Originally published February 23, 2018 on OrganizBiz
By Ashley Robinson
February was a quiet month for the organic crop market in Western Canada, however across the country attention has shifted to plans for the 2018 crop.
In Western Canada February was a slow month for organic buyers as processors were filled up with crops from the end of last year, making them not as interested in buying.
“January, February’s always quiet because it’s kind of post-holiday and most organic processors, millers, bakers, feeders are just accessing what they (currently have). They didn’t want to be caught short during the holidays so a lot of that grind goes into January, February and then typically we kick back up in March,” said Jason Charles with Pipeline Foods.
Pricing was better earlier on so producers took advantage of that and did a lot of forward pricing. – Scott Shiels
At Grain Millers in Yorkton, Sask. they haven’t been buying a lot due to having contracted crops ahead of time, according to Scott Shiels. Grain Millers is an organic and conventional crop buyer as well as an oats processor.
“Pricing was better earlier on so producers took advantage of that and did a lot of forward pricing. Same looking into the New Year, we’re already full out in 2019 with the new crop pricing,” Shiels said.
In Ontario it has been busier for organic buyers. The spring thaw is beginning with rain falling in southern Ontario leading to flooding reports in the Brantford and Waterloo regions.
“There’s not a lot of frost in the ground so the water should move away. But if we get a cold spell following this water and it freezes it’ll probably suffocate a lot of wheat,” said Andrew St. Jean at Beechwood Agri Services in Parkhill, Ont.
St. Jean has been busy buying the 2017 crop still. Corn has been in demand from the Ontario organic pork industry. Organic corn has also seen increased demand from the United States for use as livestock feed.
“Markets have really rallied with organic corn imports (from the U.S.) really dropping off the last couple of months and reports coming out that they haven’t really stabilized to where they’ve been in previous years. So there’s definitely some urgency in the market for corn and larger customers wanting to get covered,” he said.
As of Feb. 21 Beechwood Agri Services was buying corn at C$12 per bushel compared to $9.25 per bushel in Western Canada.
The high Canadian dollar as well is affecting organic markets. According to St. Jean, the food grade soybean market has especially been affected, with U.S. buyers losing interest due to the higher prices.
“We’re really competing directly with U.S. … (with) our dollar not being as favourable as it has been. We really need a 75 to 76 cent dollar to compete with the U.S. right now. So that’s driving food grade prices down,” he said.
In Western Canada organic prices are also being affected by the high Canadian dollar. At Pipeline Foods, which is based in Minneapolis, Minn. with locations in Manitoba and Saskatchewan, Charles has found the Canadian crop not as enticing – the U.S. is Canada’s main organic crop market.
“With a strong Canadian dollar and so forth we have seen bids to the farm gate be a little lighter than they have in the last 120 days,” Charles said.
Attention is shifting across the country to plans for spring planting. In Ontario, St. Jean said he has been busy with farmers asking about contracts for the 2018 crop. On the Prairies organic farmers are also showing an interest in 2018 contracts.
At Grain Millers Shiels has an idea of what 2018 organic acres might look like. He expects to see an increase in oat acres as he has a lot contracted already. Shiels also thinks there will be a lot of flax acres due to high prices. There should be a decent amount of spring wheat acres also due to good pricing, Shiels said.
“(In) specialty crops, (they’ll) probably be an increase in peas, maybe a decrease in lentils and mustards…there’s a strong yellow pea market out there, so I think those acres will probably bounce back a little bit from last year,” he said.