(Alice McFarlane/farmnewsNOW Staff)

By Alice McFarlane

Flax acres declining

Declining flax acres has Saskatchewan commission considering options

Jan 23, 2023 | 4:51 PM

MELFORT, Sask. – Canada no longer holds the key to the global flax market and that is having a ripple effect down to the producer.

Chuck Penner with Leftfield Commodity Research told those gathered at the recent Saskatchewan Flax Development Commission (Sask Flax) annual meeting that he didn’t have much in the way of good news for flax producers.

Penner said Canadian farmers have fallen out of love with the oilseed crop and that has meant lower flax acreage.

“I really like flax. I think it has lots of potential, but the biggest difficulty for flax is the increase in production in places like Russia and Kazakhstan, where it used to be the Canadian flax crop would set the tone for global markets because we dominated the trade,” Penner said. “Now the size of the crop in that part of the world is three or four times the size of the Canadian crop. We’ve had trouble exporting to China and Europe because those other two countries are supplying it at lower prices.”

As Saskatchewan flax acres have declined in recent years, this has had a negative impact on revenue for the flax commission.

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Sask Flax board chair Gregory Sundquist said the loss of revenue and the departure of executive director Wayne Thompson has forced them to make some tough decisions.

Sundquist said SaskFlax had already announced it has entered into a new management collaboration with the Saskatchewan Canola Development Commission (SaskCanola).

Two resolutions were passed at the annual meeting. Sundquist said the first resolution stated Sask Canola would assume the mandate of the flax commission to carry out research, advocacy, market development, grower relations and communication activities for flax.

“Sask Canola made us an offer to assist us with our administrative needs as a commission because our budget is decreasing as our production and exports go down,” Sundquist said. “At the same time, we had our executive director take a different position, so we needed both support and an executive director role, but also we needed the support in administration, bookkeeping, communications, and some agronomy.”

Sundquist said the second resolution stated Sask Flax will seek input throughout the year on restructuring the flax levy to a percentage-based system of 0.5 per cent of gross sales, effective Aug. 1, 2024.

“Currently, our levy is $2.36 per tonne and as our tonnage goes down that has a major impact on the income that we receive,” Sundquist said. “Prices have moved down quite a bit so if we go to a percentage-based levy system, we have the ability to reflect the value of flax and that value of flax will also determine the amount of income that comes to the commission.”

Sundquist pointed out the resolutions are taken under advisement and will be the starting point of conversations with levy producers this year.

“Especially on something as important as a levy increase, we have to work with our levy payers to find out if they think it’s appropriate or if they don’t, and what’s the appropriate level of that percentage of levy,” he said.

Sundquist said even with the challenges he believes flax is a good crop option for growers.

“Flax has a good net return. It’s a little cheaper to grow and there’s some great varieties coming out. I’ve talked to people that have had over 40 bushels an acre this year. It returned some pretty good money,” he said. “There’s issues with flax straw, I understand, but it’s a good crop for rotation. If we can increase the demand, I think it’ll be very profitable crop for Saskatchewan farmers.”

The canola and flax levies from producers will continue to be collected separately and SaskCanola and SaskFlax will maintain individual Board of Directors, as well as separate governance structures, according to Sundquist.

“There’s been no discussion about a merger at this point in time, we will remain separate as far as our boards, collecting separate levies but who knows, in the future, what we will find out as we go through this year and discuss things with our levy producers.

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alice.mcfarlane@pattisonmedia.com

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