All quiet on the organic market front

Organic growers have watched conventional crop prices rise over the past few months which has cut into their premiums. Photo: iStock/Getty Images

By Phil Franz-Warkentin
Glacier FarmMedia staff

The organic grain market remains relatively quiet across Canada heading into the winter, with the excitement of harvest in the rear-view mirror and most of the activity now confined to filling old contracts. Large supplies seem to have many end users on the sidelines for the time being.

“Our market has really flat-lined,” said Michael Messer, of Rein Agri Food Group in Tisdale, Sask. He noted that there were ample supplies in the bins of both farmers and buyers, with very little activity in the spot market.

“It’s really a hand-to-mouth market,” said Messer. Aside from possible spot opportunities, he expected buyers wouldn’t be back in the market in a large capacity until the New Year.

The phone is extremely quiet… other than the old contracts, there is zero movement. – Michael Messer

In the meantime, organic growers have watched conventional prices rise over the past few months, cutting into their premiums.

“For the most part, it’s been flat-lined on the organic side,” said Messer, adding “it will be tough to keep people excited about (growing organic crops.”

“The phone is extremely quiet… other than the old contracts, there is zero movement,” added another Saskatchewan-based trader who preferred to remain anonymous.

The dealer said he would normally be fielding daily calls from customers looking to buy, but in his 30 years in the industry has never seen things so quiet. He speculated that buyers were likely overbought and now chewing through their product, but noted that a slowdown in packing plants in the United States due to COVID-19 and difficulties staffing were another likely factor.

We don’t work on an emotional market like conventional… it’s straight economics. – Andrew St. Jean

“The cure for high prices is high prices, and the high prices in organics is gone,” said the dealer.

“We don’t work on an emotional market like conventional… it’s straight economics,” said Andrew St. Jean of Beechwood AgriServices in Parkhill, Ont.

Ontario had a much better crop in 2020 compared to the previous year, and the ample supplies were more than enough to meet the demand.

“We’re not using more, and we’re producing more,” said St. Jean adding “there are new growers every year.” As a result, he expected some of the newer converts to growing organic grain may not stick around. “You’re not going grow organic corn for C$8 if you can grow conventional for C$6, with a lot better yields, more tools in your toolbox, and go to the cottage all summer.”

While cheaper prices may dissuade some grain growers, they should also be encouraging more interest in the livestock side, said St. Jean. “The economics for feeding organic livestock make more sense at C$8 (per bushel corn), so there may be more demand on that side.”