Organic markets in between old and new crop

By Phil Franz-Warkentin
Glacier FarmMedia staff

It’s an in-between time of year for Canada’s organic grains and other crops, as market attention slowly shifts to the new crop potential and bins are cleaned out of thinning old crop supplies. Uncertainty over the global geopolitical situation and logistics issues closer to home was an overarching feature in late March.

• Read more: Organic price quotes: Late March

“There’s still a need for old crop, but not as much as there was,” said Jason Breault, of RW Organics in Mossbank, Sask., adding “we’re still in the market for old crop, but if we have to we’ll wait for new crop to finish it off.”

“We’re just starting to see new crop contracting come into play,” said Sandy Zielinski, CEO, founder and principal broker with Grasslands Brokerage in Saskatchewan.

The producers holding onto grain right now are just waiting for the right window to sell into. – Richard Reimer

She said there was still a focus on old crop “as buyers attempt to fill their contracts with what is left,” noting that as a brokerage, Grasslands was doing a lot of “Where’s Waldo?” tracking down grain to meet demand as it comes forward. She estimated that there was likely a bit more supply in the countryside than initially thought, “but it’s a matter of doing the hard work to find what’s out there.”

“The producers holding onto grain right now are just waiting for the right window to sell into,” added Richard Reimer, commodity specialist at Grassland. He noted that some spot opportunities were still available on occasion.

On a crop-by-crop basis, hard red spring wheat, flax and oats were seeing the most movement, while opportunities were more hit-or-miss for pulses and other specialty crops.

After the Prairie drought in 2021 cut into total production, Grasslands was seeing interest from buyers they normally wouldn’t hear from as other suppliers run short. Zielinski said it would be interesting to see whether or not that new interest persists once the 2022 crop becomes available.

The organic market in general took a real beating because of everything going on the past few years. – Sandy Zielinski

The cost of freight has almost doubled in some cases, said Reimer, noting that those high prices have limited some buying interest.

“The organic market in general took a real beating because of everything going on the past few years… so buyers and food manufacturers have been struggling to navigate those challenges,” said Zielinski, adding that many buyers were just dipping their toes back in now.

Looking ahead to the 2022 crop, “most people will stick to their rotations,” said Reimer. Although he added that high flax prices might encourage some minor shifting of area.

“As farmers are going forward and planning their new crop acres, it wouldn’t be a bad idea for them to gauge each commodity they’re considering based on whether or not the movement of that commodity has the ability to meet their own financial needs in a timely manner,” said Zielinski. If they do not want to do new crop contracting, she recommended sticking with crops that have shown steady demand over the years such as yellow peas, wheat, flax and oats.

On the other hand, producers who want to grow a crop with a smaller pool of buyers would be better off growing them under contract if they need to guarantee cash flow at a certain time. If they’re not interested in a contract and still want to grow those crops, she recommended growers make sure they have the ability to sit on those crops.

In Ontario, the old crop market is relatively quiet with most of the supplies already sold out aside from some corn still moving, according to Harro Wehrmann of Wehrmann Grain & Seeds Ltd. in Ripley, Ont.

A cold spring and wet fields may delay seeding operations in the province. “You can’t go into the fields,” said Wehrmann, adding “it will be a long waiting game.”

He noted that it was also too wet in the fall to seed winter wheat, which will likely see more ground go into corn and soybeans this spring with soybeans the more attractively priced of the two.

Farther afield, the conflict in Ukraine that has roiled conventional markets over the past month could also have an influence on the Canadian organic market going forward. Ukraine is a player in the world organic market for wheat, corn, sunflowers and spelt.

Wehrmann said Ukrainian imports are occasionally seen on the Eastern Seaboard, but the country is “a huge player in the organic market into Europe.”

If Ukraine is unable to supply to its usual European customers, it could open up opportunities for Canada to see into markets it hasn’t sold to in the past.