Several factors pressure organic grain prices in 2023

By Glen Hallick
Glacier FarmMedia staff

As 2023 drew to a close, the organic grain industry coalesced around the idea that prices may have reached or were close to their lows for the year. Pressure on organic grain prices came from a number of factors, according to industry participants in Ontario and on the Canadian Prairies.

During 2023, conventional grain prices dropped on the commodity and cash markets which pressured prices for organics. Inflation led to reduced demand for organics, which forced brokers to cut them as to keep product moving. Also, interest rate hikes by the Bank of Canada led to increased costs in the organic grain industry.

Doug Harris of Broadgrain Commodities in Stratford, Ont. warned the downturn in organics may not be quite over just yet.

“The next quarter is going to be a bit of a challenge,” he stated, noting there could be more price swings to come, especially in organic corn.

• READ MORE: Organic price quotes: Late December

Harris said increased interest rates hit those companies storing grain quite hard earlier this year, which ballooned their inventory costs.

“When we have good years, don’t spend all of it,” he cautioned. “Put it away in a war chest, because we are going to wind up with cheaper prices sometime in the near future.”

To Harro Wehrmann of Wehrmann Grain and Seed Ltd. in Ripley, Ont., inflation drove away consumers from purchasing organic products.

“The buying patterns of the consumers has shifted a bit away from high expensive food items to [less] expensive food items. It’s most pronounced in the meat sector and subsequently in the feed sector,” he explained.

“It’s the big volume items like feed wheat, feed barley, feed corn, and feed soybeans. The kind of stuff that constitutes a large portion of the organic industry, that’s suffering right now,” Wehrmann added, noting contracts for organic grains in Ontario remained few and far between.

With the grain and flour not moving fast, it’s bringing the price down. – Jason Breault

In comparing organic corn prices in Ontario from December 2022 to December 2023, they slipped back from C$13 to C$14 per bushel to C$11 to C$11.50.

Over on the Canadian Prairies, Jason Breault of RW Organics in Mossbank, Sask. noted organic wheat was moving slowly.

“With the grain and flour not moving fast, it’s bringing the price down. We’re not down a whole bunch, but it’s definitely coming,” he stated.

“Some of the mills said they have sold flour, but it’s not leaving as fast. Maybe they had 12 months of grain, but it’s taking them 13 months to use it,” Breault explained.

Meanwhile, Scott Shields of Grain Millers Canada in Yorkton, Sask. said demand for oats has been steady but quiet throughout the fall and into winter.

“It would be nice to see demand pick up some, which would likely happen if the economy recovers some,” he commented.

No matter what is planted…we will need to see moisture conditions improve if we are going to have any kind of crop in many areas. – Scott Shiels

Shiels added that he expects planted acres for organic oats and other organic cereals to increase in 2024 as supplies were getting tighter. However, he added a caveat.

“No matter what is planted…we will need to see moisture conditions improve if we are going to have any kind of crop in many areas,” Sheils stated.

Dry conditions on the Prairies, especially the western half of the region, posed a serious challenge to all organic and conventional crops in 2023. More moderate weather in the latter part of summer helped to replenish some of the yields that otherwise would have been lost due to excessive heat in the spring.

“A little bit better of a crop overall,” said Dwayne Lee of Growers International Organic Sales in Winnipeg, Man. “We didn’t get the rains we all hoped for, but the crops fared well.”

In comparing December to December, spring wheat prices were C$22 to C$25/bu. a year ago to now C$18.50 to C$20. Oats have bucked the downward trend somewhat, being C$8 to C$9.25/bu. in December 2002 to now C$9.50 to C$10.