Organic markets in Western Canada are generally seen holding steady. Photo: CSP
Originally published on November 30, 2018 on OrganicBiz.
With the harvest largely in the rear-view mirror and spring seeding still a distant spec on the horizon, the organic markets in Western Canada are generally holding steady heading into the winter months. Prices for most of the major crops only saw minor movement over the course of November.
“We’re in the holiday season now, so things will be pretty slow over the next 30 days,” said Jason Charles, director of organic marketing with Pipeline Foods.
“It’s pretty flat,” added Scott Shiels, grain procurement manager with Grain Millers in Yorkton, Sask. on the current market dynamics. He said prices were at a decent level to bring in farmer sales, “which keeps it nice and steady.”
The big movers heading into 2019 will be hard red spring wheat, yellow peas, durum, feed wheat and to a lesser extent – oats. – Jason Charles
“It will be interesting to see when we get into the New Year,” said Shiels. He didn’t expect to see much movement on prices until February or March, when there may be fights for acres.
“There’s a lot of grain out there,” said Barry Richardson, of NutraSun Foods in Regina, Sask. “There’s a lot of good quality and a lot of bad quality, but not much of the in-between.”
With that wide range of quality, Richardson said the premiums for good quality grain had more room to the upside.
“There will be more feed wheat this year than last year,” said Jeff Page, a merchandiser with Rein Agri Foods in Saskatchewan. While that may weigh on feed prices, he noted that the demand for organic feed was rising. In addition, he expected those who could afford to sit on their better quality grain would likely see better prices eventually.
Looking to the New Year, Charles expected the steady trend would continue, although with more upside potential than downside.
“We won’t see $20 wheat, but we also won’t take prices lower,” said Charles. He added that many organic crops likely had about 50 cents to a dollar per bushel upside.
“The volume was there this year, but I think we’ll struggle with quality as we get into (the first and second quarter of) 2019,” said Charles. He expected production contracts would be in line with historical levels, with no real crops standing out.
“The big movers heading into 2019 will be hard red spring wheat, yellow peas, durum, feed wheat and to a lesser extent – oats,” said Charles. He described those crops as the farmer’s “chequing account” in that a producer can essentially find a market for them and move them every day.
Other products, such as flax and lentils are “the savings account,” as they won’t necessarily be marketable every day.
In Ontario, soybean and corn bids were holding steady, although a large portion of the crops are still waiting to be harvested.
“They’re plugging away at it, but I wouldn’t be surprised if 30 to 40 per cent of the bean and corn acres are still out there,” said Andrew St. Jean, organic manager with Beechwood Agri-Services in Ontario. “Everybody wants to get this harvest behind them,” he said adding that the quality was questionable for what was coming off the field.
While the delayed harvest and quality issues may have Ontario farmers anticipating higher prices, St. Jean said supplies were still good. In addition, feed supplies will likely be larger than normal, which will weigh on that side of the market.