Looking ahead

For decades, flax was a major crop in North Dakota. Linseed oil, also known as flaxseed oil, was used widely in paint and floor coverings.

But acreage fell steadily as the use of linseed oil declined.

In 1955, farmers in the state planted 3.2 million acres of flax. That dropped to 1.7 million acres in 1970 and 460,000 acres in 1985, bottoming out at 80,000 acres in 1996.

Think of the decline this way: For every 40 acres of wheat planted in 1955, only 1 acre was planted in 1996.

Since 1996, flax acreage has rebounded. This spring, North Dakota farmers planted 395,000 acres, USDA estimates.

Hoffert is optimistic about flax’s long-term prospects.

He says there are good reasons to think demand for flax will continue

to grow. Consumers increasingly see flax as a healthy product, and flax is playing a bigger role in livestock feed, he says

“Those are the things we need to look to for growth,” he says.