Organic industry nearing recovery from 2008 recession

Hand going through wheat field Photo: Thinkstock

By Ashley Robinson
Glacier FarmMedia staff

A decade ago when the recession hit, the Canadian organic sector felt the brunt of the blow. Producers weren’t able to make it through and many retired or switched to conventional farming. Now, a decade later the organic industry has neared a full recovery.

“I think what we have done is built much more resilient organic farms (now). It was a real learning opportunity for the organic sector to see what would happen in a disaster and I would say the recession was a disaster for organic,” said Laura Telford, organic sector development specialist with Manitoba Agriculture.

In 2018, Telford and many organic buyers across the Western Canada, noticed the number of organic farms is again nearing the level it was at before 2008. According to Telford, a number of things from advancements in production to more information on the organic sector have helped to grow the industry.

Since (the recession) we have really focused on kind of bringing in that business person farmer who is a good farm manager. – Laura Telford

Across the Prairies organic farmers have done research on their own farms about weed control practices, which have helped to advance the industry. Organic farming equipment from Europe has also made its way into North America and machinery manufacturers here have started to make similar organic machines.

The Prairie Organic Grain Initiative was also formed to provide information about organics. Their website, Pivot and Grow, has helped to spread organic information to farmers. Telford also points to the Glacier FarmMedia website OrganicBiz, which has helped provide price transparency for the industry.

“Since (the recession) we have really focused on kind of bringing in that business person farmer who is a good farm manager, and so I think that’s part of why we’re seeing larger farms. But we’re also seeing better management than we saw pre-recession,” Telford said.

Telford feels the organic market has stabilized. Prices a few years ago were at a 300 per cent premium over conventional prices, but have now settled around 200 per cent, which Telford said is an appealing spot for them.

“You want around the 200 per cent premium, but you don’t want three and four hundred per cent premiums because that makes the industry very precarious because the food processors simply can’t afford that kind of a differential,” she said.

While the number of organic producers are nearing pre-recession levels, the actual acreage has eclipsed previous numbers. The acreage growth does have organic producers concerned about prices. According to Scott Shiels at Grain Millers Canada in Yorkton, Sask., the larger farms have diversified operations though so they aren’t completely taking over any specific market.

“With demand doing what it’s doing, we’re seeing growth in every commodity on the food end. So we need that supply to keep growing,” Shiels said.

The growth in the organic industry is also changing the way buyers purchase grains. Before buyers would take whatever they could get, but now they can buy based on the quality of the crop.

“Now we’re obviously being a little bit more selectively…we pay obviously a premium for the good stuff. And obviously if the stuff isn’t as good then there’s obviously a reduction,” said Barry Richardson at NutraSun Foods Ltd. in Regina.

In 2019, organic buyers are expecting organic prices to strengthen and be slightly stronger than in the past few years.

“I’m sure we can see a little bit of a rebound, how much? I don’t know, (it’s) too early to tell from the marketplace. But I don’t know if we’ve reached bottom (prices) yet. My guess is we are and I’m sure prices will start to rise in the first quarter of 2019,” Richardson said.