Organic markets turning the page into 2022

By Phil Franz-Warkentin
Glacier FarmMedia staff

As the calendar turns to 2022, activity is relatively quiet in the Canadian organic sector, with tight supplies of many crops limiting the already seasonally slow movement.

The Prairie drought of 2021 cut into the production for organic crops the same as was seen on the conventional side, although the nature of the market meant that prices were slower to rally.

• Read more: Organic price quotes: Late December

“There was definitely a lag before the organic prices went up,” said Laura Telford, organic sector development specialist with Manitoba Agriculture, noting “there just wasn’t much market and prices were very low.”

If you’re an organic grower with flax to deliver, you’re sitting on a little goldmine. – Laura Telford

Organic hard red spring wheat bids had bottomed out at C$11 per bushel at one point before the drought, getting below the cost of production in some cases. That corner has been turned sharply, with wheat bids now closer to C$23 to C$25 per bushel heading into the New Year. As a result, wheat prices were “up around the highest I’ve ever seen them,” according to Telford.

She also pointed to flax as being in very short supply. “If you’re an organic grower with flax to deliver, you’re sitting on a little goldmine,” said Telford. Although she added that the tight supplies mean that not much is actually available.

Looking ahead, “we’ll be looking closely at supply dynamics to see what has been, or will be delivered, from the 2021 crop, said Telford.

The macro-indicators for the organic sector are looking good, which should be supportive in the long run. However, Telford said the ‘small market phenomena’ of the Canadian Prairies can lead to localized swings. The situation can arise, as it did prior to the 2021 drought, of end-users who overbuy in any given year and then are set for the next few years. That then leads to challenges from a marketing perspective and has caused growers to exit the business.

Telford said this year’s short crop has “strengthened the hand of the farmer,” which should keep producers from getting out of organics.

However, while high prices may be bringing some optimism to the organic sector, a common sentiment heard by Telford was that it was great that the prices were high but too bad there was nothing to sell.

With high prices across the board, farmers should be expected to keep with their rotations in 2022, with all eyes on the weather.

“Everyone will be watching the weather,” said Scott Shiels, grain procurement manager with Grain Millers Canada in Yorkton, Saskatchewan. He noted that tight supplies of crops like oats and flaxseed will encourage new crop pricing opportunities to encourage acres.

It’s not the same feeding frenzy as in the west. – Harro Wehrmann

Eastern Canada did not face the same drought issues as the Prairies in 2021, with the market for the soybeans and corn primarily grown there relatively steady heading into the New Year.

“It’s not the same feeding frenzy as in the west,” said Harro Wehrmann, of Wehrmann Grain and Seeds Ltd. in Ripley, Ont. Although he added that prices were still relatively solid in the province, with the market relatively quiet for the time being as end users deal with their existing contracts and supply chains.

“A lot of product is sold out or contracted in Ontario,” said Wehrmann, adding “farmers are just managing their money, their taxes, and their hibernation.”

Weather will also be a factor in the east in 2021, with conditions for winter wheat and barley a question mark for now.

“We’ve had more than ample moisture in the fall, so Ontario is going into the winter at a moisture surplus, but that doesn’t mean anything for soybeans and corn,” which will need timely rains during the growing season.

The ongoing pandemic, and what it means for both demand and container movement, will also be key to follow in 2022, added Wehrmann.