Bidding for Acres
Friday, January 3, 2003
filed under: Utilization/Trade: Confection-Non-oil
New crop confection sunflower contracts are expected to be offered as soon as January in the Northern Plains (some contracts are already being offered in the High Plains), and with NuSun oil processors bidding aggressively for NuSun acres in 2003, confection buyers realize that they too will need to be aggressive on price to attract confection acres.
“All commodities have much less carry-in, and will be bidding for acres this year,” says Tim Petry, field production manager for Dahlgren, Crookston, Minn. “Confection sunflower will have to be strong to get its acres.”
Like last year, seed size will be a premium. “We will encourage variety selection and agronomic practices that produce large quality seed,” he says.
With new crop NuSun prices hovering around $12/cwt, plus as additional oil premium, new crop confection contract prices will likely be in the mid teens, says Chris Bohn, purchasing manager for Harvest States Sunflower (Agway) in Grandin, N.D.
“If you’re looking to market confections any time of year, consider growing the long types, which tend to offer more market choices and are less sensitive to supply timing issues,” says Bohn. “the rounds may have slightly better yields, particularly in the northern most growing areas, but may have slightly less marketability.”
In evaluating hybrids, pay close attention to insect and disease ratings, he advises, which can have just as much weight on profit as yield. “If you have insect pressure, consider hybrids with a shorter bloom period. Single crosses tend to bloom more uniformly then triple crosses, so that should be kept in mind when considering pest treatments.”
It’s best to be conservative when trying new hybrids, he advises. “Start it out on a small amount of acres. Take something that’s working for you and augment it with a new hybrid, which might have swings in production performance.”
It’s possible confection processors may contract more sunflower this year to meet their needs, says Petry, “since the whole confection picture is getting more specific.”
Bob Majkrzak, president and CEO of Red River Commodities, Fargo, N.D., anticipates sourcing more confection sunflower in the High Plains. “That area—Nebraska, Texas, Colorado, Kansas—is becoming a real important region for us. With growers down there looking to make more efficient use of their irrigation, and realizing that sunflower is beneficial to their crop rotation, I’m anticipating a better market out of that region.”
The High Plains growing season typically results in a better overall in-shell product than what is grown in the Northern Plains, says Majkrzak. “The same hybrid planted in both regions would typically result in a better in-shell product in the south. That’s not a knock on growers in the north. It’s just a function of the growing season,” he says. “I have different expectations in the northern region, where we make better use of confections for the kernel market. So we want to make sure that, generally, we have enough acreage in the southern region for the in-shell market, and acreage in the north for the kernel market, and that the right hybrids are grown to maximize production in both places.”
Majkrzak prefers hybrids grown specifically for the hulling market, rather than oil-types bred for hulling. “I can get a much better percentage of the total crop with a hybrid specifically targeted for the hulling market, as opposed to taking an oil type seed and making it work for hulling.”
As for in-shell, the market will continue to demand confections with a large seed size; good color, with a nice black seed coat and white stripes; extremely low insect damage; quality seed that is not damaged by poor handling or storage, and a low tolerance for disease.
“Sclerotinia in some areas last year will mean we’ll probably try to move the crop in 2003 around a bit, and watch where we contract a lot of it,” says Majkrzak. “Some of the occurrences with Sclerotinia are because there’s too many host crops for it—soybeans, dry edible beans, and canola. And it’s a matter of timing. If we don’t get a wet spell late August to early September, we’ll be just fine.”
Majkrzak says that in 2003, “everybody, including high oleic buyers, is going to need a price premium to get their contract put out there. If NuSun is $12 to $12.50 and hullable is 25 to 75 cents over the crush price, typically confections would be $2.50 to $3.50 over the crush price. It has to be. There’s got to be a price premium built into the confection price to cover the grower’s additional expenses, and to give additional opportunities to make money with a specialized product. If you don’t compensate the grower, why would he want to grow it?”
Petry says that in the end, economics will dictate the sunflower market, with the right price attracting supply.
“Personally, I love to see higher prices. For growers who are our customers to return more on their investments is nothing but a good thing, and anything that’s good for the sunflower market is good for us too. Sunflower growers should have excellent market options to choose from this year, and we just hope some growers choose to grow confection sunflower.”
Confection buyers can be found on the National Sunflower Association website, www.sunflowernsa.com. Click on the link, “Confection/Non-Oil” then “Producers.” Scroll down, then click on the link to “Confection Processors.”– Tracy Sayler