Licensed Grain Dealer in:
Michigan, Iowa, Ohio, Minnesota, Wisconsin
Illinois, Colorado, Louisiana
North & South Dakota, Nebraska
Michigan Office
702 Salzburg Ave Bay City, MI 48706
Organic Crop Harvest is underway in the Midwest, and with it a whole new source of questions, mostly centered around when prices are going to rise.
Farmers have been fortunate to see steadily rising prices for organic crops over the last couple of harvest years. That seems to be flattening out due to a mixture of 2 major issues: oversupply and lower consumer demand.
We are still seeing lower consumer demand as a reaction to inflation. These 2 issues have created a great deal of uncertainty in the market.
A snippet from www.World-Grain.com’s article US Organic Crops Lean Bearish:
“Mercaris, a market data service and online trading platform for organic and non-GMO certified agricultural commodities, said in its recent Spring 2023 Commodity Outlook report the US organic soybean production and carryover stocks at the start of the 2022-23 marketing year had reached a record 14.1 million bushels, up 14% from 2021-22. The report also noted 2023-24 US organic corn prices were under pressure due to a projected 10% increase in production.
The decline in organic soybean acreage allowed for possible expansion in organic spring wheat, and Mercaris was projecting a 3% increase in acreage for the US crop.
Overall, total US organic wheat acreage for all classes was expected to decline by 2% due to severe drought, but improved conditions indicated an increase in both production and yields was likely despite the cut in acres.”
As you can see, the increase in supply for organic corn, soybeans and wheat meets a lower consumer demand. Purchasers are leveraging the market instability to demand lower organic crop prices. Farmers are waiting to see if prices will rise, creating a bit of a standoff between the two sides of the market.
Organic Wheat: higher supply and lower protein percentages
A recent trend in organic wheat harvest across Michigan, Illinois, Ohio and Minnesota is the prevalence of lower protein percentages in different varieties of organic wheat. While soft white winter wheat traditionally has lower protein anyway, even varieties of hard red spring and hard red winter have shown protein percentages as low as 6% (as tested by Michigan Grains Inspections & Northern Plains Grain Inspection Services). This negatively affects the purchase price and usability of the grain, as many mills must have certain protein levels in their wheat in order to maintain the integrity of their products.
There is plenty of the Organic varieties of Soft White Winter, Hard Red Spring and Hard Red Winter wheat. The usability of the wheat has proven to be the unknown factor, and will continue throughout the rest of the wheat harvest season.
Michigan, Iowa, Ohio, Minnesota, Wisconsin
North & South Dakota, Nebraska
702 Salzburg Ave Bay City, MI 48706
