Canadian organic markets holding steady, eyes turn to new crop

The 2021 growing season could see an increase in organic peas, flax, and oats (seen here). Photo: Greg Berg

By Phil Franz-Warkentin
Glacier FarmMedia staff

Organic grain bids held relatively steady across Canada in April despite large price moves in the conventional markets. End users are thought to be well supplied through previous contracts, with attention shifting to new crop growing conditions.

“A lot of folks are wondering why organic markets are not moving like conventional markets,” said Jason Charles of Pipeline Foods. “Demand is good at these price points, but processors and end users refuse to go higher,” he added noting that bids have to stay competitive or nothing will sell.

“Organic markets just refuse to go higher,” said Charles adding “the demand is good, but the production is high.”

He noted that ample production out of the United States combined with the general strength in the Canadian dollar and high freight rates were also weighing on Canadian prices.

The currency climbed above 81 U.S. cents during the week, hitting its strongest levels in nearly four years. “With such a strong Canadian dollar, trying to compete with U.S. values is tough,” said Charles.

“While the conventional markets hit the perfect storm… it’s almost the opposite in organics,” said Bill Longman of Sunrise Foods International in Saskatchewan. In addition to the bearish factors pointed out by Charles, Longman noted that the pandemic has also led to many consumers cutting food costs while lost business from the restaurant and entertainment sectors has also reduced demand for many organic products.

It’s a long game… the right play is to put your head down and keep on going. – Jason Charles

Every time there’s a bull run in the conventional market there is talk of reducing organic production, but Charles noted that “the farmers in it for the long haul do just fine.”

“It’s a long game,” said Charles on farming organically, adding “the right play is to put your head down and keep on going.”

It might take a couple of years to be realized, but Longman agreed that “the future looks bright for organic.” However, he added that the ongoing COVID-19 pandemic may hinder how long markets take to rebuild.

Looking to the 2021 crop, western Canadian fields are on the dry side in many areas although localized conditions can be highly varied. Moisture levels are generally thought to be sufficient to get crops going, but more precipitation will be needed through the growing season.

“We haven’t lost a crop in April yet,” said Longman.

Rotational issues will likely limit acreage shifts to a large extent, although traders generally expect to see less wheat and barley with a possible increase in peas, flaxseed and oats.