By Jade Markus
Winnipeg, March 31 (CNS Canada) – New crop organic bids have started to emerge in Western Canada, setting the market up for growing pulse production, while stockpiles of grain put a damper on values.
- Read more: Organic Price Quotes: Late March
Pulses still strong
The 2016 International Year of Pulses is proving a tough act to follow, as values are off of the highs notched last year, though prices for peas, lentils and beans are still expected to be strong this season, as demand underpins the market.
“Pea protein, pea isolates, flour for gluten free markets, that’s definitely growing quite a bit,” said Richard Reimer, acting marketing manager of Growers International Organic Sales Inc. in Winnipeg, Manitoba.
“That’s probably going to change the landscape of what growers are going to be seeding this year.”
The expectation for high acres is expected to create a downward effect, though prices remain largely favourable.
Lots of grains
While still much more profitable than their conventional counterparts, organic grain prices are feeling pressure from high stockpiles.
This year is one of the first years that the market has seen a big carryover in major crop groups, said Reimer, naming wheat as one commodity with high stocks.
One likely cause is high organic grain acres in the US curbing demand for Canadian products.
“Since a lot of the organic grain purchased in the Canadian Prairie goes south, it would make sense that US organic millers would purchase their grains closer to home if they could,” Laura Telford, organic sector specialist with Manitoba Agriculture said via email.
Organic oats are also seeing unusually high stocks this year.
“There’s going to be a bigger carryout of organic oats than we’ve ever seen before. Probably the largest that we’ve ever had,” said Scott Shiels of Grain Millers, Inc., in Yorkton, Saskatchewan.
Organic acres were up last year, “and the crop that did get harvested was a big crop. We’ve heard more guys say it’s the best crop of oats they’ve ever grown than not,” Shiels said.
Rye hasn’t escaped the grain glut either, said Tristan Gill of WestAqua Commodity Group in Vancouver, British Columbia.
“There’s nothing there, there’s lots of it around and no one wants it,” he said.
But from an agronomic standpoint, the commodity works well in rotation, which means some may still choose to seed it.
Spelt prices have also declined significantly with high inventories, said Alberto DeLogu of Petrolia, Ontario-based Field Farms Marketing. DeLogu deals primarily with market participants in Western Canada.
“Stockpiles of spelt are so high, because it’s one of those cyclical crops, boom or bust,” he said.
The crop saw two “boom” years as prices fluctuated, then crashed, especially with competing supplies from Europe.
“Then there was too much spelt everywhere.”
On the upside, prices for malt barley are strong, Gill said.
Lack of buyer interest
Many buyers, especially on the grain side, still have their needs filled, creating a lack of momentum in that market.
“We’re about half bought for the year already. So we’re going to be a little while before we get back in the market again,” Shiels said.
It’s a similar situation in the US.
Normally this time of year, Eric Fast, grain procurement and logistics at St. Paul, Minnesota-based Nature’s Organic Grist, is buying from the spot market.
“But I’m still covered,” Fast said, adding that coverage could last until new crop grains start rolling in.
“I’m usually kind of measuring how much old crop is out there, and going ‘alright, do I need to be snatching it up to get me through new crop,’ and this year because, I still have so much stuff contracted, I haven’t really looked at it that way,” he said.
Though it’s early on, the US is primed with the potential for good acreage and growing conditions, he said.
Producers in areas of South Dakota have already started early seeding.
Strong and stable
Flax has continued to be a steady product in the organic sector, Gill said, adding that the market has been in a range for a number of years.
“It is probably the most stable of any of the organic products.”