Smaller Prairie organic crops underpin available bids

Photo: IanChrisGraham/iStock//Getty Images

By Phil Franz-Warkentin
Glacier FarmMedia staff

Western Canada’s organic crops were hit hard by drought in 2021, which should be supportive for prices going forward. However, that smaller crop is leading to some caution amongst end users, as they wait for a better sense of available supplies before entering the market.

A number of companies dealing with pulses and other specialty crops had no spot pricing available, as the tight supply situation had end users working through previously purchased stocks and contracted grain. One buyer expected bids to start becoming available later in the fall, “once the dust settles” on the true size of this year’s harvest becomes better known.

Some areas had decent crops, but most didn’t. – Jason Breault

The harvest is nearing completion in Western Canada, with only small amounts left to go.

“Some areas had decent crops, but most didn’t,” said Jason Breault of RW Organics in Mossbank, Sask. He said prices have come up over the last while, but said many mills and other end users were still waiting to bid.

Dwayne Lee, of Growers International Organic Sales Inc. in Winnipeg, said wheat yields were down, but quality was decent overall due to the lack of frost.

“The market feels firmer with the smaller crop, but everyone is waiting for the farmer to finish up harvest and see where things are at,” said Lee.

“We’ve had more moisture in the fall than we had all summer, which is slowing some guys,” said Scott Shiels, of Grain Millers in Yorkton, Sask. While yields were down considerably with lower test weights, he described quality as “decent.”

While spot bids for many crops remain few and far between, prices for what is moving are already rising and should only get higher, according to market participants.

Farmers hold a lot of cards right now. The crop that’s there is all there is. – Scott Shiels

“We’re definitely seeing some higher prices out there,” said Shiels, adding “it’s really started to run, and it’s only September.”

“Farmers hold a lot of cards right now. The crop that’s there is all there is,” said Shiels.

However, he cautioned that the tight North American supplies were already leading to talk of increased imports into North America – which would likely set a ceiling for prices.

While this year’s production may be down, there is a lot of better quality grain but lower protein wheat from past years still being stored in bins, said Breault. He expected some of that lower protein wheat, which had maybe been worth only C$8 per bushel, might now get up to C$13 if it gets blended with the higher protein 2021 wheat. “But they won’t get C$20,” he added.

Lee agreed that high protein levels with the 2021 Prairie wheat crop will lead to blending opportunities for lower protein wheat carried over from 2020.

In Ontario, “the harvest is just getting started, so we haven’t seen much movement yet,” said Andrew St. Jean, of Beechwood AgriServices. He said early reports were pointing to average-to-above average yields for soybeans, while the corn harvest had yet to begin.

Whatever someone is willing to pay, there’s someone else willing to pay more. – Andrew St. Jean

Rains in late September put harvest operations on hold, but should be making more progress in October.

“Whatever someone is willing to pay, there’s someone else willing to pay more,” said St. Jean noting that the demand was strong. “if you’re crushing meal, it doesn’t make money to have things not running… so in order to keep things running you sometimes have to bid a little higher.”

Matt Morden, of Field Farms Marketing in Ontario, agreed with the average-to-above-average crop prospects in the province. He expected bins to fill up quickly at harvest time, with the price direction dependent on how the crops turn out.