The 2021 growing season certainly has been an interesting one across the U.S. Northern Plains. This season started out warm and dry, with planters rolling in early April for many crops across most of the production area.

Rains have been hit-and-miss all season across the major sunflower production area. By July, severe to exceptional drought conditions had a grip that did not let up on the sunflower-growing regions of the Dakotas and Minnesota. At that point, 25% to 35% of the sunflower crop was rated by USDA in very poor to poor condition, with the majority in fair condition.

Last year, the Dakotas experienced record sunflower yields, averaging between 1,800 and 1,900 pounds. It’s doubtful we’ll see those yields topped given the severe to exceptional drought conditions this year. I guess we’ll know more once we get into harvest.

USDA will give its first estimate of U.S. sunflower yield and harvested acres this month of August. Per USDA, area planted to oil-type sunflowers in 2021 decreased 16% from 2020 and totals 1.25 million acres. Confection sunflower acres decreased 43% from 2020 and totals 130,000 acres. Initial industry estimates of total 2021 U.S. sunflower production range from 2.1 billion to 2.3 billion pounds, which is about 25% lower than last year’s crop.

Increased demand

The reduced planted acreage and expectations for significantly lower yields than last year will tighten up the sunflower seed supply quite dramatically in the 2021-22 marketing year. There is a strong likelihood that price premiums will be in place as crushers and bird food companies compete for available seed. The biggest unknown will be the drought’s impact on production in the Dakotas, the largest sunflower producers. A significant drop off in yield will impact the market.

The potential drop in production promoted crush plants to rollout 2022 new-crop contracts earlier than normal. As of late August, 2022 new-crop NuSun cash contracts were $27, with act of God contracts at $26.50. High-oleic contracts were $27.25 cash and $26.75 AOG.

Sunflower is the only oilseed that pays premiums for oil content above 40%. At the crush plants, premiums on oil content above 40%, at a rate of 2% price premium for each 1% of oil above 40%, pushes a contract 10% higher per cwt with 45% oil content gross return.

The AOG $26.50 contract increases to $29.15, and the cash $27.25 contract moves up to $30. Crushers will want to regain the acreage lost this year so new-crop sunflower prices are expected to remain very competitive in relation to other crops.

In preparation for harvest, producers are cleaning out storage bins and deliveries to crush plants have been on the increase. This along with new-crop deliveries could pressure prices temporarily in the near term. In the months ahead, variables that will affect the markets in addition to supply-and-demand factors will likely include strength of the U.S. dollar and uncertainty in demand from China. To keep up with price movement, visit sunflowernsa.com.

Sandbakken is executive director of the National Sunflower Association.