Organic markets steady, more wheat, oats acres predicted in 2018

One grain analyst sees a large carryover on malt barley and oats which could potentially open the door for more organic wheat acres in 2018. Photo: File

By Phil Franz-Warkentin
OrganicBiz staff

CNS | Winnipeg – Canadian organic markets are holding steady in late-January, as contracted old crop business moves through the system and new crop offers are still not widely available.

“The majority of the contracts are being filled right now, so there aren’t a lot of people out buying,” said Tristan Gill, of Westaqua Commodity Group in Vancouver, adding that “January is typically slow anyways.”

While market activity is relatively stable, “there are always spot opportunities on the feed side of things at this time of year,” said Richard Reimer, of Growers International Organic Sales Inc. (GIOSI), a division of Paterson Grain. However, “the big issue is whether or not producers will let their product go for feed, now that they’re not moving it for milling.”

Reimer said organic feed grain prices were also being undercut by corn imports from the United States. “A key to a producer emptying his bins this year is to figure out where the U.S. market is, and be willing to accept a lower dollar to move his product,” said Reimer.

Good quality malt barley is also being sold into feed channels just to move it, according to Gill. He said other barley growers are holding out for better prices down the road, but may not see them this year given the large ending stocks expectations.

Looking at the new crop, there will be a lot of carryover on malt barley and oats – two crops that organic producers like to plant, but there may not be as much demand as there could be.

I think this year there will probably be more wheat acres, and it will be at the sacrifice of barley. – Tristan Gill

“If a guy wants to put in malt barley, grow Copeland and take a contract,” was Gill’s recommendation to producers, “because if you grow it and expect to sell on the spot market, it’s not going to happen.”  He added that just putting in a high-yielding feed variety could also put a producer ahead of the game.

“I think this year there will probably be more wheat acres, and it will be at the sacrifice of barley,” said Reimer. He added that it was still a bit early to get an exact picture on acreage ideas, as both buyers and farmers are in the midst of feeling out the market. He was starting to put out some wheat bids, with more new crop pricing expected to be coming out over the next month.

“We tend to go to Saskatoon for Crop Production Week (Jan. 5 to 11) to get some direction, but that really didn’t happen this year,” said Scott Shiels, of Grain Millers in Yorkton.

However, Grain Millers is a major oats processor, and Shiels expected to see more of that crop go in the ground this year given the earlier-than-normal interest he’s been getting from producers already. “You can make good money on organic oats, and it’s a staple on almost every organic farm,” said Shiels pointing to the increased liquidity of organic oats compared to other more specialty grains.

“Every year is a lottery for producers in terms of the weather,” added a Saskatchewan-based organic trader. He didn’t expect to see too many large shifts in acreage, although noted that dryness in many areas of the Prairies would likely see more interest in drought-tolerant crops.

Looking at pulses, peas will continue to see huge demand, according to Gill pointing to the rising demand for vegetarian proteins. Green peas have historically traded at a bit of a premium to yellows, but the protein demand now is all for yellow peas making for easier movement for growers with yellow peas.

While there was some pushback when India imposed tariffs on peas and other pulse crops in November, the impact on the organic sector was minimal compared to the losses on the conventional side. “We don’t sell any organic peas to India,” said Reimer.

“The tariffs in India are not affecting the organic market like they are the conventional market,” said Shiels. The organic market is much more domestic and “we haven’t seen a change in price and demand is strong.”