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Trent Klarenbach discusses the current state of the canary seed market with David Nobbs from Harvest Grain.
They review the recent downturn in canary seed prices, which fell from 25 cents to 22 cents per pound, similar to trends seen in the green lentil market.
They attribute the price reduction to oversupply and higher yields. Historical price fluctuations and market dynamics are analyzed, highlighting the challenges growers face due to high input costs and fluctuating demand.
They also discuss potential future trends and the importance of understanding external market catalysts.
The conversation underscores the necessity for growers to make informed decisions about their crops to manage financial stability.
Video Summary
The canary seed market is experiencing an oversupply, influenced by higher-than-expected yields and reduced demand.
Similar trends were observed in the green lentil market, with quick price corrections due to increased yields.
Historical data indicates recurring cycles in the canary seed market, with significant price drops often followed by periods of recovery.
Current canary seed production is estimated at 300,000 tons, with a carry-in of approximately 60,000 tons, leading to an oversupply compared to the typical demand of 150,000 tons.
Acreage for canary seed increased in 2024 to approximately 290,000 acres, with further increases in 2025 in regions such as Southeast and West Central Saskatchewan.
Challenges in export demand are exacerbated by competitors like Argentina and issues such as the phyto sanitary restrictions in Brazil, which limit Canadian exports.
Market participants, including buyers, have been cautious due to consistently falling prices, leading to sluggish demand.
Technical analysis suggests potential support levels for canary seed prices at 18 to 20 cents, with a risk of further decline to 13 cents if these levels are not maintained.
The Canadian farmer's decision to sell significantly impacts the canary seed market due to their substantial influence on supply.
Industry capacity for cleaning and shipping special crops, particularly canary seed, is becoming a limiting factor, potentially leading to "no bid" situations as seen in 2013.
Growers are advised to consider cash flow requirements and make proactive marketing decisions, rather than waiting for market recovery, as current market conditions may persist.
Farmers are advised to manage their cash flow requirements proactively, especially for obligations due between now and Christmas, and not to delay selling until later in the marketing year (e.g., Crop Production Week in January or February).
It is suggested that farmers avoid waiting for a market recovery, as the current low prices may persist or even worsen in the coming months.
Farmers should focus on "dollars per acre" rather than "cents per pound" due to potentially large crop yields, as even at lower per-pound prices, a high yield can still result in substantial per-acre returns.
The advice includes making marketing decisions without emotion and being willing to "take the first loss" to prevent small losses from escalating, thereby ensuring business survival.
Given the oversupply and potential for further price drops (e.g., to 18-20 cents), farmers should consider selling now, as holding onto inventory for extended periods incurs significant storage and interest costs, diminishing real value over time.
It is emphasized that farmers' collective decisions to sell or hold their crop will ultimately drive the market price, more so than the trade.
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Nothing written, expressed, or implied here should be looked at as investment advice or an admonition to buy, sell, or trade any security or financial instrument. As always, do your own diligence.
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