May Market Commentaries

Grain Millers

Click here to visit their website

What trends are you currently seeing in the organic grain market?

One of the trends we are seeing in the organic market these days would be the shift back in acres from more specialty crops like peas, lentils, and mustards, to more traditional crops such as oats, wheat, and barley. Producers have realized that the consistency just isn’t there with production of the specialty crops, so they have reduced acreage of those and gone back to easier crops to grow and market.

Are there any specific crops you’re seeing more production of? How is that affecting markets?

We have seen a significant increase in wheat and barley production, and that has driven prices lower through this spring, and looking ahead into next year. We have also realized an increase in oat production, but demand has been doing a nice job of keeping up with the increase in supply, leaving prices stable going into next year.

What changes or events in the global marketplace are affecting Canadian prairie markets? Which crops are affected and why?

We have been experiencing a large amount of organic feed products being imported into the US, and that seems to have put some serious pressure on our domestic feed markets, both down south, and here in Canada. This has mostly hurt barley pricing, but other feed grains such as wheat and oats have had a hard time staying at decent levels back to the producer.

Organic Trade Solutions

Click here to visit their website

What trends are you currently seeing in the organic grain market?

Organics grain follows a lot of trends in the natural products industry. For example, Dairy alternatives like oat, hemp, pea, coconut and almond drinks are hot as consumers move away from unhealthy sugary drinks like pop. It also reflects the decreasing market share for fluid milk. Grab and Go convenience foods that are healthy are also selling very well as families are becoming smaller and the percentage of single people as part of the population is at all time highs. Plant based proteins like pea and hemp are also popular, especially pea protein given it’s lower price point than hemp.

Are there any specific crops you’re seeing more production of? How is that affecting markets?

There appears to be a lot of acreage that is transitioning to organic. This may put significant short-term pressure on the supply side as Canadian and US farmers must also contend with organic imports and an apparent high level of fraud from the imported grain. The positive side is that the market is growing, yet there is still significant over production of oats and perhaps even hard spring wheat.

What changes or events in the global marketplace are affecting Canadian prairie markets? Which crops are affected and why?

The feed barley market into the US has all but collapsed for Canadian farmers as corn imported from the former Soviet Bloc is flooding US feed markets. Eastern Europe is now producing organic hemp which could affect hemp markets.

W.A. Grain and Pulse Solutions

Click here to visit their website

What trends are you currently seeing in the organic grain market?

With the rising trend of organics, we’ve been seeing producers utilize better technology and farming practices for soil management.  There have also been producers in the prairies begin to experiment with regenerative farming practices.

Are there any specific crops you’re seeing more production of? How is that affecting markets?

There has been strong interest in organic peas from the Western Canada region.  We’ve seen acres grow substantially in comparison to the last few years.  Producers who would have never considered a pulse crop are now adding it into their rotation.  The strong demand for Canadian yellow and green peas in Asia have led to a rise in production, along with increased prices.

What changes or events in the global marketplace are affecting Canadian prairie markets? Which crops are affected and why?

Last year there were strong demand for organic French green lentils.  This caused a huge shortfall due to the lack of supply and poor crop year in other producing countries.

Kamut

Click here to visit their website

What trends are you currently seeing in the organic grain market?

We see a lot of large questions about the organic grain market. We are a small producer who has historically had a confident market presence in Europe. We are seeing an interruption caused by some non-tariff trade barriers. We are focusing our efforts on the North American specialty/artisan users market to cope.

Are there any specific crops you’re seeing more production of? How is that affecting markets?

We are cutting back on acres. We are in the position of having too much grain at the moment, and cutting prices.

What changes or events in the global marketplace are affecting Canadian prairie markets? Which crops are affected and why?

There seems to be large questions driven by the chaotic nature of the US export market. I have talked to customers who market pulses and grains who have been affected by non-tariff trade barriers along with the erratic and unpredictable forces of the current export market.

Hemp Production Services

Click here to visit their website

The organic hemp grain market in 2018 underwent a price correction as other countries entered the marketplace in response to high market prices. Beginning in 2017, lower priced organic hemp grain coming in from China and Europe disrupted the US market, forcing prices down. The new reality is that organic hemp grain is now a competitive global commodity.

In response to this market shift, 2018 Canadian contract prices were reduced so that high quality Canadian organic hemp grain could be competitive in the global market. This decline was important as more regions of the world are increasing organic hemp grain production. With improved genetics and robust agronomy support, returns to Canadian organic growers can still be strong even at lower pricing.

Global demand for organic hemp grain has increased significantly, and this trend is expected to continue in the future. This is good news for Canadian growers who collectively have many years of experience to draw from and access to an established processing infrastructure.

Another possible income stream from hemp production in 2018 is the extraction of CBD from the chaff. Hemp Production Services is investing in technologies and partnerships to streamline this parallel market into the current production system.

Hemp Production Services is interested in increasing the number of Canadian organic hemp producers to meet market demand. If carefully planned, this crop can be a valuable addition in an organic crop rotation. Field days will be organized this summer to learn more about the organic hemp market and management strategies on organic farms.

Mercaris

Click here to visit their website

What trends are you currently seeing in the organic grain market?

For US markets, right now there are two factors worth keeping an eye on. The first is foreign trade. As has been highly publicized, the US organic sector is seeing the flow of organic imports slow over the 2017/18 marketing year. This has been coupled with price support for organic feed grade corn spot trades, and subsequently feed-grade organic wheat, with prices in both markets averaging more than $1/bu above year ago prices during the first quarter of 2018. Over April 2018, the delivered organic feed-grade corn price averaged $10.48/bu, up $1.34/bu from April 2017. Additionally, the premium over last year appears to be stable for the time being, with quotes of fourth quarter organic grain delivery mostly even with current spot price quotes.

The second is the impact of weather on spring planting. US organic spring wheat planting is particularly far behind this year. Planting progress across the top-ten US organic spring wheat producing states averaged 54% complete the week of May 14 2018, 23% behind the pace of planting in 2017. Organic corn and soybean planting was also behind schedule the week of May 14, primarily held back by delayed planting in the two largest organic corn and soybean states, Iowa and Minnesota.

Are there any specific crops you’re seeing more production of? How is that affecting markets?

In the US we fully expect to see more organic corn and soybean acres harvest this fall as domestic organic livestock producers have cut their reliance on imports in exchange for more focus on domestic supplies. Wheat holds the potential to throw a curveball, as Mercaris estimates organic wheat yields fell 17% y/y in 2017 due to drought conditions in the northern plains. Recent history has witnessed organic wheat acres expand right along with corn and soybean acres. If US organic wheat acres expand by the same magnitude that they have over the past two years, and wheat yields recover to historically average levels, then the market may find a lot more wheat available for spot transactions following harvest.