Flaxseed and Linseed Oil
Flaxseed, also called linseed, is an ancient crop that was cultivated by the Babylonians around 3,000 BC. Flaxseed is used for fiber in textiles and to produce oil. Flaxseeds contain approximately 35% oil, of which 60% is omega-3 fatty acid. Flaxseed or linseed oil is obtained through either the expeller extraction or solvent extraction method. Manufacturers filter the processed oil to remove some impurities and then sell it as unrefined. Unrefined oil retains its full flavor, aroma, color, and naturally occurring nutrients. Flaxseed oil is used for cooking and as a dietary supplement as well as for animal feed. Industrial linseed oil is not for internal consumption due to possible poisonous additives and is used for making putty, sealants, linoleum, wood preservation, varnishes, and oil paints.
Flaxseed futures and options trade at the Winnipeg Commodity Exchange. The futures contract calls for the delivery of 20 metric tons of flaxseed. The contract is now priced in U.S. dollars per metric ton.
Prices - The average monthly price received by U.S. farmers for flaxseed in the 2007-08 marketing year (through December 2007) rose by +73.4% yr/yr to $10.67 per bushel from $6.16 per bushel in the 2006-07 marketing year.
Supply - World production of flaxseed in the 2005-06 (latest data available) marketing year rose sharply by 42.9% yr/yr to a record high of 2.957 million metric tons from the 13-year low of 2.011 million metric tons posted in 2001-02. The world's largest producer of flaxseed is Canada with 39% of world production in 2005-06, followed by the U.S. (17%), China (16%), and India (8%). U.S. production of flaxseed in 2005-06 rose sharply by +88.1% yr/yr to a new record high of 19.695 million bushels.North Dakota is by far the largest producing state of flaxseed and accounted for 94.0% of flaxseed production in 2006, followed by South Dakota with 2.1% of production and Minnesota with 1.1% of production
World production of linseed oil in 2005-06 fell -41.5% yr/yr to 697,000 metric tons. The world's largest producers of linseed oil are China (with 19% of world production in 2005-06), the U.S. (23%), Belgium (13%), and India (10%). U.S. production of linseed oil in 2004-05 (latest data available) fell by -4.2% yr/yr to 203 million pounds.
Demand - U.S. distribution of flaxseed in 2004-05 (latest data available) fell -5.9% yr/yr to 13.996 million bushels. The breakdown was 75% for crushing into meal and oil, 14% for exports, 7% for residual, and 4% for seed. U.S. consumption of linseed oil (inedible products) in the 2006-07 marketing year rose +12.5% yr/yr to 56.849 million pounds.
Trade - U.S. exports of flaxseed in 2004-05 (latest data available) fell by -20.0% yr/yr to 2.013 million bushels. U.S. imports of flaxseed in 2004-05 fell by -22.7% yr/yr to 3.537 million bushels.