Solid information on organic crop pricing remains elusive, especially for the Canadian market.
There are similar problems in the rest of the world where fraud and a lack of data have made it challenging for organic farmers and marketers to set prices.
Ryan Koory of Mecaris, an organic trading company, however, says that there’s little doubt that feed use of soybeans and corn are driving organic crop prices in the U.S.
Koory spoke at a recent organic information day put on by Beechwood Agri Services in Ailsa Craig. He’s based in Missouri.
He said organic pricing information for Ontario was spotty.
“In Canada we just don’t know,” he said, encouraging local organic trade organizations and certifying bodies to work to gather and release crop pricing information.
“We want to get that information out into the market to know what’s going on in the supply side.”
There’s more transparency in the United States where there’s more collection of data by government agencies.
For example, there’s been a 44 per cent increase in organic livestock production in the U.S. from 2011 to 2016. Organic poultry production especially has exploded, said Koory. That rapid increase has been driven by the movement of large poultry production companies into organic production.
They are focusing poultry rations on corn and soybeans, which means an increase in demand for those organic crops.
The trend has also increased demand for organic soy meal. Soybeans in general are in high demand and that’s helped keep a solid floor in organic soybeans prices, although prices haven’t risen. He says organic soybean prices have been hovering around $25 per bu.
Koory says the demand this year is for 15.8 million bu of feed supply soybeans and he’s not sure where that volume will come from.
Corn price is also bullish, he says, with organic price up $2 per bushel since the start of the year in the U.S. to more than $13 per bushel.
U.S organic corn production is up, but imports are also down significantly after a fraud scare slammed imports. A Washington Post story May 12, 2017 revealed a system of organic corn fraud in product mostly from Turkey and Romania.
That’s resulted in a significant drop in imported corn. However, Koory pointed to a huge increase in the import of organic cracked corn – 99 per cent of it from Turkey.
He says he asked USDA officials about the huge increase in organic cracked corn coming into the U.S. Their explanation was that the U.S. needed more organic cracked corn for poultry diets and that Turkey had more new mills, but Koory is suspicious of that story.
“There are two things I can’t totally reconcile. Turkey can’t have opened up new mills just after the (fraud) report and all of that poultry didn’t show up overnight,” he said.
There also isn’t a distinct code for recording organic cracked corn import, he said, and he expects that USDA is significantly underreporting the amount of organic corn making it into the U.S.
He called for more regulatory resources in the U.S.
“If this happened on the conventional side, there would be congressional inquisitions and gallows built,” he said.
The big potential mover this year is the soybean price, but that hasn’t happened yet.
“If you guys could send us some,” he said to the organic farmers at the meeting, “we’d appreciate it.”