Tight supplies and growing demand mean organic farmers can anticipate decent prices for 2013.
“It’s definitely a good time to be in organics,” Leslie Johnson, marketing manager of Growers International Organic Sales (GIOSI) told a small gathering of organic farmers at Ag Days last week.
“Prices are on the rebound with interest in organics from both the end-user and our customers,” she said. “The demand is pretty much bigger than the supply for sure.”
GIOSI, a division of Paterson Global Foods, is Canada’s largest exporter of bulk organic grain and has elevators at Lang, Bracken, and Wolseley, Sask.
However, the organic market is unpredictable, and is seeing so-called “natural” eating into sales. Overall economic conditions, particularly in the U.S., are also key, said Johnson.
“If the U.S. goes back into a recession and people feel they don’t want to pay the increased price for organic, they will go back to a conventional or a natural product which will affect our demand and therefore our prices,” she said.
It’s been a wild ride for the organic sector in recent years, particularly in 2008 when the recession sent prices tumbling below conventional. It’s estimated that prompted about 25 per cent of all Canadian organic grain producers to switch back to conventional, battered not just by lost premiums, but ongoing weather and yield issues.
Manitoba lost more — probably about 40 per cent of all the organic producers who were around five years ago are now out, said Laura Telford, business development specialist in organic marketing with Manitoba Agriculture Food and Rural Initiatives.
There’s reason to believe we’ve “bottomed out” at this point and the numbers may again start to turn around, Telford said. Those who quit aren’t expected back, but organic production systems continue to appeal to another cohort of younger, conventional farmers due to its lowered input costs.
If you can handle the market uncertainty, you can definitely benefit from being organic, Telford said.
“Organic is much more labile. You can benefit dramatically. But you have to stick around.”