2005 Flax Production Contracts

[nw9flynn]

I brought this topic up first under "New Years Resolution" and wd9 thought that I should start a new thread so here it is:
One of the few bright spots so far in '05 seems to be the new crop production contract with flax. I am hearing $8.00/bu. We are making money at that price on our farm. What has everyone else been hearing? Also what do you think is going to happen with the price throughout the year? I am thinking it will go lower as flax acerage should go up. What is everyone's opinion?

[melvill]

Farmers are odds-players - have to be to survive. Sometimes, however, we don't know exactly what the odds are.

In this case, the question is 'what are the odds of getting various prices for flax'? Just recently I re-figured the odds of flax prices achieving various levels. Between August 1995 and July 2004, cash flax prices in southern Alberta reached $8.00/bu. or better only 39% of the time. That means that during that 10 years flax prices were below $8.00/bu 61% of the time.

The next question is 'should I wait for a higher price before I pre-price some of my 2005 production?' $8.50/bu. (or higher) only happened 22% of the time. $9.00/bu. (or higher) only happened 16% of the time.

You might argue that the recent high flax cash prices would change or improve the odds or getting higher prices. However, we've had flax prices, as high as they are now, in the past and they never last very long.

So is $8.00/bu good? It's not the best but it's pretty good. Remember, too, that the worst enemy of high prices is high prices.

[Incognito]

$8.50 new crop is bid at the Crop Production show. $14.00 FOB SK traded yesterday for old crop.

[melvill]

Where was that $8.50 bid? What company and what delivery point?