Organic Bids Holding Steady Amid Global Uncertainty

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Organic Bids Holding Steady Amid Global Uncertainty

Markets for North American organic grains held reasonably steady in April, despite the COVID-19 pandemic roiling the conventional grains and oilseeds.

“There’s really no volatility at all, month over month,” said Jason Charles, of Minneapolis-based Pipeline Foods.

“Demand in the environment we’re in has been really good,” said Charles. Although he expected any uptick in demand would be a short-term phenomenon, with a return to more normal trade flows expected by June.

“We’ve been pretty stable, (the pandemic) hasn’t seemed to affect organics as much,” said Dan Martinello, of the Westaqua Commodity Group in Vancouver.

While the market is steady for now, prices likely won’t see much room to the upside this year, given the economic uncertainty in many sectors, said Jason Breault, of R.W. Organics in Saskatchewan.

Flour mills and other organic grain processors have yet to run into any issues with shutdowns, unlike what has happened at many slaughterhouses, but Breault cautioned that any issues at the mills could lead to price shifts.

We’ve been pretty stable, (the pandemic) hasn’t seemed to affect organics as much. – Dan Martinello

In addition, while consumers may have stocked up on flour, that demand will likely subside. “In a month or two, when people start going back to normal, I think there will be less sold for a little while,” said Breault.

From a pricing standpoint, organics will maintain a spread with conventional grain, said Charles. He expected the large unemployment numbers amid the global pandemic would keep most prices neutral to lower.

Looking to the new crop, “as organic farmers, we have to adhere to a pretty reasonable rotation year-over-year for nutrient input,” said Charles.

Breault and Martinello agreed that farmers would likely keep to their rotations this year, after chasing some crops in recent years.

“I think people will head back to stricter rotations than they were at before,” added Wes Reid, of W.A. Grain and Pulse Solutions in Alberta. He said many producers had increased yellow pea acres over the past few years, but prices have declined from their highs of a few years ago.