Mustard Price Forecast Sees Major Increase

In the wake of much lower-than-expected production estimate, Agriculture Canada has dramatically increased its 2021-22 mustard price forecast.

In updated monthly supply-demand estimates released late Friday afternoon, Ag Canada pegged the mustard season average price at a record $2,080/tonne or 94 cents/lb (producer price, FOB plant, average over all types, grades and markets). That is up $380 or more than 17 cents/lb from the government’s November forecast and is more than double the 2020-21 average of $885 (40 cents/lb).

The higher price forecast makes sense, with nearby cases of $1.30/lb already reported on the Prairies for Yellow and Brown mustard. Oriental prices are lower but still at or near $1.

Ag Canada’s December supply-demand estimates reflect Statistics Canada’s Dec. 3 crop production report which slashed the 2021 Canadian mustard production estimate to just 50,000 tonnes, down from the September estimate of 71,000 and roughly half the previous year. Amid the smaller crop, the 2021-22 total supply is estimated at just 97,000 tonnes, the lowest in modern times.

Mustard exports for 2021-22 are expected to be rationed at 70,000 tonnes – unchanged from November but down from 110,000 and 112,000 the previous two years – while domestic use is seen falling to only 17,000 tonnes, way down from 38,000 last month but still slightly above 17,000 last year.

Ending stocks are projected by the government at 10,000 tonnes, also steady from last month but far below 40,000 in 2020-21 and 61,000 in 2019-20. At 11%, the estimated stocks-to-use ratio is down from 32% and 39% the previous two years.

Although Ag Canada’s ending stocks and average price forecasts for other pulse and special crops were held steady from last month, all remain up sharply from a year ago, including lentils and peas which are almost double the 2020-21 level at $1,080 and $600/tonne, respectively.