Organic feed, milling grain markets trending lower

By Jade Markus
OrganicBiz staff

While most organic commodity prices are holding steady, grains lost ground during April, a trend which analysts in Western Canada expect to continue.

“We’re not really seeing a huge drop in anything except for the feed market,” said Scott Shiels, grain procurement merchant with Grain Millers, Inc. in Yorkton, Sask.

Those losses are due, in part, to seasonal pressure, but sluggish demand from the U.S. and competing growing regions are further weighing on prices.

As the Canadian dollar gained ground against its U.S. counterpart, grain has become less appetizing to buyers south of the border, said Bryce Lobreau, of Pipestone, Manitoba-based Pristine Prairie Organics.

All feed grains follow corn, said Tristan Gill, trader at Vancouver, British Columbia-based Westaqua Commodity Group Ltd.

“Corn’s kind of come down a lot,” he said.

He added that the East and West Coasts of the United States are importing high amounts of corn, which is keeping the supply picture bearish.

“It’s kind of pushing all feed ingredients down,” Gill said.

India, Eastern Europe, and Turkey are all producing USDA (United States Department of Agriculture) certified-organic corn, Gill said, which competes with Canadian product, and is often more competitively priced.

“And there’s an overall kind of feeling that we’re going to have more grain overall. We’ve had good crop the last few years,” Lobreau said.

If this year yields another healthy crop, it will put further pressure on feed grains, he said.

He added that while prices have moved lower, the market is still profitable.

“Even though they’re kind of on a downward trend, they’re still really strong.”

Milling grains

Milling barley and wheat prices have dropped slightly since last month due to high supplies.

“If anything, I see prices going down. There’s a lot of old crop out there, and not a lot of demand,” said Eric Fast, grain procurement and logistics, at Forest Lake, Minnesota-based Nature’s Organic Grist.

Gill agrees that the milling grain market has seen a drop-off in demand, as buyers have already secured what they need for the year.

“A lot of guys in the flour mills have bought up,” Gill said.

He added that of the three millers he’s talked with, two aren’t buying milling grains, and one is offering comparatively weak pricing.