Feed grain prices down, market looking to new crop

Cereal grains Photo: Thinkstock

By Jade Markus
OrganicBiz staff

Feed grains are dominating the organic market this month, as oversupply drives those values down.

New crop speculation and weather talk has also emerged on the horizon.

“Especially on the feed side, there’s just a lot of spring-thrashed grain out there that guys are just trying to move,” said Tristan Gill of Westaqua Commodity Group Ltd. in British Columbia.

He added that those values have become cheap due to an abundance of supply.

The United States, one of Canada’s biggest organic export markets, also has ample stocks of feed grains, adding further pressure.

“I think on the feed side, guys are holding out for higher prices, but I don’t know if they’re going to come,” said Bryce Lobreau of Pristine Prairie Organics in Manitoba.

This year’s growing season could add further downside as supplies mount.

Lobreau also feeds organic cattle. He says there is strong demand in that market, but high inventories are keeping prices in check.

You’ve got to make sure you’ve got a sharp price to get those acres in the ground. – Jason Breault, RW Organic Ltd.

On average, Lobreau makes a dollar per hundredweight above conventional prices, and right now that profit margin is closer to 60 cents.

New crop

“Overall, what I kind of see for new crop is demand is up — across the board — but so are acres,” Gill said.

It’s a similar situation outside of the Prairies.

“We’re not seeing the same fluctuations in new crop pricing we’ve seen the year past,” said Andrew St. Jean of Ontario-based Beechwood Agri Services Inc.

Beechwood deals with organic wheat, oats, barley, soybeans, corn and peas.

St. Jean said the market is getting a better handle on supply, creating less fluctuation in the market.

“It’s showing a more flat trend than we’ve seen in the past.”

But there are still highs and lows in new crop pricing.

For mustard, buyers are offering strong values to incentivize producers.

“You’ve got to make sure you’ve got a sharp price to get those acres in the ground, in the rotation. That’s something that we have again this year,” said Walter Dyck of mustard buyer Olds Products in Alberta.

But not all prices are lending themselves to increased production.

“It sounds like there’s going to be a lot of peas put in this year,” said Jason Breault of RW Organic Ltd. in Saskatchewan.

“Oats are down on price, and I think some of the guys that grow oats are going to throw some peas down as well.”

As far as weather this year, Breault said he’s watching moisture conditions at seeding time in the short-term.

“Too much moisture at seeding and things don’t get seeded, or not enough and things don’t germinate,” he said. “But it’s hard to tell until it happens.”