Canadian organic supplies replenished, but markets quiet

By Phil Franz-Warkentin
Glacier FarmMedia staff

After Western Canadian crops were decimated by drought in 2021 a return to relatively average yields across much of the Prairies despite highly varied conditions has helped replenish stocks of organic grains. However, increased supply typically leads to lower prices, with bids for many crops few and far between as end users have already covered themselves for the time being.

“We definitely have a lot more grain to deal with this year than last year,” said Jason Breault of RW Organics in Saskatchewan, noting that bins were filling up and deliveries were starting to be pushed back.

[ORGANIC PRICE QUOTES] Late September

Some farmers may be running out of room and were looking to move grain, but the buyers only have so much room as well, said Breault, adding “we’ll buy it, but it might be delayed delivery.”

He noted that end users were generally of the opinion that prices will go down, so are only buying what they need in the spot market for the time being.

While yields saw a general improvement, “we saw a real swing in how the organic acres were utilized this year,” said Sandy Zielinski, founder of Grasslands Brokerage. She said oat and pea area was up by 15 to 20 per cent, while flax and peas were down by 25 to 35 per cent. For lentils, a lack of green lentil seed meant that red lentils were up significantly on the year while green lentil area was down.

The markets may see some swings as a result, with some crops still showing solid demand while for others the demand has dropped off.

We saw a real swing in how the organic acres were utilized this year. – Sandy Zielinski

As an example, there was a strong demand for oats from spring through summer, but with an increase in acres and good yields “the oat buyers are starting to either soften bids or close up their bids for now and buying spot as they need it,” said Richard Reimer, also of Grasslands Brokerage.

On the pulses, Reimer noted that the price spread between organic and non-organic peas had become so big that some buyers were no longer interested in the more expensive organic peas. He said the economic issues in Europe were also limiting the demand for higher priced Canadian lentils at this time.

He said the wheat market was consistent but with buyers sticking with local supplies for the most part. The durum market meanwhile was almost non-existent, as higher prices over the past few years saw many end users switch their recipes to use more spring wheat and other cereals.

With end users already covered with previously contracted supplies for many commodities, farmers with unpriced grain to sell will need to be on the lookout for spot opportunities as they present themselves. Reimer and Zielinski recommended they get their samples in and grain graded so that they know what they have to market when those selling opportunities arise.

Yields and quality were “all over the map. – Wade Metcalfe

In Eastern Canada the bulk of the soybean and corn harvest in Ontario is still to come, with wide ranging yields and quality across the province, according to anecdotal reports.

“Once we have a better perspective on how crop yields will be this year, then we’ll have a better idea where the prices will settle,” said Wade Metcalfe of Field Farms Marketing, noting that yields and quality were “all over the map” depending on the seeding time and rains during the growing season.

Prices for soybeans have shown some firmness though, most likely due to strength in the United States dollar and relative weakness in the Canadian dollar. The exchange rates are making Canadian crops very attractively priced for U.S. buyers, said Metcalfe.

He pointed out that soybean bids saw a peak in May/June then dipped over the summer months. That market has come back now due to the strength in the U.S. dollar.

However, organic livestock farmers have also taken a big hit over the past year and switched back to conventional, reducing the demand for organic feed commodities, said Metcalfe.

In addition, Ontario grain farmers have put up more bins over the past few years and are holding onto corn longer rather than selling at harvest. Metcalfe said farmers and feed mills were in a bit of a standoff due to the increased farmer storage and ability for growers to hold out for higher prices.