March 29 – USDA Sees Much Lower US Flax Acres in 2018/19

Today, we got the USDA’s announcement of what 2018/19 flax acres are going to be in America. Here’s our breakdown of the numbers.

Today, we got the USDA’s announcement of what 2018/19 flax acres are going to be in America. Here’s our breakdown of the numbers.

The USDA’s Prospective Plantings report showed the market that American farmers will plant 225,000 acres of flax in 2018. This is 26% lower than last year’s 303,000 acres of flax that were seeded in the 2017/18 crop year.

Compared to the five-year average of 324,600 acres, 2018/19 flax acres are 31% lower.

Going into the report, there was no average US guesstimate for the flax crop. It is just our perspective. We are glad to see this as it signals lower US flax ending stocks in 2018/19. That is beneficial for Canadian producers.

In breaking the acreage down state by state, here’s what’s notable. In brackets, the first number is the change year-over-year, while the second number is the change compared to the five-year average.

• North Dakota:  170,000 acres (down 31% YoY; down 40% from 5-year average);
• 
Montana:  44,000 acres (down 13% YoY; up 41% from 5-year average); and
• 
South Dakota:  10,000 acres (up 67% YoY; up 4% from 5-year average).

Overall, this is the first pass at acres. If you look at the chart, the USDA has historically lowered its acreage number when the growing season is all and done.

If we add in Kazakhstan to the equation, we know that their acres are likely to stay the same or possibly expand in 2018/19 and thus, prices are going to stay very competitive there. In Russia though, it looks like flax acres will go down.

With prospects of lower US flax acres and a scenario of upcoming scarce flax supplies, we do except that demand from US flax crushers to pick up later in the fall of 2018/19. Of course, this is contingent on what goes into the ground here in Canada. We’ll know for sure on April 27th when Statistics Canada comes out with their estimates.

H/T: USDA
About the Author
Adrian Uzea

Hailing from a farm in Romania’s breadbasket, Adrian’s keen interest in agriculture inspired him to obtain a Master's degree in Ag Economics from the University of Saskatchewan. Adrian provides deep, original insight for Canadian farmers of grains, oilseeds, and other specialty crops to help improve their bottom line. He was previously a Market Analyst with a provider of grain marketing services like DePutter Publishing.