Organic market steady as ample supplies met with good demand

Markets are quieter-than-normal as farmers continue to be busy with harvest operations. Photo: Thinkstock

By Phil Franz-Warkentin
Glacier FarmMedia staff

Western Canadian organic markets were holding relatively steady in late September as harvest operations entered the final stages across the Prairies.

Variable crop conditions resulted in average crops overall, according to a number of organic buyers, with ample supplies and good demand countering each other to keep prices relatively steady.

Farmers are still busy in the field, resulting in a quieter-than-normal market environment, said Scott Shiels, of Grain Millers. “We expect that to pick up as we get into October and more of the crop is off,” he added.

“The biggest factor is ‘how was the harvest?'” according to Jason Freeman, general manager of Farmer Direct Organic Foods. “For most farmers, you take it all and put it together, it’s an average year.”

Shiels seconded the generally average production estimates. “The quality of the crop that’s come in so far has been good,” said Shiels, although he added that yields didn’t quite live up to earlier expectations.

With the average harvest, Freeman didn’t expect to see any supply shocks which would help keep prices relatively steady.

The U.S./Canadian exchange rate is also holding reasonably rangebound, and “as long as the Canadian dollar doesn’t appreciate significantly, we expect specialty crop prices will remain relatively strong,” said Freeman.

There’s a lot of grain out there. – Jason Charles

However, he noted that the grains may not have as much support. “When farmers transition to organic, the first crops they grow are oats, wheat, and barley,” said Freeman, noting that grain supplies are generally larger than the specialty crops.

“There’s a lot of grain out there,” said Jason Charles, director of organic marketing with Pipeline Foods. Some of that was due to an ample carryover for many crops, but good weather through the 2020 growing season and generally favourable yields were also factors.

While the big supplies are a bearish influence, “demand has been really good,” said Charles adding, “we’re buying a lot and looking to buy a bunch more.”

Charles added that generally lower prices compared to the past ten years were encouraging some of that demand.

The good demand was tied in part to the COVID-19 pandemic and an increased interest in healthy eating, according to Freeman. “People are staying home and making hummus,” he said, noting that social distancing measures have allowed more time for preparing food at home. While organic ingredients may be more expensive than their conventional counterparts, they are still cheap compared to prepared foods or restaurants.