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Published April 22, 2013, 09:21 AM

Flax prices rise

An increase in the price of American-produced flax could be caused by a decline in flax stocks and competition with Canada.

By: Jonathan Knutson, Agweek

Park River, N.D., farmer Mark Hylden has been growing flax for nearly 40 years. He’s strongly committed to the crop, which three generations of his family have raised.

It’s unclear if other flax growers in North Dakota, the dominant U.S. producer of the crop, share that commitment. Competition from other crops, particularly corn and soybeans, is strong, and some farmers in the state are expected to switch to other crops.

But a recent surge in flax prices and what’s shaping up to be an unusually late spring could generate greater-than-expected interest in flax

In late March, U.S. flax acreage this year was estimated at 250,000, down from 315,000 from a year earlier, according to the National Agricultural Statistics Service, an arm of the U.S. Department of Agriculture.

Since then, flax prices have risen to roughly $15 per bushel at area grain elevators surveyed weekly by Agweek. That’s about a buck per bushel more than a month earlier.

The price increase reflects a decline in flax stocks from a year ago, as well as the anticipated U.S. acreage decline and reports that Canadian farmers may plant less flax this year, says Frayne Olson, crops economist for the North Dakota State University Extension Service.

Canada is the world’s leading producer and exporter of flax.

Flax is a niche crop, even in Canada, and getting a good handle on it is difficult, says James Loewen, grain manager with Bunge Canada in Altona, Manitoba. But he notes that Canadian farmers’ interest in soybeans is growing.

Soybeans also are increasingly popular in some parts of North Dakota where flax traditionally is grown. Soybean prices have been attractive, and the crop is considered relatively easy to grow, Olson says.

Smaller-market crop

The recent upturn in flax prices reflects the flax industry’s effort to generate more interest in growing the crop, Olson says.

“The bottom line is, they (the flax industry) know they have to be competitive on a profitability standpoint. Everybody is trying to figure out what’s the right price to get the acres they need,” he says.

At the same time, flax is what Olson calls a “smaller-market crop” and planting too many acres of it could lead to overproduction.

“It’s very easy to overproduce these crops,” he says.

North Dakota typically grows more than 90 percent of U.S. flax. Montana, South Dakota and Minnesota account for the rest.

Once a major player

Flax was a major crop for decades in North Dakota. Linseed oil, also known as flaxseed oil, was used widely in paint and floor coverings. But acreage fell steadily as the use of linseed oil declined.

North Dakota farmers planted 3.2 million acres of flax in 1955, 1.7 million acres in 1970 and 460,000 acres in 1985, with flax acreage in the state bottoming out at 80,000 in 1996. For every 40 acres of flax planted in 1955 in North Dakota, only 1 acre was planted in 1997.

But flax acreage in the state subsequently rebounded because consumers increasingly see flax as a healthy product and because flax is playing a bigger role in livestock feed.

Demand for flax is strong, says Sheri Coleman, executive director of Bismarck, N.D.-based Ameriflax, a trade organization that represents North Dakota flax producers.

Higher flax prices, however, are needed to get many farmers to grow it, she says. “Every producer has their own price point,” she says. New flax varieties hold promise, she adds. Hylden notes that the NASS estimate, based on a survey of farmers in early March, is just a guess.

A late spring could encourage some farmers to switch from other crops, particularly corn, to flax, he says.

“We’ll see what the spring brings,” he says.

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