Dog days of winter for organic prices

By Adam Peleshaty
MarketsFarm staff

As the calendar turns to 2023, price movement for organic crops in Western Canada has been quiet with this year’s harvest still many months away.

For some, this doesn’t mean though that the market for organic crops has waned.

[RELATED] Organic price quotes: Late January

“We haven’t noticed a decline in demand, which is good. You always try to be concerned about that when the crop is big,” Scott Shiels, grain procurement manager at Grain Millers Inc. in Yorkton, Sask., said. “Things have been moving pretty well and we’ve seen a little bit more stability in price on the organic side than on the conventional side.”

However, Winnipeg-based commodity specialist Richard Reimer of Grasslands Brokerage and Consulting in Regina said that while demand for most crops have softened as of late, organic feed is being purchased.

“There’s definitely a market for feed grains right now. Those have stayed strong in terms of price and demand, but there are just not a lot of feed grains available. We’re seeing some of the feed markets buying milling quality wheat to fill those needs and some of the malt barley going into the feed barley market.

“In terms of food grade commodities, there’s a little bit of demand for oats further out. There’s demand for wheat further out and a bit of a market for peas. But flax overall is fairly quiet. Lentils are quiet. Specialty crops are touch and go,” Reimer added.

(Organic) prices are not going to drop a lot, but I suspect they will drop somewhat. – Ken Richmond

Ken Richmond, who resides in St. Andrews, Man. and works as a procurement manager for O&T Farms located in Regina, said he has seen organic price premiums at around 160 per cent with the premium for organic brown flax at more than 200 per cent. But he believes that high conventional prices and imports from other countries could reduce demand for organic crops grown at home.

“With food prices, everyone has a budget. They may have to cut back on something and maybe organics being high-priced is one of the one’s that might weaken,” he said. “(Organic) prices are not going to drop a lot, but I suspect they will drop somewhat.”

Jason Breault, manager for RW Organic in Mossbank, Sask., said that buyers are already focused on new crop.

“The mills are starting to talk about new crop instead of old crop. Prices are down a little bit on new crop, but I think people are optimistic with snow in some areas,” he said.

Rob Wallbridge from SureSource Commodities in Petrolia, Ont., who is also a former president of the Organic Council of Ontario, said that buying activity has been quiet in his province. The biggest challenge, according to him, is a lack of end users committing to next year’s crop pricing.

“It’s making it challenging for farmers who want to make decisions based on crop values. But there’s still so much uncertainty in the market,” Wallbridge said. “I think most farmers will stick to their rotation. We saw quite a bit of wheat go into the ground last fall and after how high soybean prices have been, it will be interesting to see how that works out.”

There’s a gap between farmers’ and buyers’ expectations. – Rob Wallbridge

Wallbridge also observed that corn prices have stayed strong, but soybean prices have dropped.

“The end users feel like prices are coming down. So they’re not willing to buy large volumes at high prices, but farmers are still expecting to see high prices. So there’s a gap between farmers’ and buyers’ expectations.”

The United States Department of Agriculture (USDA) announced new guidelines for products labeled as organic on Jan. 27. Some of the USDA’s standards for what is considered to be organic requires that products are to be produced without the use of toxic pesticides, synthetic nitrogen fertilizers, antibiotics, synthetic hormones and genetic engineering.

The new updates require certification of more businesses, such as brokers and traders, at critical links in organic supply chains. Organic certificates would now be mandatory for all organic imports and more inspections and reporting requirements must be conducted by certified operators.

Tom Chapman, chief executive officer of the Organic Trade Association, told The Washington Post the updates represent “the single largest revision to the organic standards since they were published in 1990,” adding that it “boosts confidence in the organic label.”

On Jan. 6, the U.S. Justice Department indicted entities from the United Arab Emirates and Turkish individuals for masterminding a multi-million dollar scheme to export conventional soybeans from Eastern Europe to the U.S. for them to be sold as organic. On Jan. 25, two Minnesota farmers were charged with wire fraud and conspiracy for selling more than US$46 million in chemically-treated crops as organic.