Demand for organics is missing

The current organic market for flax is about twice the price of its conventional cousin. Photo: Thinkstock

By Glen Hallick
Glacier FarmMedia staff

Prices for organic grains, oilseeds and pulses have largely remained steady throughout January with dealers left wondering why demand has disappeared.

“I don’t understand where the demand has gone. Normally there should be good demand,” commented Mylo Chubb of Stonehenge Global Seeds in Assiniboia, Sask.

“It looks like we could be losing some growers. There are some people who are pretty frustrated. They can’t move their product and if they can, they’re selling it for feed on the conventional side,” Chubb added.

Otherwise the organic sector has remained quiet, with little movement in prices. If there has been, the prices have pulled back, he said.

“Organics are very supply and demand driven,” stated Andrew St. Jean of Beechwood AgriServices in Parkhill, Ont.

He explained that organics are very different from the conventional market, which means organics rarely follow any of the trends in the conventional crops.

It looks like we could be losing some growers. There are some people who are pretty frustrated. – Mylo Chubb

One factor that’s played a role in keeping price for organic feed grains down has been good local supply, St. Jean noted.

To Barbara McGillivray of Sure Source Commodities of Petrolia, Ont. the organic can follow the trends in the conventional side – just two or three months later.

Harro Wehrmann of Wehrmann Grains and Seeds in Ripley, Ont. said prices for feed soybeans are pretty much on par with those for food soybeans.

“For the time being that’s a good thing,” he said, and agreed with St. Jean that the supply in Ontario is good.

Wehrmann also commented that the drop in the United States dollar has weighed on values.

Another factor in organic supply and demand is overseas demand.

“China and India imports are down,” noted Dan Martinello of the Westaqua Commodity Group in Vancouver, B.C. and suggested that prices have the potential to climb higher come spring.

Scott Shiels of Grain Millers Canada in Yorkton, Sask. concurred. That while there is a decent supply, when seeding time gets closer that could generate a boost in prices.

One odd thing Shiels has noticed in the organic market is that flax is about twice the price of its conventional cousin, rather than the usual three times as much.

“There’s been a rush to get all of this conventional [flax] bought. I think the organic is underpriced,” he said, expecting conventional flax to eventually decrease to about C$15 per bushel.

One organic crop that has bucked the trend to remain steady is feed wheat.

“It’s the demand. They’re looking for feed wheat,” said Jason Breault of RW Organics in Mossbank, Sask, but noting it’s not the same story for spring wheat.

“We’re buying and taking it right away, but the price ain’t the greatest,” he said.