Cheaper corn imports keep Canadian organic feed under pressure

Corn bids and offers have lately been far apart, with bids generally a dollar or more below the C$12 per bushel Ontario farmers would like to see. Photo: iStock/Getty Images

By Phil Franz-Warkentin
Glacier FarmMedia staff

Winnipeg | MarketsFarm, July 26 – Excessive moisture in Ontario and dryness in Western Canada at seeding time had led to some early uncertainty in the organic feed markets, but improved conditions and competing imports are keeping prices under pressure heading through the summer. Markets for most other commodities are stagnant, awaiting a clearer picture on the size and quality of the new crop.

Corn crops in Ontario got off to a rough start due to excessive moisture at seeding time, which has also raised questions over planted acres.

“There was some concern in May that we wouldn’t get corn in,” said Doug Harris, regional market advisor with BroadGrain Commodities in St. Marys, Ont. As a result, a number of end users booked coverage through imports, which “will keep a lid on corn values once we get into the new crop year.”

“It won’t be as lucrative as some people are thinking because of the bad weather we’ve had, because imports will keep things at bay for the moment,” said Harris.

Harris was not importing himself, but said Ukraine, Turkey, India, Romania and Argentina were primary sources of imported organic corn.

Bids and offers for corn are far apart, with bids generally a dollar or more below the C$12 per bushel Ontario farmers would like to see, said Harris.

Imported corn is quite cheap, driving the (feed barley) price down. – Dan Martinello

In the west, the situation is similar, with the cheaper corn keeping the organic barley market under pressure.

“Imported corn is quite cheap, driving the (feed barley) price down,” said Dan Martinello, a trader with Westaqua Commodity Group in Vancouver, B.C.  While Canadian feed supplies may be tight, he said the economics of importing cheaper corn would keep driving barley prices down.

Organic feed barley bids in the Prairies ranged from about C$7 to C$8 per bushel in late July. That compares with conventional bids that were still hitting nearly C$6 per bushel in southern Alberta in late July.

“Organics has been changing so much in the past few years… the farmer still wants quite a bit of money for organic, but the customer isn’t really paying that anymore,” said Mike Fleischhauer, with Eagle Commodities in Lethbridge, Alta.

As a result, he said growers were selling for lower than they’d like.

While the markets are slow for most organic commodities, “we’re still seeing quite a bit of activity on organic oats,” said Scott Shiels, grain procurement merchant with Grain Millers in Yorkton, Sask. He noted that after a good crop in 2018, many producers were still looking “to move that last little bit out of the bin.”

There is no one actively out there searching hard for organic product right now… it’s kind of in limbo. – Wes Reid

Beyond the feed and oat markets, “everything else is really dead,” said Sheils adding that “there’s nobody with a milling wheat bid out there.”

“There is no one actively out there searching hard for organic product right now… it’s kind of in limbo,” said Wes Reid, purchasing manager with W.A. Grain and Pulse Solutions in Innisfail, Alta.

He noted that crop conditions were “a hit or miss thing,” keeping some caution in the market.

“It’s all weather right now,” added Harris in Ontario.

Shiels said crops in Saskatchewan saw better development over the past month after a slow start, and the organic oat crop was looking decent.