It's hard for this ketchup lover to imagine that mustard is viewed as the fastest growing condiment and the "it" condiment for the foodies, but this is exactly the way the condiment is being portrayed. The Wall Street Journal recently ran an article titled The Yellow Commodity Hotter than Gold. In this article, a restaurateur states "Mustard is the new butter. We have guests asking for it for their bread and their fries."
Reports such as this are music to the ears of the mustard growers of Western Canada. Saskatchewan is suggested to produce 70-80% of the country's mustard, with the balance coming from Alberta. Combined, these two provinces supply some 70 to 80% of the mustard seen in the global trade.
Canadian production is set to increase in 2013/14 after three years of consecutive production declines. Statistics Canada's recent acreage report has indicated mustard will be produced on 340,000 acres, up 5,000 acres from 2012, although below the 346,000 acres indicated in the earlier March intentions report, which was already considered too low by some. Meanwhile, the most recent acreage report from the USDA has United States growers backing off 12% to 45,000 acres, which would be the fourth consecutive acreage decline.
The rapidly declining stocks/use ratio since 2010/11 as indicated on the attached chart is a reminder of the tightening stock situation, which will continue to be most supportive of price. Note that this is taking place while demand is increasing. The Wall Street Journal indicates that mustard not only has an almost global appeal, but is also viewed as healthy. They state a campaign utilized by French's, who suggest "Farmers make our mustard zero calories, not scientists."
Agriculture and Agri-Food Canada has forecast a price range of 36 to 37 cents /lb for the upcoming year, while new-crop bids can currently range as low as 28 cents for oriental mustard to 42 cents for yellow. This market could face volatility given any degree of production uncertainty.
Cliff Jamieson can be reached at firstname.lastname@example.org
© Copyright 2013 DTN/The Progressive Farmer. All rights reserved.