Weather, rising conventional prices affecting organics

By Adam Peleshaty
Glacier FarmMedia staff

Varied amounts of rainfall across the Prairies and the rising prices of conventional crops during the month of July were detrimental to organic markets in the region.

After a spring which had decent moisture and little weed pressure, Kelly Cornelius, a grain procurement specialist with Grain Millers in Yorkton, Sask. said conditions this summer in have been harsh, especially in Alberta and Saskatchewan, and he expects yields to be “average at best”.

“As we start getting into June, it really started to dry out. It seemed like the taps were turned off in areas almost completely. Then we started getting mixed results across the board,” Cornelius said.

He also heard first-hand from growers about the sporadic conditions at the Ag in Motion farm show at Discovery Farm Langham, located northwest of Saskatoon from July 18 to 20. Grain Millers was one of 580 exhibitors at the event presented by Glacier FarmMedia.

“The overwhelming response was the spottiness of the rainfall and just how variable everything was,” Cornelius added.

Rising conventional prices due to additional widespread drought in the United States and Russia’s withdrawal from the Black Sea Grain Initiative have also caused organic crop prices to rise in kind. However, Ken Richmond, a farmer from St. Andrews, Man. and procurement manager for Regina-based O&T Farms, said some prices are causing growers to make changes.

RELATED: Organic price quotes: Late July

“I think there are fewer acres of organics this year. (Organic growers) saw high (conventional) prices last year and then they switched to some extent,” Richmond explained. “This year, (premiums) have weakened quite a bit… For example, organic flax last year was trading at C$75, C$80, C$85 per bushel range. Now, it’s probably closer to C$32, C$33/bu. Conventional flax is now C$14, C$15/bu.”

High-delivered bids for flax ranged from C$21 to C$27/bu. across the Prairies at the end of July 2022, according to Prairie Ag Hotwire.

While most growing areas in Manitoba saw lower-than-normal temperatures in the second half of July, precipitation was still erratic with much of it coming from thunderstorms.

We’re still paying a little more for old crop than we are for new. – Jason Breault

“The drought is definitely going to hurt yields on everything, organics and conventional,” Richmond added.

Jason Breault, manager of RW Organic in Mossbank, Sask. said cereal crops have been the hardest hit by the drought around his area, while also facing an additional nuisance of grasshoppers. He added that demand for organic crops is still in a “wait-and-see” mode.

“We’re still paying a little more for old crop than we are for new,” he said. “If it ends up being a short crop, prices will go up. If it’s average, they’ll stay the same. If there’s more out there, it will go down. Supply and demand.

“(Demand) is stagnant, almost. It’s not down; it’s not up. There’s not a high demand, but the demand is still there. There are people who are going to need the product, but they’re not ready to commit on the price yet. There’s no giant growth, but (demand) is not falling off either.”

Breault believes prices will stay where they are for the rest of the summer, if not higher.

“Where (prices) will be, maybe a touch higher. It’s pretty safe it’s going to be where we’re at right now,” he said.

Ontario is seeing similar crop conditions to those in the Prairies, according to Organic Council of Ontario director-at-large Rob Wallbridge.

“We’ve got a lot of areas that have seen significant rainfall. Some areas are still dry. There are lots of variability across the province,” he said.

Prices have definitely been on a downward trend… – Rob Wallbridge

The wheat harvest in the southernmost areas of Ontario are already underway, according to Wallbridge, while areas further north are a week or two away. Corn and soybean crops are faring well despite copious amounts of rain hindering weed control for the latter.

Wallbridge added that Ontario’s organic markets have been quiet and buyers have not shown significant demand yet.

“There’s been a little bit of activity just based on weather forecasts coming out of the U.S. Midwest and drought conditions down there, but it hasn’t had a big impact on organics yet,” Wallbridge said. “Wheat prices are going to really depend on the yield and quality we see through the harvest season right now. Prices have definitely been on a downward trend, but right now, I think it’s all dependent on the weather between now and harvest.”