Old-crop feed, oat demand stalled, new-crop pricing lower

Cereal grains Photo: Thinkstock

By Jade Markus
OrganicBiz staff

Old-crop organic grain prices are moving lower with decreased demand, one market analyst says, and that pressure is spilling over to new-crop contracts.

“It’s that seeding time of year again, so everything has softened a little bit,” said Scott Shiels, grain procurement merchant at Grain Millers, Inc. in Yorkton, Saskatchewan.

It’s been a little quiet from buyers in general. They seem to have bought up everything they need. – Laura Telford

In addition to that seasonal pressure, demand for feed grains, like wheat, barley and corn, and food-grade oats has slowed as buyers have filled their needs for the year.

“It’s been a little quiet from buyers in general. They seem to have bought up everything they need,” said Laura Telford, organic sector development specialist at Manitoba Agriculture, Food and Rural Development.

Buyers are waiting to see how crops shape up before becoming active in the market again, Shiels said, adding that new-crop pricing, most noticeably on feed grains, is weaker this year.

“I think everyone has these initiatives to crank up production,” Telford said.

Increased production adds even more pressure when it comes from competing growing regions that offer competitive pricing.

Imported corn is driving the feed market lower, as buyers import cheaper supplies from overseas, said Tristan Gill, commodity trader at Westaqua Commodity Group Ltd. in Vancouver, British Columbia.

“Even though people prefer North American product, when it’s that much cheaper, the buyers are just going to go that route,” Gill said.

Becky Lipton, executive director at Organic Alberta said imported commodities are a direct result of Canadian not being able to meet organic domestic market needs.

Lipton works with the Prairie Organic Grain Initiative, which is focused on increasing supply by bringing in new producers and increasing the quality and quantity of current organic producers.

“And pushing that imported product out,” Lipton said.

“It will allow buyers to purchase high-quality Canadian organic product.”

Telford added that conventional prices are also relatively weak, keeping certified-organic producers in the market, which means Canada is likely to have a large organic seeded area this year.

“A big variable that we don’t know is obviously how good of a crop we’re going to get,” she said.

Shiels added that dry weather could prop up organic prices further into the season, if it puts crops at risk.

“If it’s dry for the next month or so, you’ll probably see the price start to perk back up,” he said.