Advertise in Print | Subscriptions
Published March 08, 2011, 10:57 AM

Big sunflower price rally this winter thanks to supply and demand

Wayne Lindberg has spent nearly 40 years in the sunflower industry. What’s happened in the past few months is, in his experience, almost unprecedented.

By: Jonathan Knutson, Agweek

Wayne Lindberg has spent nearly 40 years in the sunflower industry. What’s happened in the past few months is, in his experience, almost unprecedented.

There’s been a lot of volatility,” says Lindberg of Sunbird Inc. in Huron, S.D.

Sunflower prices — like those of many crops grown in the region — have been on a tear since the beginning of the year.

The price for NuSun — the dominant oil variety — shot from about $22.50 per hundredweight at the beginning of the year to more than $29 in late February at some area elevators, according to prices tracked weekly by Agweek.

Prices may have risen even more, or dropped substantially, by the time you’re reading this.

Prices have been so volatile for confection sunflowers that some companies dealing in the crop aren’t listing their prices, instead telling would-be customers to “call” or “ask.”

Lindberg, active in the industry since 1972, says the volatility reflect what he calls “tight s and d,” or supply and demand.

Among the factors in play:

- Drought last summer in Russia and Ukraine, both major sunflower producers, reduced supply.

- Dry conditions in Argentina, a major soybean producer and exporter, are expected to hurt production there, where the growing season is under way.

- The U.S. Department of Agriculture said in January that U.S. sunflower production in 2010 slipped from the previous year.

- Winter storms on the East Coast increased demand for sunflowers to feed to birds. Sunflower is among the most popular types of bird seed, according to the National Bird-Feeding Society’s website.

February was National Bird-Feeding Month, though it’s unclear what effect, if any, that had sunflower prices.

Unsold 2010 crop?

By and large, “Farmers have done a very good job of marketing on an uptick,” Lindberg says.

He’s uncertain of how many unsold sunflowers remain from the 2010 crop.

Glenn Kalsnes, purchasing manager for CHS Sunflowers in Grandin, N.D., says unsold sunflowers remain — some of good quality, some not so good — but that it’s difficult to estimate how much.

He says this year is similar to 2008, when prices soared before falling back in late winter.

Contracts for 2011 sunflowers also have shot higher this winter, part of the annual “battle for acres” — the trade’s desire to make sure that enough acres of a crop are planted to meet the need for it.

Kalsnes says sunflowers will get their share of acres, even though prices of competing acres have rallied, too.

“Sunflowers are very good option,” he says.

North Dakota accounted for about 44 percent of U.S. sunflower production in 2010, leading the nation, USDA says.

South Dakota, where sunflowers are growing in popularity, accounted for about 28 percent, ranking second.

Minnesota ranked fifth, accounting for about 4 percent of U.S. production.

Tags: